dnata’s profits hit by Covid-19 and Thomas Cook collapse

Thomas Cook’s failure in 2019 cost dnata $26 million in write-offs but group secures string of new contracts keeping sales buoyant
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Covid-19, Thomas cook, Dnata

The Emirates group’s ground services division, dnata, increased revenues by 2% to $4 billion in 2019-20 but saw profits fall 57% down to $168 million, which includes $59 million one-time gain from the sale of its stake in Accelya.

Profits were impacted by goodwill impairments amounting to $45 million, write-offs due to Thomas Cook’s collapse amounting to $26 million and Covid-19, which has so far cost dnata $75 million.

But dnata managed to secure a string of new contracts across four divisions and saw particular growth in its catering arm. The firm’s international business now accounts for 72% of its revenue

Dnata invested more than $218 million in acquisitions, new facilities and equipment, technologies and people development during the year.

In 2019-20, dnata’s operating costs increased by 8% to $3.9 billion, in line with organic growth across its business divisions. Its cash balance was $1.4 billion, an increase of 4%.

Revenue from dnata’s UAE airport operations, including ground and cargo handling remained steady at $864 million.

The number of aircraft movements handled by dnata in the UAE declined by 11% to 188,000. This reflects the impact of the DXB runway closure in April-May 2019, and the suspension of scheduled passenger flights at both Dubai airports due to the pandemic.

During the year, dnata executed the UAE’s first green turnaround of a flydubai aircraft at DXB. Its airport services brand, marhaba, opened an expanded and refurbished lounge at Dubai International airport, and expanded its international network with a new lounge in Singapore’s Changi Airport.

dnata also strengthened its position in the UAE and regional cargo logistics industry by joining forces with Wallenborn Transports, Europe’s largest air-cargo road feeder services (RFS) operator.

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