Emirates Group announces 24th consecutive year of profit

The Emirates Group has announced its 24th consecutive year of profit and company wide growth amidst unprecedented economic pressure and record high fuel prices.

Released yesterday in the Group's 2011-12 Annual Report the company posted a AED 2.3 billion (US $ 629 million) net profit, with dnata marking its highest ever profit in 52 years of operation. Despite fundamental challenges, the Group's revenue reached a record high, climbing to AED 67.4 billion (US $ 18.4 billion) an increase of 17.8 percent on last year's results. The Group's cash balance grew by 9.5 percent reaching a strong AED 17.6 billion (US $ 4.8 billion).

"Achieving our 24th consecutive year of profit and maintaining an upward growth trajectory is an achievement that belies the industry norm, said Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group.

"Throughout the 2011-12 financial year the Group has collectively invested close to AED 14 billion (US $ 3.8 billion) in new products. This investment has garnered new customers and increased our international presence. Successful business growth is not a matter of luck, it is the result of sustained and calculated investment. Every dirham that we earn is strategically ploughed back into our business and it is this foresight that has allowed the Group to maintain such strong and consistent profitability," he said.

Despite a difficult operating environment, the Group continued to invest in and expand on its employee base, increasing its overall staff count by more than 10 percent.

During the year Emirates received a staggering 22 new aircraft, its highest in any single year, funded by a wide variety of financing structures. With an increased fleet, Emirates further invested in its network by adding 11 new destinations and increasing capacity to 34 cities, a record for the airline.

"Managing volatile exchange rates, coupled with our highest ever fuel bill has required immense tenacity. Retaining growth and remaining profitable in these challenging economic times shows our profound understanding of the markets that we do business in," added Ahmed.

Reaching a record profit, dnata stayed true to its proven acquisition strategy, gaining a majority stake in online travel agency, Travel Republic Ltd and a 50 percent interest in Wings Inflight Services in South Africa. Importantly the results for 2011-12 highlight that 55 percent of dnata's revenue is derived from its international operations, an increase of 17 percentage points over last year

In the 2011-12 financial year Emirates fuel bill increased by 44.4 percent over last year to reach AED 24.3 billion (US $ 6.6 billion). With operating costs increasing by 24 percent compared to a revenue increase of 16.2 percent over last year, Emirates bore the brunt of the crippling cost of fuel for nearly one year, before reluctantly introducing a fuel surcharge on all tickets.

In addition to the cost of fuel Emirates had an operationally challenging year with the political unrest across the Middle East and North Africa affecting flight schedules. By keeping a tight focus on operations and modifying capacity and schedules Emirates was able to maintain profitability.

"In the last five years, Emirates capacity measured in Available Seat Kilometres, has increased by almost 100 percent facilitating new trade links and creating a new flow of passenger traffic. Being the first to capitalize on these new opportunities has allowed us to gain a distinct competitive advantage, one that we intend to maintain," said Ahmed.

Highlighting its sound financials, Emirates launched its highly successful US $ 1 billion bond in June last year and despite many traditional financing partners suffering from the Eurozone debt crisis, the bond was well received by global investors reflecting confidence in the Emirates business model. In addition to this, Emirates repaid a Singapore Dollar 250 million bond in full that matured in June 2011. The bond, listed on the Singapore Stock Exchange, was originally issued in 2006 with a five year term.

"We move into the new financial year with cautious optimism, navigating our way through the difficult economic climate with a clear vision for our continued success. We understand that succeeding in this industry requires determination and we are unapologetic about our drive to be the best," Ahmed said.