Emirates Group profits slide 64% while cargo volumes remain flat
10 / 11 / 2016
The Emirates Group saw profits decline by 64% in the first half of the year, while cargo volumes remained stable and capacity increased 9%.
Group revenues for the first six months of the financial year, which include Emirates and dnata figures, increased by 1% on the same period last year to $12.7bn while profits slipped 64% year on year to $364m.
Cargo volume at the airline remained “stable” at 1.3m tonnes while capacity in freight tonne km terms increase 9% to 30.2bn available tonne km.
At dnata, cargo increased by 28% year on year to 1.2m tonnes on the back of new business and increased traffic at Dubai International (DXB).
Emirates Airline and group chairman and chief executive Sheikh Ahmed bin Saeed Al Maktoum said: “Our performance for the first half of the 2016-17 financial year continues to be impacted by the strong US dollar against other major currencies.
“Increased competition, as well as the sustained economic and political uncertainty in many parts of the world has added downward pressure on prices as well as dampened travel demand,
“The bleak global economic outlook appears to be the new norm, with no immediate resolution in sight.
“Against this backdrop, the Group has remained profitable and our solid business foundations continue to stand us in good stead. In the first six months of this year, both Emirates and dnata continued to grow in capability and capacity.
“Our past investments in product and services are now paying off, enabling us to retain valued clients and attract new customers – reflected in the airline’s passenger growth of 2.3m.
“We continue to make strategic investments, because we know we have to work even harder for every customer, and make every dollar spent go even further through innovation and driving efficiency across our business.”
During the period, the airline received 16 wide-body aircraft – 8 Airbus A380s, and 8 Boeing 777s, with 20 more new aircraft scheduled to be delivered before the end of the financial year.
It also retired 19 older aircraft from its fleet with further 8 to be returned by 31 March 2017.
Revenues at the airline were down by 1% to $11.4bn while net profits declined by 75% to $214m on the back of exchange rate effects and tough market conditions leading to lower fares.
Operating costs grew by 5% despite fuel costs coming down by 10%.
Revenue at dnata was up by 14% to $1.6bn while profits were down 1% to $150m on currency effects and start-up costs related to acquisitions.