Emirates set new profit record

Sheikh Ahmed announces Emirates’ record performance

THE Emirates Group has announced another record performance with net profits of Dh2.8 billion ($762 million) for the financial year ended March 31, 2006 – up five per cent from the previous year’s record profits of Dh2.7 billion.

Group revenue increased by an impressive Dh5.2 billion or 27 per cent, to Dh24.3 billion compared to Dh19.1 billion last year. The group’s cash balance was a robust Dh11 billion at the end of March, up 28.6 per cent.  
For 2005-06 Emirates will pay an increased dividend of Dh386 million ($105 million) to its owner, the government of Dubai, compared to Dh368 million ($100 million) last year. In total, the ownership will have received Dh1.4 billion ($396 million) from Emirates since the financial year 2000-01.
Two million more passengers flew Emirates in the latest financial year, for a new record total of 14.5 million. 
“These results show that Emirates’ customer-oriented approach and investments in providing a quality product – the best aircraft that money can buy, top-flight service and travel experience at a competitive price – has paid off,” said Sheikh Ahmed bin Saeed Al-Maktoum, chairman and chief executive, Emirates Airline and Group, even as he acknowledged that the last year was tough with pressure from fuel costs continuously dampening net income production.
Across the group, initiatives to improve efficiency and keep a tight rein on costs also contributed to the results, and the group maintained a strong net profit margin of 11.8 per cent. Fuel costs remained the top expenditure at 27.2 per cent of total operating costs, up from 21.4 per cent the previous year. Emirates’ increased fuel surcharges on tickets only covered 41 per cent of incremental costs.
The airline’s jet fuel risk management programme helped mitigate fuel costs, saving $189 million in 2005-06, 50 per cent more than last year. The outlook however, remains sombre in a volatile global market where oil prices have hit new highs.
In his opening review in the 2005-06 Annual Report, Sheikh Ahmed debunked accusations that Emirates receives hidden government support and subsidies, reiterating that the company’s success is based on a sound and simple business model, which focusses on growth and investing in innovations to keep ahead of the competition.

Emirates Airline’s revenues totalled Dh23.1 billion for the year, Dh4.9 billion or 27 per cent above income of Dh18.1 billion in 2004-05. Airline profits of Dh2.5 billion also topped the previous year’s record profits of Dh2.4 billion.
Emirates SkyCargo set a new record with over one million tonnes of cargo carried, up more than 180,000 tonnes, or 21.5 per cent from last year’s 838,400 tonnes. Its revenue of Dh4.5 billion was Dh1 billion (29.2 per cent) higher than 2004-5, a 21 per cent contribution to the airline’s transport revenue. 
Destination and Leisure Management, another division of Emirates Airline, improved 17 per cent to Dh940 million, supported by a record number of 318,000 customers.
Dnata recorded a strong performance with revenue growth of 25.9 per cent to Dh1.8 billion, compared to Dh1.4 billion last year. Dnata’s profits of Dh324 million represent an increase of Dh64 million or 24.6 per cent compared to last year’s Dh260 million.