Dubai Taxi Company (DTC), listed on the Dubai Financial Market (DFM), has announced a Dh122.3 million dividend for its shareholders for 2024, reinforcing its commitment to distributing at least 85% of its annual net profit. This decision highlights the company’s strong financial standing and dedication to rewarding its investors.
Financial Highlights
In the first half of 2024, DTC reported a net profit of Dh187.4 million, a 1% increase compared to the previous year, after factoring in corporate tax and financing costs. Excluding the impact of corporate tax, the profit gain would have been 11%. Furthermore, if interest costs related to the Dh1 billion loan taken in September 2023 were excluded, the net profit would have surged by an impressive 27%.
The company’s revenue grew by 14% year-on-year, reaching Dh1.09 billion. This increase was supported by growth across all segments, including higher taxi tariffs set by the Road and Transport Authority (RTA) and an increase in dedicated airport taxis, where DTC has exclusive operating rights and charges higher tariffs.
Key Financial Metrics:
- Revenue Growth: 14% year-on-year to Dh1.09 billion.
- Net Profit: Dh187.4 million (1% increase)
- EBITDA Growth: 27% increase to Dh309.3 million, with a margin of 28%
- Free Cash Flow: Dh178.5 million, a 65% increase compared to H1 2023
Dividend Details
DTC’s board has approved an interim dividend of Dh159.3 million for H1 2024, which is expected to be distributed in August 2024. This translates to 6.37 fils per share. The company is committed to distributing at least 85% of its annual net profit as dividends, reflecting its dedication to shareholder returns.
Dividend Payout:
- Total Dividend for H1 2024: Dh159.3 million
- Dividend per Share: 6.37 fils
- Distribution Policy: Minimum 85% of annual net profit
Operational Performance
DTC’s taxis and limousines completed 23 million trips in the first half of 2024, a 4% increase year on year. The company expanded its operating fleet by 294 vehicles following the awarding of new taxi licenses in Q1 2024. This expansion has enabled DTC to consolidate its market leadership, capturing 45% of Dubai’s taxi market share.
Operational Highlights:
- Number of Trips: 23 million (4% increase)
- Fleet Expansion: Increased by 294 vehicles
- Market Share: 45% of Dubai’s taxi market
Strategic Initiatives and Future Outlook
Looking ahead, DTC is exploring opportunities to create new revenue streams and expand its presence in other Emirates. The company is gradually building a presence in Abu Dhabi, Al Ain, and Ras Al Khaimah, with bus and limousine services. Additionally, DTC plans to commence delivery services in Abu Dhabi shortly.
CEO Mansoor Rahma Alfalasi highlighted the company’s positive outlook, which is supported by Dubai’s continued success as a leading business and leisure destination. He noted that strong macroeconomic factors drive long-term, sustainable demand growth for DTC’s services.
Strategic Focus:
- Expansion: Building presence in other emirates
- New Services: Commencing delivery services in Abu Dhabi
- Market Opportunities: Participating in RTA auctioning of new taxi licenses
Financial Position
DTC maintains a healthy balance sheet with a net debt to EBITDA ratio of 1.1x and a cash balance of Dh374 million as of June 2024. The company’s strong financial position provides a solid foundation for future growth and strategic investments.
Dubai Taxi Company’s robust financial results, strategic initiatives, and commitment to shareholder returns position it well for continued success. The company’s focus on fleet expansion, market leadership, and exploring new opportunities underscores its proactive approach to growth and sustainability.
