Emirates reports doubling profits despite global headwinds

The Emirates Group today announced its half yearly results which remain robust despite continued global economic pressure and continued high fuel prices, the group said in a media statement this morning.

The Emirates Group posted net profits of Dh2.1 billion ($575 million) for the first six months of its fiscal year ended September 30, 2012, up 68 per cent from Dh1.3bn ($343m) from the same period last year.

In the first half of the 2012-13 fiscal year, Emirates airline's net profit surged 104 per cent to Dh1.7bn ($464m) from Dh836m ($228m) reported during the same period last year.

“The Emirates Group half-year performance is the result of hard work and our drive to stay on course and continue to grow despite the precarious marketplace,” said His Highness Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group. “We have continued to invest in the infrastructure of both Emirates and dnata and it continues to pay off.”

Despite fundamental challenges, the group’s revenue and other operating income rose to Dh38.2bn ($10.4bn) an increase of 16 per cent over the last year’s results. This constitutes the first time in the group’s history that revenue surpassed the $10bn mark in a six month period.

The Group’s cash position on September 30, 2012, remained strong at Dh15.2bn ($4.1bn), compared to Dh17.6bn ($4.8bn) as of March end 2012. The Dh2.4bn difference in the cash balance is primarily the result of a Dh2bn Sukuk bond repayment in June 2012.

Even with a challenging operating environment, the group continued to invest in and expand on its employee base, increasing its overall staff count by more than 8 per cent in just six months to nearly 68,000.

During the first six months of the fiscal year, Emirates received 13 wide-body aircraft, including two A380s and 10 Boeing 777s and one freighter, with more than 15 new aircraft scheduled to be delivered before the end of the financial year (March 31, 2013). As the fleet increased, Emirates further invested in its network by adding five new destinations that have joined the 10 new routes added since September 30, 2011, for a total of 15.

On its strong upward trajectory, Emirates continues to be one of the fastest growing airlines in the world. In spite of unstable global economic, geopolitical and environmental conditions Emirates continues to make a profit. In the first half of the 2012-13 fiscal year, Emirates net profit is Dh1.7bn ($464m) up 104 per cent from Dh836m ($228m).

“Emirates remained focused on its growth and global expansion despite on-going fluctuating exchange rates and ever lingering high fuel prices which accounted for 39 per cent of our expenditures, down 2 percentage points from last year,” said HH Sheikh Ahmed. “The instability in the market over the past six months has put Emirates to the test, and once again we have risen to the challenge, our results speak for themselves.”

Equipped with the world’s largest fleet of A380s and the largest fleet of Boeing 777s Emirates continues its broad, global expansion now flying to 126 destinations up from 114 last year to 74 countries compared with 67 last year. The airline has launched five new destinations since April 1, 2012, including Ho Chi Minh City, Barcelona, Lisbon, Erbil and Washington, D.C. Additional new routes to be added during the second half of the fiscal year include Adelaide, which launched November 1 and the upcoming routes of Lyon, Phuket, Warsaw and Algiers.

New A380 destinations for the airline for the first six months of fiscal year 2012-13 included Tokyo and Amsterdam bringing the total number of A380 destinations to 19.

In the first-half of its financial year 2012-13, Emirates posted strong business growth, both in terms of capacity on offer and traffic carried, performance that has been in sharp contrast to the current trend seen across the aviation industry. Capacity measured in Available Seat Kilometres (ASKM), grew by 17.3 per cent, whilst passenger traffic carried measured in Revenue Passenger Kilometres (RPKM) was up 17.8 per cent with Passenger Seat Factor sustained at a high level, averaging 80 per cent, slightly above last year’s 79 per cent.

Emirates carried 18.7 million passengers since April 1, 2012, up 15.4 per cent for the same period last year. The volume of cargo uplifted was up by more than 16 per cent, a significant growth against the market trend.

Emirates revenue, including other operating income, of Dh35.4bn ($9.7bn) was higher by 17 per cent compared with Dh30.2bn ($8.2bn) recorded last year, largely reflecting a strong passenger yield based on constant high fuel prices.

In the summer of 2012, the financial community continued to show confidence in Emirates as the airline successfully raised financing for four A380s using the debt capital market in the US – a first for a non-US airline for many years.

dnata continues to grow internationally and reinvest in the global business infrastructure. dnata’s revenue including other operating income is Dh3.9bn ($1.1bn), 9 per cent higher compared to Dh3.6bn ($968m) last year. This is the first time in dnata’s 53 year history the company achieved $1bn in revenues in six months.

During the year, dnata’s operating costs increased by 11 per cent to Dh3.4bn ($940m) due to increased costs of doing business in the global market place. Overall profit for dnata is slightly down 4 per cent at Dh407m ($111m), a positive performance set against the significant competition challenges within the aviation industry.

Revenue from dnata’s Travel Services operation contributed most significantly to the organisation’s revenue through the first time integration of Travel Republic for the first six months reporting period as it was acquired in December 2011.

dnata’s cargo handling division also witnessed upward growth with revenues increasing by 5 per cent to Dh524m ($143m) on account of increased tonnage at Dubai International Airport and Singapore Changi Airport which rose by 5 per cent to 791,151 tonnes.

dnata’s in-flight catering operation, accounted for Dh1.4bn ($377m) of its total revenue. The number of meals uplifted at 27.5 million meals for the first half of the fiscal year, down slightly, at 2.4 per cent compared to last year.

Revenue from dnata’s airport operations increased by 4 per cent reaching Dh1.2bn ($324m). The increase is due primarily to increased volumes at Dubai and Singapore airports. The number of aircraft handled by dnata also increased to 130,684, up 5.6 per cent.
 

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