Emirates Group on Thursday announced its 31st consecutive year of profit and steady business expansion.
Released today in its 2018-19 Annual Report, the Group posted a profit of AED2.3 billion (US$631 million) for the financial year ended 31st March 2019, down 44% from last year.
The Group’s revenue reached AED109.3 billion ($29.8 billion), an increase of 7 percent over last year’s results. The Group’s cash balance was AED22.2 billion ($6.0 billion), down 13 percent from last year mainly due to large investments into the business, including significant acquisitions and payment of last year’s AED2 billion ($545 million) dividend.
In line with the overall profit, the Group declared a dividend of AED500 million ($136 million) to the Investment Corporation of Dubai for 2018-19.
H.H. Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive of Emirates Airline and Group, said, "2018-19 has been tough, and our performance was not as strong as we would have liked. Higher oil prices and the strengthened US dollar eroded our earnings, even as competition intensified in our key markets. The uptick in global airfreight demand from the previous year appears to have gone into reverse gear, and we also saw travel demand weaken, particularly in our region, impacting both dnata and Emirates."
"Every business cycle is different, and we continue to work smart and hard to tackle the challenges and take advantage of opportunities. Our goal has always been to build a profitable, sustainable, and responsible business based in Dubai, and these principles continue to guide our decisions and investments. In 2018-19, Emirates and dnata delivered our 31st consecutive year of profit, recorded growth across the business, and invested in initiatives and infrastructure that will secure our future success," he added.
In 2018-19, the Group collectively invested AED14.6 billion ($3.9 billion) in new aircraft and equipment, the acquisition of companies, modern facilities, the latest technologies, and staff initiatives, a significant increase over last year’s investment spend of AED9.0 billion ($2.5 billion).
In February, Emirates announced a commitment for 40 A330-900s and 30 A350-900s worth $21.4 billion at list prices in an agreement signed with Airbus, to be delivered from 2021 and 2024 respectively. The airline will also receive 14 more A380 deliveries from 2019 until the end of 2021, taking its total A380 order book to 123 units.
dnata’s key investments during the year included: the acquisitions of Q Catering and Snap Fresh in Australia, and 121 Inflight Catering in the US; the buy-out of shares to become the owner of Dubai Express, Freightworks LLC; and a 51% majority stakeholder of Bollore Logistics, UAE; the build of new cargo and pharma handling facilities in Belgium, the US, the UK, the Netherlands, Australia, Singapore and Pakistan; the acquisition of German tour operator Tropo, and a majority stake in BD4travel, a company providing artificial intelligence driven IT solutions in the travel sector.
Across its more than 120 subsidiaries, the Group’s total workforce increased by 2% to 105,286, representing over 160 different nationalities, mainly influenced by dnata’s new acquisitions and its international business expansion.
Sheikh Ahmed stated, "In 2018-19, we were steadfast with our cost discipline while expanding our business and growing revenues. By slowing the recruitment of non-operational roles, and implementing new technology systems and new work structures, we’ve improved productivity and retarded manpower cost increases."
He concluded, "It’s hard to predict the year ahead, but both Emirates and dnata are well positioned to navigate speed bumps, as well as to compete and succeed in the global marketplace. We must continually up our game, that’s why we invest in our people, technology, and infrastructure to help us maintain our competitive edge."