Dubai-based Emirates Group has reported a revenue of Dh54.4 billion ($14.8 billion) for the first six months of its 2018-19 financial year, up 10 per cent from Dh49.4 billion ($13.5 billion) during the same period last year.
Profitability was down 53 per cent compared to the same period last year, with the group reporting a 2018-19 half-year net profit of Dh1.1 billion ($296 million). The profit erosion was primarily due to the significant increase in fuel prices of 37 per cent compared to the same period last year, as well as the negative impact of currencies in certain markets, a company statement said.
The group’s cash position on 30th September 2018 was at Dh21.5 billion ($5.9 billion), compared to Dh25.4 billion ($6.9 billion) as at 31st March 2018.
Sheikh Ahmed bin Saeed Al Maktoum, chairman and chief executive, Emirates Airline and Group said: “Emirates and dnata grew steadily in the first half of 2018-19. Demand for our high quality products and services remained healthy, as we won new and return customers across our businesses and this is reflected in our revenue performance. However, the high fuel cost as well as currency devaluations in markets like India, Brazil, Angola and Iran, wiped approximately Dh4.6 billion from our profits.
“We are proactively managing the myriad challenges faced by the airline and travel industry, including the relentless downward pressure on yields, and uncertain economic and political realities in our region and in other parts of the world. We are keeping a tight rein on controllable costs and will continue to drive efficiency improvement through the implementation of new technology and business processes.
“The next six months will be tough, but the Emirates Group’s foundations remain strong. I’m pleased to note that our home and hub in Dubai continues to attract travel demand, as the airline saw 9 per cent more customers enjoying Dubai as a destination in the first half of 2018-19 compared to the same period last year. We expect this demand to remain healthy as new attractions come online and the city gears up for Dubai Expo 2020. Moving forward we are firmly focussed on sustaining our business. We will do this by being agile to capitalise on opportunities, and investing to serve our customers even better with high quality products that they value.”
In the past six months, the Group’s employee base reduced by 1 per cent compared to 31 March 2018, from an overall average staff count of 103,363 to 101,983. This was largely a result of natural attrition, together with a slower pace of recruitment as the business continues its various internal programmes to improve efficiency through the implementation of new technology and workflows.
During the first six months of 2018-19, Emirates received 8 wide-body aircraft – 3 Airbus A380s, and 5 Boeing 777s, with 5 more new aircraft scheduled to be delivered before the end of the financial year. It also retired 7 older aircraft from its fleet with further 4 to be returned by 31 March 2019. The airline’s long-standing strategy to invest in the most advanced wide-body aircraft enables it to improve overall efficiency and provide better customer experiences.
Overall capacity during the first six months of the year increased a modest 3 per cent to 31.8 billion Available Tonne Kilometres (ATKM). Capacity measured in Available Seat Kilometres (ASKM), grew by 4 per cent, whilst passenger traffic carried measured in Revenue Passenger Kilometres (RPKM) was up 6 per cent with average Passenger Seat Factor rising to 78.8 per cent, compared with last year’s 77.2 per cent.
Emirates carried 30.1 million passengers between 1 April and 30 September 2018, up 3 per cent from the same period last year. The volume of cargo uplifted at 1.3 million tonnes is largely unchanged while yield improved by a healthy 11 per cent .This performance is the result of Emirates SkyCargo’s focussed investments in products and services tailored to key sectors, which gives it a strong competitive edge in a recovering global air freight market.
In the first half of the 2018-19 financial year, Emirates net profit is Dh226 million ($62 million), down 86 per cent, compared to last year. Emirates revenue, including other operating income, of Dh48.9 billion ($13.3 billion) was up 10 per cent compared with the Dh44.5 billion ($12.1 billion) recorded during the same period last year. This result was driven by increased agility in capacity deployment, and improved seat load factors despite fare increases reflect the healthy customer demand for Emirates’ products.
Emirates operating costs grew by 13 per cent against the overall capacity increase of 3 per cent. On average, fuel costs were 42 per cent higher compared to the same period last year, this was largely due to an increase in oil prices (up 37 per cent compared to same period last year), as well as an increase in fuel uplift of 4 per cent due to Emirates’ expanding fleet operations. Fuel remained the largest component of the airline’s cost, accounting for 33 per cent of operating costs compared with 26 per cent in the first six months of last year.
dnata saw steady growth across its global businesses which now span over 35 countries. In the first half of 2018-19, dnata’s international operations accounted for over 68 per cent of its revenue.
dnata’s revenue, including other operating income, is Dh7.0 billion ($1.9 billion), an 11 per cent increase compared to Dh6.3 billion ($1.7 billion) last year. This performance was underpinned by robust organic business growth, particularly in its international airport operations business.
Overall profit for dnata is up by 31 per cent to Dh861 million ($235 million). This includes gains from a one-time transaction where dnata divested its 22 per cent stake in the travel management company Hogg Robinson Group (HRG), during HRG’s acquisition by Amex Travel Business Group. Without this one-time transaction, dnata profits will be down 18 per cent compared to the same period last year.
dnata’s airport operations remains the largest contributor to revenue with Dh3.6 billion ($976 million), a 6 per cent increase compared to the same period last year. Across its operations, the number of aircraft handled by dnata increased by 6 per cent to 350,052, and it handled 1.5 million tonnes of cargo, up 2 per cent.
dnata's travel division contributed Dh1.7 billion ($456 million) to revenue, up 9 per cent from the same period last year. The division’s underlying net sales increased by 6 per cent to Dh5.9 billion ($1.6 billion).
This performance was driven by strong results from the travel division’s UAE operations, revenue contributions from Destination Asia which dnata acquired in September 2017, and healthy business in UK which was also boosted by a stronger Pound Sterling against the US dollar. At the end of September, dnata entered the German market with its acquisition of Tropo, a tour operator specialising in travel packages, last minute holidays and hotel reservations.
dnata’s flight catering operation, contributed Dh1.1 billion ($311 million) to its total revenue, up 4 per cent. The number of meals uplifted increased by 2 per cent to 31.0 million meals for the first half of the financial year.
Downward pressure on yields, particularly in its Australian operations, was offset by a healthy performance from its Alpha Group operations as well as higher meal volumes through increased business in the UK, Romania, Czech Republic and Sharjah (UAE).- TradeArabia News Service