Salik Q2’26 First Take: Print meets expectations, traffic flows recovery underway

Research evidence excerpt

J P M O R G A N

CEEMEA Equity Research

05 August 2026

Salik

Q2’26 First Take: Print meets expectations, traffic flows

recovery underway

Our Take: Salik reported a robust set of Q2’26 results earlier today, with earnings

coming within c. 1-2% of our and BBG consensus expectations. Although FCF

turned negative in Q2 (due to a large working capital build, which we understand

was partly associated with the VAT accounting treatment and should thus be a

temporary event), leverage remained under control with ND/EBITDA at 2.5x as of

Jun’26. In the press release, Salik commented that Q2 “marked the start of a

recovery in traffic flows, with a gradual rebound during April and May,

culminating in June traffic volumes returning to almost near-normal levels”. That

said, there was no mention of (or any changes to) FY’26 guidance at this stage. We

note that amid -9.5%/-12.5% YoY fall in total/chargeable trips in H1’26, Salik’s H1

revenue recorded -7.5% YoY (vs prev. FY’26 guidance of -3-0% YoY & current

-5%/-4% YoY JPMe/BBG cons) and H1 EBITDA margin stood at 69.1% (vs prev.

FY’26 guidance range of 67.5-68.5% & current 68.3%/68.6% JPMe/BBG cons).

We look forward to further comments from management on the earnings call

tomorrow (@9am UKT - link).

Noteworthy Areas: 1) In Q2’26 the breakdown of total chargeable trips

was 37%/53%/10% representing peak/off-peak/past-midnight trips, a roughly

similar mix to Q1’26, we calculate; 2) Total ancillary revenue reached AED

17.2m during H1’26, driven by revenues from Parking Payment Solutions

partnerships with Parkonic, Dubai Mall and Dubai Airports. Salik reaffirmed

its confidence in expanding its ancillary revenue streams over the medium to

long-term; 3) Financials – Salik’s net operating working capital balance as of

Jun’26 stood at negative AED 559m (vs negative AED 665m as of Jun’25). Q2

FCF turned negative, driven by c. AED 0.5bn build-up of working capital

during the period, mainly on large outflows due to and from related parties, as

well as contract liabilities. We understand this is a temporary development,

which is partly related to the earlier announced VAT reassessment accounting,

among other things.…