The Emirates Group announced its 32nd consecutive year of profit, against a drop in revenue mainly attributed to reduced operations during the planned DXB runway closure in the first quarter, and the impact of flight and travel restrictions due to the COVID-19 pandemic in the fourth quarter.
The Emirates Group posted a profit of AED 1.7 billion ($456 million) for the financial year ended 31 March 2020, down 28% from last year. The Group’s revenue reached AED 104.0 billion ($28.3 billion), a decline of 5% over last year’s results. The Group’s cash balance was AED 25.6 billion ($7.0 billion), up 15% from last year mainly due to a strong business performance up to February 2020 and lower fuel cost compared to previous year.
Due to the unprecedented business environment from the ongoing pandemic, and to protect the Group’s liquidity position, the Group has not declared a dividend for this financial year after last year’s dividend of AED 500 million ($136 million) to the Investment Corporation of Dubai.
HH Sheikh Ahmed bin Saeed Al Maktoum, chairman and chief executive, Emirates Airline and Group, said: “For the first 11 months of 2019-20, Emirates and dnata were performing strongly, and we were on track to deliver against our business targets. However, from mid-February things changed rapidly as the COVID-19 pandemic swept across the world, causing a sudden and tremendous drop in demand for international air travel as countries closed their borders and imposed stringent travel restrictions.
“Even without a pandemic, our industry has always been vulnerable to a multitude of external factors. In 2019-20, the further strengthening of the US dollar against major currencies eroded our profits to the tune of AED 1.0 billion, global airfreight demand remained soft for most of the year, and competition intensified in our key markets.
“Despite the challenges, Emirates and dnata delivered our 32nd consecutive year of profit, due to healthy demand for our award winning products and services, particularly in the second and third quarters of the year, combined with lower average fuel prices over the year.
“Every year we are tested on our agility and ability. While tackling the immediate challenges and taking advantage of opportunities that come our way, our decisions have always been guided by our long-term goal to build a profitable, sustainable, and responsible business based in Dubai.”
In 2019-20, the Group collectively invested AED 11.7 billion ($3.2 billion) in new aircraft and equipment, the acquisition of companies, modern facilities, the latest technologies, and employee initiatives, a decrease following last year’s record investment spend of AED 14.6 billion ($3.9 billion). It also continued to invest resources towards supporting communities, environmental initiatives, as well as incubator programmes that nurture talent and innovation to support future industry growth.
At the 2019 Dubai Air Show in November, Emirates placed a $16 billion order for 50 A350 XWBs, and a $8.8 billion order for 30 Boeing 787 Dreamliner aircraft. With first deliveries expected in 2023, these new aircraft will add to Emirates’ current fleet mix, and provide deployment flexibility within its long-haul hub model. In line with Emirates’ long-standing strategy to operate a modern and efficient fleet, these new aircraft will also keep its fleet age well below the industry average.
Highlights of the results
- Group revenue of AED 104 billion ($28.3 billion) impacted by planned Dubai International airport (DXB) runway closure in Q1 and COVID-19 pandemic in Q4
- Ends year with solid cash balance of AED 25.6 billion ($7.0 billion) Emirates reports a profit of AED 1.1 billion ($288 million), 21% up from the previous year
- Revenue declines by 6% to AED 92.0 billion ($25.1 billion), impacted by planned 45 days DXB runway closure and temporary suspension of passenger flights in March
- Airline capacity reduced to 59 billion ATKM with aircraft fleet size unchanged. dnata reports a profit of AED 618 million ($168 million), which includes AED 216 million ($59 million) one-time gain from sale of stake in an IT company, Accelya
- Revenue increases by 2% to AED 14.8 billion ($4.0 billion), reflecting business growth with international business accounting for 72% of revenue
- Profit impacted by: goodwill impairments (mainly in Travel) of AED 164 million ($45 million), write-offs due to Thomas Cook failure (Travel & Catering) of AED 96 million ($26 million), and impact of COVID-19 (across all business divisions) AED 274 million ($75 million)
- Expands global footprint with addition of new facilities and service capabilities across its airport operations, and catering divisions