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Emirates Group reports Dh10b turnaround

Emirates airline’s profit for the first half of 2022-23 hit a new record of Dh4.0 billion, compared to last year’s loss of Dh5.8 billion as it continued to focus on restoring its global passenger network and connections through its Dubai hub

The Emirates Group reported on Thursday record half-year net profit of Dh4.2 billion for 2022-23 financial year, reflecting a strong turnaround of almost Dh10 billion and recovery after last year’s loss of Dh5.7 billion.

The group, which comprises Emirates airline and dnata, posted a 128 per cent jump in revenue to Dh56.3 billion, driven by strong demand for air transport across the world with the further easing and removal of pandemic-related travel restrictions. The group’s earnings before tax, depreciation and amortisation (Ebitda) surged to Dh15.3 billion, a marked improvement from Dh5.6 billion during the same 2021-22 period, underscoring its strong operating profitability.

With a strong cash position of Dh32.6 billion on September 30, 2022, compared to Dh25.8 billion as on March 31, 2022, the group has been able to tap on its own strong cash reserves to support business needs, including debt payments and pandemic-related commitments, Emirates said in a statement.

Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates airline and group, said the group expects to return to its track record of profitability at the close of the full financial year.

"The group’s record performance for the first six months of 2022-23 is the result of forward planning, agile business response, and the efforts of our talented and committed workforce. Across the group, our operations recovery accelerated as more countries eased and removed travel restrictions.”

He said the group remains focussed on restoring its operations to pre-pandemic levels and recruiting the right skills for our current and future requirements going forward.

“We expect customer demand across our business divisions to remain strong in H2 2022-23. However, the horizon is not without headwinds, and we are keeping a close watch on inflationary costs and other macro-challenges such as the strong US dollar and the fiscal policies of major markets."

The group’s employee base, compared to March 31, 2022, grew 10 per cent to an overall count of 93,893. Both Emirates and dnata have also embarked on targeted recruitment drives to support their future requirements.

Emirates airline’s profit for the first half of 2022-23 hit a new record of Dh4.0 billion, compared to last year’s loss of Dh5.8 billion as it continued to focus on restoring its global passenger network and connections through its Dubai hub, restarting services and adding flights to meet customer demand across markets.

In June, it launched services to Tel Aviv, a new destination. Expanding connectivity options for customers, Emirates launched codeshare and interline agreements with 12 airlines in the first six months of 2022-23. By September 30, the airline was operating passenger and cargo services to 140 airports, utilising its entire Boeing 777 fleet and 73 A380s.

During the first six months of 2022-23, Emirates took delivery of two new Boeing 777 freighters and returned one older freighter from its fleet as part of its long-standing strategy to minimise its emissions footprint and operate modern, efficient aircraft. With new passenger aircraft only expected to arrive in 2024, Emirates this month began its multi-billion dollar programme to retrofit 120 aircraft with its latest cabin interiors and products, said the statement. The airline carried 20 million passengers between April 1 and September 30, 2022, up 228 per cent from the same period last year.

Overall capacity during the first six months of the year increased by 40 per cent to 22.8 billion Available Tonne Kilometres due to an expanded flight programme as more countries eased travel restrictions.

“The airline’s strong turnaround performance is driven by strong passenger demand for international travel across markets and shows the airline’s ability to plan ahead to meet the demand, activate capacity, and attract customers with its high-quality products and value proposition,” it said.

In the first half of 2022-23, dnata doubled its revenue Dh7.3 billion and posted an overall profit of Dh 236 million, compared to last year’s Dh85 million as it grew its footprint with new long-term concession contracts to provide services in Zanzibar (dnata airport operations), and Ras Al Khaimah (Alpha Catering). Its Airport Operations division entered the German market with the acquisition of Wisskirchen Handling Services, the exclusive operator at Cologne Bonn Cargo Centre; and acquired the remaining 30 per cent stake to assume full ownership of its ground handling business in Brazil.

Dnata’s airport operations remains the largest contributor to revenue with Dh3.5 billion, a 37 per cent increase as compared to the same period last year, as customer demand continued to pick up. Across its operations, the number of aircraft turns handled by dnata increased by 56 per cent to 347,581, and it handled 1.4 million tonnes of cargo.

Dnata’s flight catering and retail operations, contributed Dh2.4 billion to its revenue while the travel division contributed Dh1.2 billion to revenue, up 708 per cent compared to Dh147 million for the same period last year, driven largely by the strong recovery of travel demand and bookings in its Middle East and UK businesses.

KEY TAKEAWAYS

Emirates Group

> Record half-year profit of Dh4.2 billion ($1.2 billion) reflects strong turnaround and recovery after last year’s loss of Dh5.7 billion ($1.6 billion)

> Revenue up 128 per cent to Dh56.3 billion ($15.3 billion)

> The group’s employee base grew 10 per cent to an overall count of 93,893

Emirates airline

> Revenue up 131 per cent to Dh50.1 billion ($13.7 billion), and profit of Dh4 billion ($1.1 billion) compared to Dh5.8 billion ($1.6 billion) loss for the same period last year

> The airline was operating passenger and cargo services to 140 airports, utilising its entire Boeing 777 fleet and 73 A380s

> The airline carried 20 million passengers between April 1 and September 30, 2022, up 228 per cent from the same period last yea

Dnata

> Revenue doubled to Dh7.3 billion ($2 billion), profit of Dh236 million ($64 million) compared to Dh85 million ($23 million) for the same period last year

> Dnata’s flight catering and retail operations, contributed Dh2.4 billion to its revenue while the travel division contributed Dh1.2 billion to revenue

> Cost inflation across the business dampens performance even as operations ramp up

— issacjohn@khaleejtimes.com