Emirates’ chief executive says 2018-19 was ‘tough’ for the group despite reporting its 31st consecutive year of profit.
The group took AED 2.3 billion (£482 million) profits for the year, but this was down 44 per cent on the previous year owing to higher oil prices and a strengthened US dollar, according to CEO Sheikh Ahmed bin Saeed Al Maktoum. Profits for the Emirates airline alone dropped 69 per cent to more than £182.5 million.
However, revenue across the group was up 7 per cent to nearly £23 billion. The group’s cash balance was down 13 per cent on last year, mainly due to investments including acquisitions and payment of the previous year’s dividend.
In 2018-19, the Emirates Group invested more than £3 billion into new aircraft and equipment, the acquisition of companies, facilities, technologies and staff initiatives. In February, it placed an order for 40 A330-900s, and it is also due to take delivery of 14 additional A380s by the end of 2021, taking its total order for the superjumbo to 123 aircraft.
Dnata also acquired Q Catering, Snap Fresh and 121 Inflight Catering and became the owner of Dubai Express and Freightworks. It also took a 51 per cent stake in Bollore Logistics, as well as a majority stake in BD4travel.
Sheikh Ahmed commented: “2018-19 has been tough, and our performance was not as strong as we would have liked. Higher oil prices and the strengthened US dollar eroded our earnings, even as competition intensified in our key markets. The uptick in global airfreight demand from the previous year appears to have gone into reverse gear, and we also saw travel demand weaken, particularly in our region, impacting both dnata and Emirates.
“Every business cycle is different, and we continue to work smart and hard to tackle the challenges and take advantage of opportunities. Our goal has always been to build a profitable, sustainable and responsible business based in Dubai, and these principles continue to guide our decisions and investments. In 2018-19, Emirates and dnata delivered our 31st consecutive year of profit, recorded growth across the business and invested in initiatives and infrastructure that will secure our future success.”
Looking ahead, Sheikh Ahmed added: “It’s hard to predict the year ahead, but both Emirates and dnata are well positioned to navigate speed bumps, as well as to compete and succeed in the global marketplace. We must continually up our game; that’s why we invest in our people, technology and infrastructure to help us maintain our competitive edge. As a responsible business, we also invest resources towards supporting communities, conversation and environmental initiatives, as well as incubating talent and innovation that will propel our industry in the future.”