Dubai: Emirates Group has generated ‘record’ half-half year profit of Dh4.2 billion, confirming that the Dubai entity has turned in a fast turnaround from last year’s loss of Dh5.7 billion. Revenues are a substantial 128 per cent higher to Dh56.3 billion.
"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," said Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group. "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 revenue and profit came about despite higher cost of operations, notably from the steep spike in fuel.
Heading towards full network utilisation
Group revenue turned in Dh56.3 billion for the first six months of Emirates' 2022-23 financial year, up 128 per cent from Dh24.7 billion last year. Further easing and removal of pandemic-related travel restrictions across the airline's operations helped with that triple-digit gain.
Emirates' flights onboarded 20million passengers between April 1 and September 30, up 228 per cent from the same period last year, while the Skycargo operations lifted 936,000 tonnes, which is a 14 per cent decrease. This was because the Dubai airline 'shifted capacity from its "mini-freighters" back to passenger operations'.
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
'First mover' advantage
"Our operations recovery accelerated as more countries eased and removed travel restrictions," said Sheikh Ahmed. "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."
How did the airline do?
The airline revenue are up 131 per cent to Dh50.1 billion and netting a profit of Dh4 billion, which compares to the Dh5.8 billion loss last year. The 'performance shows airline’s ability to meet strong passenger demand across regions with capacity ramp up and high quality products," said a statement.
"The Group expects to return to our track record of profitability at the close of our full financial year," Sheikh Ahmed added. (Emirates’ EBITDA grew nearly three times to Dh14.7 billion between April to September, compared to Dh5 billion same period last year.)
Close watch on fuel costs
But operating costs too are on the rise, by 73 per cent, against an overall capacity growth of 40 per cent. This came about 'mainly due to the substantial increase in fuel costs which more than tripled compared to the same period last year.' There was a 65 per cent higher fuel uplift in line with increased flight operations and came against the backdrop of a doubling in 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 per cent of operating costs - one of the highest ratios ever, compared to 20 per cent in the first six months of last year," according to a statement.
dnata chips in
The Group's ground handling services division saw revenues double to Dh7.3 billion, enough to turn in a profit of Dh236 million compared to Dh85 million. "Cost inflation across the business dampens performance even as operations ramp up," the Group said in the update.