THE Emirates Group has posted a record profit increase of 248 per cent, an outstanding result in a year fraught with worldwide market instability and economic uncertainty.
The 2009-10 annual report of the group which comprises Emirates Airline, Dnata and their subsidiary companies was recently released by Sheikh Ahmed bin Saeed Al Maktoum, chairman and CEO, Emirates Airline and Group.
He said: “It has been an exceptional year of continued profitability against a backdrop of the worst global recession in generations. The first half of the financial year however, was extremely challenging as the world continued to grapple with the economic crisis. Our pioneering spirit and ability to adapt in adverse conditions helped us to push through this harsh economic climate with an extremely strong performance in the latter part of the year.”
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Sheikh Ahmed...good year |
In a difficult year the group’s net profits increased 248 per cent to Dh4.2 billion ($1.1 billion) for the financial year ended March 31. Group revenue remained stable at Dh45.4 billion reflecting lower passenger and cargo yields offset by increased traffic. The group profit margin improved to 9.1 per cent from 2.6 per cent a year earlier.
The group’s cash balance grew to Dh12.5 billion, an improvement of 43.3 per cent after Dh3.4 billion of investments, and Emirates flew 27.5 million passengers, 4.7 million more than the previous year.
Emirates Airline’s revenues remained stable at Dh43.5 billion, an increase of 0.4 per cent from the previous year. Airline profits of Dh3.5 billion marked an increase of 416 per cent over 2008-09’s profits.
Despite a 16.9 percent capacity increase during 2009 to 28,526 million ATKM (available tonne kilometres), Emirates’ operating costs in total decreased by 2.7 per cent compared with the previous year resulting in a significant unit cost improvement of 16.6 per cent and impressive productivity gain per employee, as the average airline employee strength has only increased by 2.3 per cent.
At the end of the year, the total number of aircraft on Emirates’ order book, excluding options, was 146 planes, worth more than $48 billion.
Emirates recorded an exceptional passenger seat factor, at 78.1 per cent, given there was also a high seat capacity (available seat kilometres – ASKs) increase of 20.6 per cent.
Yield declined by 16.9 per cent to 211 fils per RTKM (revenue tonne kilometre), down from 254 fils in 2008-09. This decline in yield was countered by the increase in passenger seat factor.
Emirates SkyCargo carried 1.6 million tonnes of cargo, an improvement of 12.2 per cent. Cargo revenue at Dh6.3 billion was 8.1 per cent lower than the previous year as the result of declining yields.
It was a difficult year for the destination and leisure management (DLM) division of Emirates Airline, with package sales of Dh1 billion.
Dnata managed to hold ground during an incredibly challenging year achieving the highest ever profit in its 50 year history. Profits increased by 20.9 per cent to reach a record Dh613 million and revenue remained stable with a marginal drop of 0.7 per cent to Dh3.2 billion.
Dnata’s operating costs were 4.2 per cent lower compared with the previous year based on major cost saving initiatives across all business segments.
Dnata continues to play a major role in the group’s growth by handling worldwide a record 192,120 aircraft (up 8.2 per cent on last year) and 1,121 thousand tonnes of cargo, (up 11.8 per cent over the previous year).