Dubai: Emirates SkyCargo, the cargo operations of Emirate continued to deliver a solid performance in a highly competitive market, contributing to 13 per cent of the airline’s total transport revenue.
Emirates Group posted a profit of Dh1.7 billion for the financial year ended March 31, 2020, down 28 per cent from last year.
With the lingering weakness in air freight demand over most of the year, Emirates’ cargo division reported a revenue of Dh11.2 billion (US$ 3.1 billion), a decrease of 14 per cent over last year, the airline said in a statement.
Freight yield per Freight Tonne Kilometre (FTKM), after two consecutive years of growth, declined by 2 per cent, largely impacted by the reduction in fuel price, and a strong US dollar.
Tonnage carried decreased by 10 per cent to reach 2.4 million tonnes, due to the capacity reduction with the retirement of one Boeing 777 freighter and reduced available bellyhold capacity in the first and last quarters of the year. At the end of 2019-20, Emirates’ SkyCargo’s total freighter fleet stood at 11 Boeing 777Fs.
Emirates’ hotels portfolio recorded revenue of Dh584 million, a decline of 13 per cent over last year with competition further on the rise in the UAE market impacting average room rates and occupancy levels.
For 2019-20, dnata recorded a sharp profit decline of 57 per cent to Dh618 million. This includes a one-time gain from a transaction where dnata divested its minority stake in Accelya, an IT company that was acquired by Vista Equity Partners. Without this one-time transaction, dnata’s profit would have been down 72 per cent compared to the same period last year, which included a one-time gain from the sale of dnata’s stake in travel company HRG. Comparing profit performance without both disinvestment gains from Accelya and HRG, dnata’s profit for 2019-20 would have been lower by 64 per cent compared to previous year.
dnata’s total revenue grew to Dh14.8 billion, up 2 per cent. This reflects its continued business growth particularly in its Catering division, and strong customer retention and new contract wins across its four divisions. dnata’s international business now accounts for 72 per cent of its revenue.
dnata invested more than Dh800 million in acquisitions, new facilities and equipment, leading-edge technologies and people development during the year.
In 2019-20, dnata’s operating costs increased by 8 per cent to Dh14.3 billion, in line with organic growth across its business divisions, coupled with integrating the newly acquired companies mainly across its catering division and international airport operations. dnata’s cash balance wasDh5.3 billion, an increase of 4 per cent. The business delivered an Dh1.4 billion cash flow from operating activities in 2019-20.
Revenue from dnata’s UAE Airport operations, including ground and cargo handling remained steady at Dh3.2 billion. The number of aircraft movements handled by dnata in the UAE declined by 11 per cent 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 (DXB and DWC) due to COVID-19 pandemic containment measures in March. dnata’s cargo handling declined by 4 per cent to 698,000 tonnes, impacted by lower demand in the overall air cargo market during the year, and the 45-day DXB runway closure in Q1.
dnata’s International Airport Operations division revenue declined slightly by 1 per cent to Dh3.9 billion.
Catering business accounted for Dh3.3 billion of dnata’s revenue, significantly up by 26%. The inflight catering business uplifted more than 93 million meals to airline customers, a substantial increase of 32% mainly due to the full year impact of Qantas’ catering business in Australia which dnata had acquired in the previous year.
Revenue from dnata’s Travel Services division has declined by 4 per cent to Dh3.5 billion. The underlying total transaction value (TTV) of travel services sold declined by 6 per cent to Dh10.8 billion.
dnata’s Travel division saw weak travel demand having a negative impact on its business performance, particularly in its B2C units in the UK and Europe. This led the management team to initiate a strategic business review of its entire Travel portfolio, part of which resulted in an impairment charge of AED 132 million against goodwill in our UK travel B2C brands. The review will be completed in the first quarter of 2020-21.
In the UAE and GCC region, dnata’s Travel business remained steady. During the year, dnata expanded its UAE retail network with the opening of new service outlets, and launched REHLATY, a new travel brand designed by Emiratis for the Emirati traveller.