Emirates Group records 24th consecutive year of profit
5/24/2012 5:00:10 PM -
The Emirates Group has posted a net profit of AED 2.3 billion ($629 million) for the 2011-12 annual year, making it the 24th consecutive year of profit and growth across its subsidiaries, in spite of unprecedented economic pressure and record high fuel prices.
The ground handling subsidiary of Emirates, Dnata, posted a record profit $220 million, its highest ever profit in 52 years of operation.
The Chairman and Chief Executive of Emirates Airline and Group, His Highness Sheikh Ahmed bin Saeed Al Maktoum, who announced the results in Dubai, said in spite of fundamental challenges, the group’s revenue reached a record high, climbing to $18.4 billion, an increase of 17.8 per cent over the previous year’s results.
The group’s cash balance also grew by 9.5 per cent reaching $4.8 billion.
“Achieving our 24th consecutive year of profit and maintaining an upward growth trajectory is an achievement that belies the industry norm,” the Group chairman said.
Emirates revenues reached a record high of $17 billion, growing by 14.9 per cent when compared to the 2010-11 financial year. Despite this strong revenue growth, the stifling cost of jet fuel impacted the company’s profitability, with the airline’s profit sitting significantly lower than the previous year at $409 million, representing a dip of 72.1 per cent over last year’s record results.
During the year under review, group collectively invested close to $3.8 billion in new products, an investment which garnered new customers and increased the airline’s international presence.
Sheikh Ahmed said in spite of a difficult operating environment, the group continued to invest in and expand on its employee base, increasing its overall staff count by more than 10 per cent. The group employs a total of 63,000 multicultural workforce from 160 countries.
During the year, Emirates received 22 new aircrafts, its highest in any single year, funded by a wide variety of financing structures. With an increased fleet, the airline further invested in its network by adding 11 new destinations and increasing capacity to 34 cities, a record for the airline.
“Managing volatile exchange rates, coupled with our highest ever fuel bill has required immense tenacity. Retaining growth and remaining profitable in these challenging economic times shows our profound understanding of the markets that we do business in,” added Sheikh Ahmed.
Reaching a record profit, Dnata stayed true to its proven acquisition strategy, gaining a majority stake in online travel agency, Travel Republic Ltd and a 50 per cent interest in Wings Inflight Services in South Africa.
“Importantly, the results for 2011-12 highlight that 55 per cent of Dnata’s revenue is derived from its international operations, an increase of 17 percentage points over last year,” the group chairman explained.
In the 2011-12 financial year Emirates’ fuel bill increased by 44.4 per cent over last year to reach AED 24.3 billion (US$ 6.6 billion). With operating costs increasing by 24 per cent compared to a revenue increase of 16.2 per cent over last year, Emirates bore the brunt of the crippling cost of fuel for nearly one year, before reluctantly introducing a fuel surcharge on all tickets.
In addition to the cost of fuel, Emirates had an operationally challenging year with the political unrest across the Middle East and North Africa affecting flight schedules. By keeping a tight focus on operations and modifying capacity and schedules Emirates had been able to maintain profitability.