The Emirates Group has announced another record performance with net profits of US $762 million (Lm263 million) for the financial year ended 31 March – up five per cent from the previous year’s record profits of $726 million (Lm250 million).
Group revenue increased by an impressive $1.4 billion (Lm483 million) or 27 per cent, to
$6.6 billion (Lm2.3 billion) compared to $5.2 billion (Lm1.8 billion) last year. The Group’s cash balance was a robust $3 billion (Lm1 billion) at the end of March, an improvement of 28.6 per cent against a year earlier.
For 2005-2006 Emirates will pay an increased dividend of $105 million (Lm36 million) to its owner, the Government of Dubai, compared to $100 million (Lm34 million) last year. In total, the ownership will have received $396 million (Lm137 million) from Emirates since the financial year 2000-2001.
The 2005-2006 annual report of the Emirates Group – comprising Emirates Airline, Dnata and subsidiary companies – was released in Dubai at a news conference hosted by His Highness Sheikh Ahmed bin Saeed Al-Maktoum, Chairman and chief executive, Emirates Airline and Group.
The Group’s sharp sales growth and record returns reflect customers’ increasing preference for its products, as illustrated by the two million more passengers who flew Emirates in the latest financial year, for a new record total of 14.5 million.
Sheikh Ahmed said: “These results clearly show that Emirates’ customer-oriented approach and investments in providing a quality product - the best aircraft that money can buy, top-flight service and travel experience at a competitive price – has paid off in terms of retaining and winning new customers globally.”
He continued: “It has been another tough year with pressure from fuel costs continuously dampening our robust net income production. Emirates has returned its 18th consecutive annual profit, and we are pleased to have achieved this solid performance while expanding our operations in an increasingly competitive environment.”
Across the Group, initiatives to improve efficiency and keep a tight rein on costs have also contributed to the positive results, as the Group maintained a strong net profit margin of 11.8 per cent.
Fuel costs remained the top expenditure accounting for 27.2 per cent of total operating costs, up from 21.4 per cent the previous year. Like other airlines, Emirates was forced to increase fuel surcharges on tickets, which only covered 41 per cent of incremental costs.
The airline’s jet fuel risk management programme helped mitigate fuel costs, saving the company $189 million (Lm65 million) in 2005-2006, 50 per cent more than last year.
The outlook however, remains sombre in a volatile global market where oil prices have hit new highs.
Sheikh Ahmed concluded: “We are gratified by the strong financial results of the Group and intend to re-invest the retained profits into acquiring advanced equipment and facilities, hiring and training the best people for our business, and putting in place superior support services – thus keeping the airline, Dnata and group subsidiary companies competitive, while providing our customers with the high quality services they have come to expect from us.”
Emirates Airline’s revenues totalled $6.3 billion (Lm2.2 billion) for the year, $1.3 billion (Lm448 million) or 27 per cent above income of $4.9 billion (Lm1.7 billion) in 2004-2005. Airline profits of $674 million (Lm232 million) also topped the previous year’s record profits of $656 million (Lm226 million).
With the addition of 16 new aircrafts during the financial year, Emirates’ fleet reached 91 at the end of March. The current fleet (April 2006) comprises 92 aircraft – 83 wide-bodied passenger aircraft and nine freighters, with an average age of 61 months – more than ten years younger than the industry’s average of 187 months.
Emirates launched services to eight new cities in 2005-2006 – Alexandria, Abidjan, Addis Ababa, Hamburg, Kolkata, Thiruvananthapuram, Seoul and Lilongwe (cargo-only) – bringing the network total to 83 destinations, five of them cargo-only.
The airline operates four flights weekly from Dubai to Malta via Larnaca, Cyprus, on Monday, Wednesday, Friday and Sunday on A330-200.