STOCK Salik tollgate Dubai
Salik's existing eight toll-gates in dubai are building up nicely towards a bumper fourth quarter usage. And it has other plans too... Image Credit: Bloomberg

Dubai: It should be pretty straight-forward to get a feel of how Salik as a company is doing.

Cast an eye on the traffic pouring through Dubai’s road networks, and make a few calculations on what of numbers could be passing through the 8 toll-gates in the city. In Q3-2023, anyone doing these numbers in their heads would have guessed right – Salik was doing quite well for itself.

But what the company – which went through a hugely successful IPO last year – does next is just as important, whether that be through new gateways in the city or via changes to the tariffs. Ibrahim Al Haddad, CEO of Salik, gives some hints as to what might be coming from the company.

Organically, Salik has had some good quarters, with usage of the toll-gates growing exponentially. But isn’t it time you had a look at your tariffs (from the current Dh4 per use)?

Road toll tariffs are set by the RTA - any decision to change the existing tariff rests with them. As you point out, we have achieved healthy growth over the last 12-18 months, and we are carrying that momentum into the final quarter of this year.

We expect to meet our previously increased guidance of toll usage growth in the range of 9-10 per cent versus 2022.

The reality is that traffic volumes are increasing in Dubai, supported by macroeconomic and demographic factors including growth in tourism and the number of residents relocating to the city. This is supportive of growth for Salik - with or without changes to tariffs.

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Ibrahim Al Haddad, CEO of Salik, "We are actively pursuing opportunities in advertising and data monetization, and we have made good progress..." Image Credit: Supplied

How about adding more toll-gates in the city? Any specific plan awaiting municipal approval?

The prerogative to introduce more toll gates also belongs to the RTA. If and when introduced, those gates would be operated by Salik. But we don’t have a role in deciding when or where they are installed.

It is worth noting that any new gates would also require the approval of the Executive Council of Dubai. As it stands, we are not aware of any specific plans for new gates, but discussions are ongoing.

Some analysts say that Salik will require a fairly ‘sizable’ number of new gates to push growth beyond current levels. And that it needs to do so within the next 12 months. What would you say to that?

New gates would, naturally, boost our growth – but we are not reliant on them.

Firstly, the macroeconomic environment in the UAE is highly supportive of our business model and strategy. A surging population in Dubai means more vehicles on the road, and more vehicles passing through our gates. We believe these tailwinds are strong and sustained, and we expect them to prevail through 2023 and 2024.

At the time of your IPO, you mentioned gates will be tech enabled to ‘push’ customized marketing messages. Is that going live now?

This is a work-in-progress, but something that we are exploring seriously, with a view to maximizing a range of opportunities to monetize our gate network through data and advertising. We remain in active discussions with various parties around potential future partnerships and will disclose these to the market once agreements are in place and approved.

We are actively pursuing opportunities in advertising and data monetization, and we have made good progress with these. Additionally, you may have seen that we recently partnered with AW Rostamani Group – this enables the exclusive dealer of various car brands (including Nissan and Renault) operating across Dubai and Sharjah to process and deliver Salik tags to its customers conveniently.

We remain in discussions with various parties around potential partnerships – including internationally – and will disclose these to the market in due course.

Any avenues for inorganic growth?

There are avenues for inorganic growth – both at home and further afield, but it is too soon mention anything specific. We are actively exploring our options and will make updates to the market if and when there is a material development to disclose.