Page 83 - SALIK PR REPORT AUGUST 2024

9/2/24, 11:57 AM Al Ramz Investment Maintains an 'Overweight' Rating on Salik, Driven by Strong Growth Expectations and it's Stable Dividend Policy
These, Salik intends to finance from existing cash balances and cash flows from

operations over the next few years. More importantly, management indicated

that it will not take any more debt to finance those, which means limited, if any,

effect on the balance sheet.

Al Ramz Investment’s Outlook: Leverage and

Dividend Policy

It has also pointed out that owing to the change in the payment expectations

for new toll gates, Salik’s credit outlook has brightened. Whereas earlier, higher

payments were expected during the beginning of a concession or in 2024, this

estimate was altered now, which provides a brighter leverage outlook for the

company over the short run.

Anyway, Salik leverage is likely to be maintained at the current level during the

medium term. Al Ramz also sees the company maintaining its present dividend

policy and projects a dividend of 19 fils per share for 2025 that translates into a

yield of 4.3%.

Stock Rating and Fair Value Adjustment

Al Ramz Investment remains optimistic about Salik’s growth prospects, but has

slightly reduced the fair value estimate to AED 4.20 per share from AED 4.25.

This fresh target still represents a 15% upside from its Friday morning trading

price of AED 3.66, according to data from LSEG.

Hence, Al Ramz retains the overweight recommendation it has on Salik, due to

its confidence in the long-term growth possibilities that it can achieve for

shareholders.

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