Results tempered by DXB runway closure and COVID-19 pandemic
The Emirates Group announced its 32nd consecutive year of profit, against a drop in revenue mainly attributed to reduced operations during the planned DXB runway closure in the first quarter, and the impact of flight and travel restrictions due to the COVID-19 pandemic in the fourth quarter.
According to its 2019-20 Annual Report, the Emirates Group posted a profit of $456 million for the financial year ended 31 March 2020, down 28% from last year.
The Group’s revenue reached $28.3 billion, a decline of 5% over last year’s results. The Group’s cash balance was $7 billion, up 15% from last year mainly due to a strong business performance up to February 2020 and lower fuel cost compared to previous year.
Due to the unprecedented business environment from the ongoing pandemic, and to protect the Group’s liquidity position, the Group has not declared a dividend for this financial year after last year’s dividend of $136 million to the Investment Corporation of Dubai.
Emirates SkyCargo continued to deliver a solid performance in a highly competitive market, contributing to 13% of the airline’s total transport revenue.
With the lingering weakness in air freight demand over most of the year, Emirates’ cargo division reported a revenue of $ 3.1 billion, a decrease of 14% over last year.
His Highness Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group, said: “For the first 11 months of 2019-20, Emirates and dnata were performing strongly, and we were on track to deliver against our business targets.
"However, from mid-February things changed rapidly as the COVID-19 pandemic swept across the world, causing a sudden and tremendous drop in demand for international air travel as countries closed their borders and imposed stringent travel restrictions.
"Despite the challenges, Emirates and dnata delivered our 32nd consecutive year of profit, due to healthy demand for our award winning products and services, particularly in the second and third quarters of the year, combined with lower average fuel prices over the year.
In 2019-20, the Group collectively invested $ 3.2 billion in new aircraft and equipment, the acquisition of companies, modern facilities, the latest technologies, and employee initiatives, a decrease following last year’s record investment spend of $3.9 billion.
At the 2019 Dubai Air Show in November, Emirates placed a $16 billion order for 50 A350 XWBs, and a $8.8 billion order for 30 Boeing 787 Dreamliner aircraft.
dnata’s key investments during the year included: the significant expansion of catering capabilities in North America with the opening of new operations in Vancouver, Houston, Boston, Los Angeles and San Francisco.
Across its more than 120 subsidiaries, the Group’s total workforce remained nearly unchanged with 105,730 employees, representing over 160 different nationalities.
Sheikh Ahmed concluded: “The COVID-19 pandemic will have a huge impact on our 2020-21 performance, with Emirates’ passenger operations temporarily suspended since 25 March, and dnata’s businesses similarly affected by the drying up of flight traffic and travel demand all around the world.
"We expect it will take 18 months at least, before travel demand returns to a semblance of normality. In the meantime, we are actively engaging with regulators and relevant stakeholders, as they work to define standards to ensure the health and safety of travellers and operators in a post-pandemic world.
"Emirates and dnata stand to reactivate our operations to serve our customers, as soon as circumstances allow.”