The Emirates Group revenues increased by 13 per cent to Dh87.8 billion while its net profit jumped by 32 per cent to Dh4.1 billion compared to last financial year 2012-13.

Photo: Abdul Basit/Khaleej Times

Dubai’s flagship carrier Emirates airline on Thursday announced its 26^th consecutive year of profit that jumped by 43 per cent to Dh3.3 billion while its revenue increased by 13 per cent to Dh 82.6 billion on new routes and more passengers during the financial year 2013-14.

The Emirates Group revenues increased by 13 per cent to Dh87.8 billion while its net profit jumped by 32 per cent to Dh4.1 billion compared to last financial year 2012-13.

The results were announced by Shaikh Ahmad Bin Saeed Al Maktoum, President of Dubai Civil Aviation and Chairman and Chief Executive Officer of Emirates airline and Group during a news conference at Emirates Headquarters in Dubai.

Shaikh Ahmed said that profit margin is more than double the industry. “Our cash of Dh19 billion is lower than last year but healthy to go further,” he explained. Last year Emirates flew 44.5 million passengers with closed to 80 per cent load-factor, he informed.

Dnata also outperformed last year’s record profit to reach Dh829 million. In its 55 years of operation, 2013-14 has been dnata’s most successful yet, building on its very strong results in the previous year. Dnata grew its revenue to Dh7.6 billion, an increase of 14 per cent.

“Achieving our 26^th consecutive year of profit in a financial year marked by record increases in capacity and significant business investments across the Group, is testimony to the strength of our brands and our business fundamentals,” he said.

“Throughout 2013-14 the Group has collectively invested over Dh22 billion, the highest amount ever in one financial year. We know that to be a sustainable and profitable business we have to keep adding value to our stakeholders, our customers, partners and employees. To do this, we need efficient new aircraft, quality products and services, and cutting-edge facilities. Every dirham invested has been carefully considered against short and long-term goals - be it enhancing our capabilities, improving our product, or expanding our business footprint,” he told reporters.

The Group also continued to invest in and expand on its employee base, increasing its overall staff count by 11 per cent to over 75,000-strong representing over 160 different nationalities, across its more than 80 subsidiaries and companies. Revenue per airline employee increased by 4 per cent to Dh1.9 million.

“We are moving into the new financial year with confidence, and a strong foundation for continued profitability with our strong balance sheet, solid track record, diverse global portfolio and international talent pool,” said Sheikh Ahmed. “Operating in a dynamic and highly-competitive environment means we have to stay agile, and work even harder to meet and exceed our customers’ expectations. With the help of our 75,000 strong multicultural workforce, we have no doubt that we will be able to capitalise on the opportunities in the year ahead.”

Similar to the last financial year, the Group declared a dividend of Dh1 billion to the Investment Corporation of Dubai.

Emirates performance

In 2013-14, Emirates increased its capacity by 5.9 billion Available Tonne Kilometres (ATKMs), the largest capacity increase in the airline’s history in a single year. This brings Emirates’ total passenger and cargo capacity to 46.8 billion ATKMs at the end of the financial year. The airline also marked a new record of over 1 million block hours in terms of fleet production.

Emirates received 24 new aircraft during the year, including 16 A380s, six Boeing 777-300ERs and two Boeing 777Fs, bringing its total fleet count to 217. The airline remains the world’s largest operator of the Boeing 777 and A380 – both aircraft being amongst the most modern and efficient wide-bodied jets in the sky today.

With the delivery of new aircraft, Emirates launched nine new destinations: Boston, Clark, Conakry, Haneda, Kabul, Kiev, Sialkot, Stockholm and Taipei, as well as a new service between Milan and New York.

Emirates revenue for the first time surpassed Dh80 billion, at a new record of Dh82.6 billion. While the average price of jet fuel remained high, it was slightly lower compared to last year and has supported Emirates’ bottom line improvement. Emirates’ fuel bill increased by 10 per cent over last year to reach Dh30.7 billion. Total operating costs increased by 12 per cent, compared to a revenue increase of 13 per cent over the 2012-13 financial year.

The airline successfully managed increased competitive pressure across all markets to record a profit of Dh3.3 billion, an increase of 43 per cent over last year’s results, and a healthy profit margin of 3.9 per cent.

Carrying a record 44.5 million passengers, up 13 per cent from last year, Emirates maintained a robust Passenger Seat Factor at 79.4 per cent, nearly consistent with last year’s results in spite of a 15 per cent increase in seat capacity by Available Seat Kilometres (ASKMs). This highlights the strong consumer desire to fly on Emirates’ state-of-the-art aircraft.

Passenger yield remained steady at 30.4 fils (8.3 US cents) per Revenue Passenger Kilometre (RPKM).

Revenue generated from across Emirates’ six regions continues to be well balanced, with no region contributing more than 30 per cent of overall revenues. East Asia and Australasia remained the highest revenue contributing region with Dh23.8 billion, up 14 per cent from 2012-13. Gulf and Middle East revenue increased 17 per cent to Dh8.3 billion, and Europe revenue increased 16 per cent to Dh23.4 billion, reflecting new destinations as well as increased frequency and capacity to these regions.

Across the rest of the globe Emirates saw strong revenue increases from Africa up 15 per cent to Dh7.7 billion, The Americas up 11 per cent to Dh9.2 billion and West Asia and Indian Ocean with Dh8.3 billion in revenue, up 3 per cent.

Looking forward to 2014-15, Emirates has to date announced five new passenger routes including Abuja, Brussels, Chicago, Kano and Oslo.

Defying the industry trend, the 2013-14 financial year has been a strong one for Emirates SkyCargo who for the first time reported revenue over US$ 3 billion to reach Dh11.3 billion mark, a 9 per cent increase over last year.

Contributing 15 per cent of the airline’s total transport revenue Emirates SkyCargo continues to play an integral role in the company’s expanding operations.

Emirates’ Destination and Leisure Management including hotels recorded revenue of Dh623 million, an impressive increase of 35 per cent over last year. This positive development was supported by the first full year of operation of the JW Marriott Marquis Hotel in Dubai, the world’s tallest hotel. The second tower of the hotel will be fully operational later this year.

Dnata performance

In its 55 years of operation, 2013-14 has been dnata’s most successful yet, building on its very strong results in the previous year. Dnata grew its revenue to Dh7.6 billion, an increase of 14 per cent, through organic growth and as well as strategic international acquisitions. For the first time in the company’s history, dnata’s international business accounted for 50 per cent of its revenue. Dnata also outperformed last year’s record profit to reach Dh829 million.

In 2013-14, dnata invested a record Dh850 million into its business, laying the foundations for future growth.

Its key investments included: the development of dnata City – a 20-acre cargo logistics centre at London Heathrow Airport, additional warehousing capacity at seven airports across the UK, and capacity expansion of Freight Gate 3 at Dubai airport.

Dnata’s international growth continued with the addition of several new companies in its portfolio including the acquisition of Broadlex, an aircraft cleaning service provider in Australia, and Gold Medal Travel Group, one of the leading distributors of long-haul travel products in the UK. dnata also acquired Air Chefs in Italy, by taking over the remaining 50 per cent stake from Servair.

Revenue from dnata’s airport operations increased strongly by 15 per cent to reach Dh2.8 billion. It remains dnata’s largest revenue stream. The year’s performance was primarily driven by strong volume growth in the UK and Dubai, including first time handling operations at Dubai World Central where commercial passenger flights began in October, and also in a number of dnata’s other global operations including new services from Broadlex. Dnata today handles 250 airlines at 27 airports in nine countries and is the world’s largest ground handler of the A380.

In 2013-14, dnata’s operating costs increased by 15 per cent to Dh6.7 billion, reflecting the first months of integrating the newly acquired companies across its airport, catering and travel businesses.

Similar to last year, dnata’s cash balance of Dh2.4 billion remains strong and the business delivered a solid Dh1.1 billion operating cash flow in 2013-14.