Parkin Company, the largest provider of paid public parking facilities and services in Dubai, recently reported its financial results for the third quarter of 2024, revealing that total revenue increased by 25 percent to AED239.2 million ($65.12 million), with notable increases in revenue from public and developer parking, seasonal card/permit fees and enforcement.
“As the largest provider of paid public parking services in the emirate, Parkin plays a key role in Dubai’s transport ecosystem. Our strong third quarter results demonstrate ongoing progress on key operational metrics, which underpin the company’s revenue growth and profitability,” stated Ahmed Bahrozyan, chairman of Parkin’s board of directors.
Earnings and profits rise
The company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 40 percent in Q3 of 2024 to AED146.8 million, representing an EBITDA margin of 61 percent, up 7 percentage points from Q3 2023.
Meanwhile, Parkin’s net profit rose 5 percent to AED104.7 million compared to AED99.8 million in Q3 2023. The continued growth in EBITDA was partially offset by higher depreciation and amortization expenses, higher finance costs, and the introduction of a 9 percent corporation tax for UAE companies from the beginning of the year.
“We continued to deliver profitable growth in the third quarter, with further additions to our parking space portfolio, record transaction volumes, higher public parking utilization rates as well as improved efficiency and accuracy of our technologically advanced enforcement framework,” stated Mohamed Al Ali, CEO of Parkin.
Developer parking revenues surge
Parkin’s public parking revenues rose 16 percent to AED103.7 million due to a notable rise in parking ticket purchases. Revenue from seasonal permits increased 8 percent to AED38.3 million due to a record number of seasonal card sales in Q3. In addition, Parkin’s revenues from developer parking increased 32 percent to AED18.3 million in Q3 due to a net increase in the number of parking spaces in operation and larger ticket volumes.
Meanwhile, revenues from fines increased by 56 percent to AED64.9 million in Q3 2024. The rise in the total number of parking spaces, customer numbers, and transaction volumes contributed to that growth.
Public parking spaces increase
Parkin’s core business and key growth driver is public parking, which includes on and off-street parking facilities. Public parking is classified into four tariff zones with premium and standard zones for both on and off-street parking.
Public parking spaces rose 3 percent to 179,600 spaces in Q3 2024. In terms of new additions, zone C saw the largest increase with 4,300 new spaces.
In the third quarter, Parkin generated AED347.2 million of free cash flow to equity. During the remainder of 2024, in addition to current receivables, the company will also focus on collecting legacy receivables from related parties generated in prior periods and novated to Parkin. During the same period, the cash conversion rate reached 94 percent due to Parkin’s capex-light business model, strong revenue performance, and stable cost base.
“As we continue to support Dubai’s ambitious growth plans, I am confident in Parkin’s future opportunities and in our ability to continue delivering sustainable, long-term shareholder value,” added Al Ali.
Liquidity reaches AED569 million
In Q1 2024, Parkin and Emirates NBD entered into an agreement for AED1.2 billion in unsecured credit facilities, comprising a 5-year Murabaha term financing facility of AED1.1 billion and an AED100 million Murabaha revolving credit facility. Both facilities carry a variable interest set at 3-month EIBOR plus a margin of 0.80 percent per annum.
At the end of the third quarter, Parkin’s net debt position was AED660.1 million. Including the Murabaha revolving credit facility, which remains fully undrawn, Parkin has available liquidity of AED569 million. The increase in liquidity is due to the collection of AED307.9 million in receivables during Q3 2024.
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Parkin pays AED198.773 million dividend
Parkin also intends to pay a semi-annual dividend in April and October of each year. For FY 2024 and thereafter, Parkin expects to pay a minimum dividend payout of the higher of 100 percent of net profit for the year, or free cash flow to equity, subject to distributable reserves requirements.
Parkin declared and paid an interim dividend of AED198.773 million, or AED 0.06625 per share, to eligible shareholders at the end of October 2024.
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