UAE’s dnata eyes global expansion with “good acquisition pipeline”

Dubai: Emirates Group’s airport and travel services company, dnata, has a robust acquisition pipeline across several businesses and geographies to fuel growth plans and expand its presence worldwide, according to CEO Steve Allen.

Allen shed light on dnata's active pursuit of acquisition targets, particularly within the catering, ground handling, and cargo verticals, alongside its crucial role in shaping Dubai World Central's (DWC) future.

“We have a good pipeline,” Allen confirmed to Gulf News on Monday, indicating the company’s acquisition appetite. “Nothing I've announced yet, but we're working on a number of acquisitions.” He said the company's acquisition strategy is two-pronged, focusing on geographical expansion and enhancing its product capabilities in high-growth areas like cargo and premium services.

Specifically addressing acquisition targets, Allen stated, "We're looking at, particularly on the catering and the ground handling and cargo side."

Allen said the company is currently in the due diligence phase for several of the acquisitions. "We are going through the due diligence process on a number of them," he explained.

He explained that the ongoing consolidation within cargo and premium presents opportunities for dnata to strengthen its global footprint and offer "consistent, high-quality services worldwide." This consolidation drive aims to create larger global players, allowing for more comprehensive service offerings and international deals for customers.

While dnata already manages a comprehensive supply chain in catering, Allen said there exists a potential for further consolidation in this sector. Similarly, in ground handling, the focus is on both consolidating existing players and acquiring facilities to enhance overall capability.

Allen’s comments follow a few days after Emirates Group announced its full-year results, where dnata delivered solid growth and performance across its business units, reporting a profit of Dh1.6 billion before tax, up 2 per cent from last year.

The company also recorded revenues of Dh21.1 billion, up 10 per cent from last year and strong cash assets of Dha3.7 billion.

“dnata is on a steady growth path with facility investments coming to fruition in key markets, including the opening of new facilities in Amsterdam, Dubai and Erbil next year, which will significantly expand our cargo handling capacity and capabilities,” Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates airline and Group said last week.

Looking ahead, Allen expressed optimism for continued growth, anticipating "low double-digit percentage" increases. To support this expansion, Allen said dnata is actively recruiting and focusing on internal development alongside new hires. The company's global workforce currently stands at 51,000, which is expected to grow in line with business expansion. While acknowledging potential headwinds such as ongoing trade tariff negotiations and a slight downturn in the domestic US market, Allen remains confident in dnata's ability to navigate challenges due to its strong balance sheet and globally diverse capabilities.

He explained, “We have had a solid April. I think we're all interested in the current uncertainty around the negotiations on the trade tariffs, and we will keep a close eye on that and how that impacts businesses worldwide. But at the moment, we don't see any major impact from the tariff situation.”

Commenting on dnata’s US businesses, which is a big ground handling and catering market, Allen explained, “We are keeping a close eye on it. That is the one area we're maybe a little concerned about. But the flip side is that, because we're a big global company with operations in most of the world's major markets, that will be offset with, hopefully, upturns in other parts of our business.”

Allen said the company is eyeing growth in Asia Pacific, Australasia, South America, and Europe to offset regional fluctuations.