Parkin Company (PARKIN) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue rose 12% to AED 205.5 million, EBITDA up 42% to AED 134.0 million, and net profit up 7% to AED 95.0 million, despite a new 9% UAE corporate tax.

• Public parking utilization improved to 26%, with 2,900 new spaces added and a 3% increase in paid spaces.

• Developer-owned parking spaces grew 17% on a net basis, and seasonal cards/permits rose 15%.

• H1 2024 dividend is expected in late October, with a robust dividend policy targeting at least 100% of net profit or free cash flow to equity.

• Parkin became a standalone entity on 1 January 2024, operating under a 49-year concession agreement with RTA.

Financial highlights

• Q2 2024 revenue reached AED 205.5m (+12% YoY); H1 2024 revenue was AED 421.0m (+10%).

• EBITDA margin expanded to 65% (Q2 2023: 51%), with Q2 EBITDA at AED 134.0m and H1 at AED 272.2m.

• Net profit for Q2 was AED 95.0m (+7%), and H1 net profit was AED 198.8m (+6%).

• Free cash flow to equity achieved 100% cash conversion in Q2, totaling AED 135.6m.

• Operating expenses decreased by 21% to AED 71.5m, mainly due to lower staff and corporate allocation costs.

Outlook and guidance

• Management expects performance to align with FY 2024 guidance, despite seasonal fluctuations.

• Employee benefits expense is expected to rise as hiring and salary realignment continue.

• Transitional service expenses from RTA will continue for up to two years from January 2024.

• Dividend policy targets a minimum payout of the higher of 100% of net profit or free cash flow to equity, subject to reserves.