Emirates posts Half-Year profits of Dhs 922 million

Dubai-based Emirates has reported net profits of Dhs 922 million (US$251 million) for the first six months of the financial year 2005-06, from 1st April to 30th September.

The unaudited results, up 7% from the Dhs 865 million ($236 million) achieved in the same period last year, reflect a strong revenue performance driven by robust passenger and cargo demand, and better yields, which softened the impact of high fuel prices on operating costs.

Emirates' Chairman, HH Sheikh Ahmed bin Saeed Al-Maktoum, said, "Emirates has delivered an excellent half-year result despite the fact that fuel cost rose 84% compared to the first six months of our last financial year. This robust half-year performance reflects strong revenue growth, and it also demonstrates the company's resilience and adaptability to new challenges in the operating environment."

At Emirates, fuel accounted for 27% of operating cost compared with 19% during the same period last year. Measures taken by Emirates to remain on target include stringent cost-containment and efficiency drives, but like other airlines, Emirates has been forced to impose fuel surcharges on tickets, which do not fully cover the escalating costs. 

Sheikh Ahmed added, "While high fuel prices remain the single largest threat to Emirates' achievement of its financial goals, the airline is confident in the future of the air transport industry.

"Emirates has continued to expand, adding capacity and introducing new services to meet the increasing demand for air travel services from our customers. We are also investing in leading-edge facilities to support our rapidly growing fleet. This includes a new jet engine test facility and an engineering centre that will be one of the world's largest civil aviation maintenance centres when complete."

Sheikh Ahmed concluded, "Emirates' strong profitability enables us to afford the big investments required to enhance our competitiveness and secure our future. We will continue to seek cost-efficiencies, pursue revenue opportunities in high-potential markets, increase productivity and continually innovate to deliver the best possible service to our customers." 

Emirates' operating revenue of Dhs 10.4 billion ($2.84 billion) for the half-year represented a strong growth of 28% vs. revenue of Dhs 8.2 billion ($2.22 billion) during the same period last year. 

Seat factor improved by 2.6 percentage points to 76% during the period, and passengers carried rose 15% to 6.98 million, compared to 6.05 million for the first half-year of 2004-05. Seat capacity (ASKM (available seat kilometre) - Passenger seat capacity measured in seats available multiplied by the distance flown) also increased by 16% vs. the same period last year.

Emirates SkyCargo's revenue posted a healthy growth of 33% to Dhs 2.1 billion, with cargo tonnage rising by 20% to 482,643 tonnes, compared with 404,305 tonnes for the same period last year. Emirates now operates seven all-cargo freighters - six Boeing 747s and one A310-300. 

Emirates' liquidity (including held to maturity investments) on 30th September 2005 was Dhs 9.4 billion ($2.55 billion), an increase of 25% compared to Dhs 7.5 billion ($2.06 billion) six months earlier. This was after paying dividends of Dhs 368 million ($100 million) to the ownership during this period - pertaining to the past financial year - and funding capital outflows of around Dhs 1,221 million ($333 million) that included aircraft pre-delivery payments and other capital items. Emirates successfully raised US$550 million during this period through its debut Sukuk (Islamic bond) issue in June 2005.

Since January 2005, Emirates has introduced new passenger services to the Seychelles, Seoul, and Alexandria; and it also increased the frequency of passenger services to some 20 destinations around its network. The airline currently flies to 77 cities in 54 countries and plans to start services to Abidjan, Hamburg and Beijing in the coming months.

The Emirates fleet presently comprises 83 Boeing and Airbus jets, including 29 Airbus A330-200s, seven Boeing 777-300ERs, 12 Boeing 777-300s, nine Boeing 777-200s, 10 Airbus 340-500s, eight A340-300s, one Airbus A310, and seven freighters - six Boeing 747Fs and one Airbus A310F.

Its order book of 90 aircraft includes 45 Airbus A380-800s, 23 Boeing 777-300ERs (plus nine options), 20 Airbus A340-600 Higher Gross Weight aircraft, and two Airbus A310Fs - worth a combined USD$27.7 billion at list prices. By 2012 Emirates expects to have twice as many jets in its fleet as it does today, and carry over 33 million passengers annually.

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