Emirates Group swings to record H1 net profit of $1.2bn

Emirates Group has posted a 2022-23 half-year net profit of AED4.2 billion ($1.2 billion), a record half-year performance, and a turnaround of almost AED10 billion from its AED5.7 billion ($1.6 billion) loss for the same period last year.

The group also reported an EBITDA of AED15.3 billion ($4.2 billion), a marked improvement from AED5.6 billion ($1.5 billion) during the same period last year, illustrating its strong operating profitability.

Group revenue was AED56.3 billion ($15.3 billion) for the first six months of 2022-23, up 128% from AED24.7 billion ($6.7 billion) last year. This was driven by the strong demand for air transport across the world with the further easing and removal of pandemic-related travel restrictions.

The Group closed the first half year of 2022-23 with a strong cash position of AED32.6 billion ($8.9 billion) on 30 September 2022, compared to AED25.8 billion ($7.0 billion), as on 31 March 2022. The Group has been able to tap on its own strong cash reserves to support business needs, including debt payments and pandemic-related commitments.

Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group said: "The Group’s record performance for the first six months of 2022-23 is the result of forward planning, agile business response, and the efforts of our talented and committed workforce.

"Across the Group, our operations recovery accelerated as more countries eased and removed travel restrictions. We were ready and amongst the first movers to serve the strong customer demand thanks to our robust business plans, the support of our industry partners, and our ongoing investments in people, technology, and products and services.

"For the coming months, we remain focussed on restoring our operations to pre-pandemic levels and recruiting the right skills for our current and future requirements. We expect customer demand across our business divisions to remain strong in H2 2022-23. However, the horizon is not without headwinds, and we are keeping a close watch on inflationary costs and other macro-challenges such as the strong US dollar and the fiscal policies of major markets. The Group expects to return to our track record of profitability at the close of our full financial year."

Emirates Group’s employee base, compared to March 31, 2022, grew 10% to an overall count of 93,893 at September 30, 2022. Both Emirates and dnata have also embarked on targeted recruitment drives to support their future requirements.

Emirates airline
Emirates profit for the first half of 2022-23 hit a new record of AED4.0 billion ($1.1 billion), compared to last year’s loss of AED5.8 billion ($1.6 billion). Despite an unfavourable currency exchange environment, Emirates revenue, including other operating income, of AED50.1 billion ($13.7 billion) was up 131% compared with the AED21.7 billion ($5.9 billion) recorded during the same period last year.

The airline’s strong turnaround performance is driven by strong passenger demand for international travel across markets and shows the airline’s ability to plan ahead to meet the demand, activate capacity, and attract customers with its high-quality products and value proposition.

Emirates’ operating costs increased by 73% against an overall capacity growth of 40% mainly due to the substantial increase in fuel costs which more than tripled compared to the same period last year.

This was primarily due to a 65% higher fuel uplift in line with increased flight operations, and the doubling of average oil prices during this period. Fuel, which was the largest component of the airline’s operating cost in pre-pandemic reporting cycles, accounted for 38% of operating costs, one of the highest ratios ever, compared to 20% in the first six months of last year.

Driven by strong demand and increased operations during the six months, Emirates’ EBITDA grew nearly three times to AED14.7 billion ($4.0 billion) compared to AED5.0 billion ($1.4 billion) for the same period last year.

Overall capacity during the first six months of the year increased by 40% to 22.8 billion Available Tonne Kilometres (ATKM) due to an expanded flight programme as more countries eased travel restrictions.  Capacity measured in Available Seat Kilometres (ASKM), increased by 123%, whilst passenger traffic carried measured in Revenue Passenger Kilometres (RPKM) was up by 265% with an average Passenger Seat Factor of 78.5%, compared with 47.9% during the same period last year.

Emirates carried 20.0 million passengers between April 1 and September 30, 2022, up 228% from the same period last year. Emirates Skycargo uplifted 936,000 tonnes in the first six months of the year, a 14% decrease compared to the same period last year, as the airline shifted capacity from its "mini-freighters" back to passenger operations.

dnata
In the first half of 2022-23, dnata’s revenue, including other operating income, of AED7.3 billion ($2.0 billion) doubled compared to AED3.7 billion ($1 billion) generated in the same period last year.

Overall profit for dnata is AED236 million ($64 million), compared to last year’s AED85 million ($23 million).

dnata’s airport operations remains the largest contributor to revenue with AED3.5 billion ($944 million), a 37% increase as compared to the same period last year, as customer demand continued to pick up particularly in its UAE, US, Italy and UK businesses.  Across its operations, the number of aircraft turns handled by dnata increased by 56% to 347,581, and it handled 1.4 million tonnes of cargo, slightly down by 2% reflecting its airline customers’ increased focus on passenger operations.

dnata’s flight catering and retail operations, contributed AED2.4 billion ($651 million) to its revenue, up 212% with strong production increases in Australia, the UK and US to meet customer demand. The number of meals uplifted increased sharply by 204% to 50.5 million meals after last year’s 16.6 million.

dnata's travel division contributed AED1.2 billion ($323 million) to revenue, up 708% compared to AED147 million ($40 million) for the same period last year, driven largely by the strong recovery of travel demand and bookings in its Middle East and UK businesses. The division reported an underlying total transactional value (TTV) sales of AED4.7 billion ($1.3 billion), compared to AED726 million ($198 million) for the same period last year. – TradeArabia News Service