Emirates sets new profit record

The Emirates Group has announced
another record performance with net profits of Dhs 2.8 billion (US $762
million) for the financial year ended 31st March 2006 - up five per cent
from the previous year’s record profits of Dhs 2.7 billion ($726
million).Group revenue increased by an impressive Dhs 5.2 billion ($1.4 billion)
or 27 per cent, to Dhs 4.3 billion ($6.6 billion) compared to Dhs 19.1
billion ($5.2 billion) last year. The Group’s cash balance was a robust
Dhs 11 billion ($3 billion) at the end of March, an improvement of 28.6
per cent against a year earlier. 

For 2005-06 Emirates will pay an increased dividend of Dhs 386 million
($105 million) to its owner, the Government of Dubai, compared to Dhs
368 million ($100 million) last year. In total, the ownership will have
received Dhs 1.4 billion ($396 million) from Emirates since the
financial year 2000-01. 


The 2005-06 Annual Report of the Emirates Group - comprising Emirates
Airline, Dnata and subsidiary companies - was released in Dubai today at
a news conference hosted by His Highness Sheikh Ahmed bin Saeed
Al-Maktoum, Chairman and Chief Executive, Emirates Airline and Group.



The Group’s sharp sales growth and record returns reflect customers’
increasing preference for its products, as illustrated by the two
million more passengers who flew Emirates in the latest financial year,
for a new record total of 14.5 million.


Sheikh Ahmed said: “These results clearly show that Emirates’
customer-oriented approach and investments in providing a quality
product - the best aircraft that money can buy, top-flight service and
travel experience at a competitive price - has paid off in terms of
retaining and winning new customers globally.”


He continued: “It has been another tough year with pressure from fuel
costs continuously dampening our robust net income production. Emirates
has returned its 18th consecutive annual profit, and we are pleased to
have achieved this solid performance while expanding our operations in
an increasingly competitive environment.”


Across the Group, initiatives to improve efficiency and keep a tight
rein on costs have also contributed to the positive results, as the
Group maintained a strong net profit margin of 11.8 per cent.


Fuel costs remained the top expenditure accounting for 27.2 per cent of
total operating costs, up from 21.4 per cent the previous year.  Like
other airlines, Emirates was forced to increase fuel surcharges on
tickets, which only covered 41 per cent of incremental costs.


The airline’s jet fuel risk management programme helped mitigate fuel
costs, saving the company $189 million in 2005-06, 50 per cent more than
last year. The outlook however, remains sombre in a volatile global
market where oil prices have hit new highs.


In his opening review in the 2005-06 Annual Report, Sheikh Ahmed
debunked accusations that Emirates receives hidden government support
and subsidies, reiterating that the company’s success is based on a
sound and simple business model, which focusses on growth and investing
in innovations to keep ahead of the competition.


He also remarked on the catalystic relationship between the
transformation of Dubai into a world-class centre for business, tourism
and transport, and the explosive growth of Emirates and Dnata to become
world-beating companies.


“Profitability through growth seems to have become a theme of Emirates
for the past decade,” he said.  “I must stress that we have never set
out to be a threat to any other airline. We have simply concentrated on
trying to provide a superb service for our passengers and cargo


Sheikh Ahmed concluded: “We are gratified by the strong financial
results of the Group and intend to re-invest the retained profits into
acquiring advanced equipment and facilities, hiring and training the
best people for our business, and putting in place superior support
services - thus keeping the airline, Dnata and group subsidiary
companies competitive, while providing our customers with the high
quality services they have come to expect from us.”