The Emirates Group has announced a 67% profit surge of AED 4.1-billion (US $1.1 billion) for the financial year ended 31 March 2018, but chairman and CEO HH Sheikh Ahmed bin Saeed Al Maktoum, says the market remains ‘tough’.
“Business conditions in 2017-18, while improved, remained tough. We saw ongoing political instability, currency volatility and devaluations in Africa, rising oil prices which drove our costs up, and downward pressure on margins from relentless competition,” he said.
These factors were offset by tailwinds in other sectors.
“On the positive side, we benefitted from a healthy recovery in the global air cargo industry, as well as the relative strengthening of key currencies against the US dollar,” said Sheikh Ahmed.
Emirates chairman and CEO, HH Sheikh Ahmed bin Saeed Al Maktoum
The financial results released Wednesday mark the airline’s 30th consecutive year of growth and come after an 82% drop in profit to AED 1.3 billion (US $354 million) was reported for Emirates Airline at this time last year.
The AED4.1-billion reported today is for the entirety of the Emirates Group, which includes travel and logistics subsidiary dnata.
“In 2017-18, Emirates and dnata delivered our 30th consecutive year of profit, recorded growth across the business, and continued to invest in initiatives and infrastructure that will secure our future success,” said Sheikh Ahmed.
In 2017-18, the Emirates collectively invested AED 9-billion (US $2.5 billion) in new aircraft and equipment, the acquisition of companies, modern facilities, the latest technologies, and staff initiatives.
The Group’s revenue reached AED 102.4 billion (US$ 27.9.billion), an increase of 8% over last year’s results, and the Group’s cash balance increased by 33% to AED 25.4 billion (US$ 6.9 billion) supported by the bond issued in March and strong sales due to the early Easter holidays at the end of March.
“While expanding our business and growing revenues, we also tightened our cost discipline. Across the Group, we progressed various initiatives to rebuild and streamline our back office operations with new technology, systems and processes. In 2017-18, our reduced recruitment activity, coupled with restructured ways of working gave us gains in productivity, and a slowdown in manpower cost increases,” said Sheikh Ahmed.
“We’ve always responded to the challenges of each business cycle with agility, while never losing sight of the future, and this year was no exception,” he added.
Emirates announced two significant commitments for new aircraft during the year: a US$ 15.1 billion agreement for 40 Boeing 787-10 Dreamliners which will be delivered from 2022, and a US$ 16 billion agreement for 36 additional A380 aircraft, including 16 options.
Sheikh Ahmed concluded: “Looking ahead, Emirates and dnata remain focussed on delivering safe, efficient and high quality services consistently to our customers. Our ongoing investments in our people, technology, and infrastructure will help us maintain our competitive edge, and ensure that we are ready to meet the opportunities and stay on course for sustainable and profitable growth.”