Dubai: DFM-listed Dubai Taxi Company. recorded Dh187.4 million in H1-2024 net profit, a gain by 1 per cent, after factoring in costs related to corporate tax and those related to financing.
If the tax impact was excluded, the profit gain would have been 11 per cent. And if interest cost related to Dubai Taxi Co.'s Dh1 billion loan - drawn in September 2023 - was factored out, the net profit spike would have been by an impressive 27 per cent on a like-for-like basis.
Dividend as promised
The company has also approved a Dh159.3 million dividend for the first-half of the year. This is as per the stated policy to 'distribute at least 85 per cent of annual net profit," said Abdul Muhsen Ibrahim Kalbat, Chairman.
This amounts to 6.37 fils a share for H1-2024. This is expected to be distributed next month. (The stock is trading at Dh2.33, with Dh2.38 being the 52-week high. The company’s shares were added to the MSCI Small Cap Index and the S&P UAE Shariah Index during Q2-2024.)
The revenues grew 14 per cent year-on-year to Dh1.09 billion with 'strong growth across all its segments'. "The performance was underpinned by the ongoing execution of its growth strategy including increasing its taxi fleet and entering into new strategic partnerships, to consolidate its market-leading position," said a statement.
The taxi segment benefited from higher tariffs - as determined by the Road and Transport Authority (RTA) - as well as an 'increase in the proportion of dedicated airport taxis, where DTC has exclusive rights to operate and charges a higher tariff'.
The free cash flow for the period was Dh178.5 million, a smart 65 per cent increase compared to H1-2023.
23 m
Number of trips made by Dubai Taxi Co.'s taxis and limousines during the H1-2024 period, an increase of 4% year-on-year'Robust results'
“We delivered a robust set of results during the first half of 2024 with revenue increasing 14 per cent year-on-year, sustaining an attractive EBITDA margin of 28 per cent," said Mansoor Rahma Alfalasi, CEO.
During this period, the taxi fleet went up by a further 294 vehicles after the awarding of new licences in Q1-2024.
“Our outlook is positive, supported by Dubai’s continued success as a leading business and leisure destination, with strong macroeconomic tailwinds enabling population growth and urban expansion, which we see driving long-term, sustainable demand growth for our services,” said Alfalasi.
What next for DTC?
“We are exploring various opportunities that will create new revenues streams for Dubai Taxi Co.,” said the CEO.
The company is gradually building towards a presence in some of the pother emirates, with bus services in Abu Dhabi and Al Ain, as well as in Ras Al Khaimah. There is also a ‘small’ limousine service in the latter market. And delivery services will commence shortly in Abu Dhabi.
Creating a service network outside of Dubai is part its organic expansion, but ‘this will be done very carefully’, said Alfalasi.. “We will need a clear understanding of the regulatory framework to operate in any new market.”
The DTC will be keen participant in the upcoming RTA auctioning of new taxi licenses in Dubai. “These licenses offer the best opportunity for more growth, and we are extremely keen to grow our dominant market share in Dubai,” the CEO said.
More loans?
In releasing the H1-2024 results, Dubai Taxi Co. makes clear reference to the higher cost of finance.
On whether it requires to top up its loans, Alfalasi said: “We are not under any sort of pressure on our financing costs. At the time of the IPO, our dealings with the banks placed us in a good position to explore growth through this period.
“We could explore the possibility of raising more from lenders - our EBITDA numbers are quite favourable.”
