The Emirates Group has today announced it 25th consecutive year of profit and company-wide growth ending the year in a strong position despite continuing high fuel prices and a weak global economic environment. The financial year also ended with some very positive newly reached capacity milestones throughout the business.
Released today in the Group’s 2012-13 Annual Report, the company posted an AED 3.1 billion (US$ 845 million) net profit, up 34% from last year. Even with external challenges, the Group’s revenue reached AED 77.5 billion (US$ 21.1 billion) an increase of 17% over last year’s results. The Group’s cash balance grew by 53% reaching a solid AED 27.0 billion (US$ 7.3 billion).
“Achieving our 25th consecutive year of profit in a financial year with our largest ever increase in capacity across the network is an achievement that speaks to the strength of our brands and our leadership,” said His Highness (H.H) Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group.
“Throughout the 2012-13 financial year the Group has collectively invested over AED 13.8 billion (US$ 3.8 billion) in new aircraft, products, services and handling facilities as well as the newly opened JW Marriott Marquis Hotel in Dubai. This investment has resulted in an increased customer base and a rise in global brand awareness. Every dirham that we earn is strategically placed back into our business and it is this tenacious approach that has allowed the Group to maintain such strong and consistent profitability under challenging circumstances.”
Despite a difficult operating environment, the Group continued to invest in and expand on its employee base, increasing its overall staff count by 12 per cent to 68,000.
Emirates continued with its growth plan and during the financial year saw the largest increase in capacity in the airline's history receiving a 34 new aircraft, the highest in any single year. These aircraft were funded by raising more than US$7.8 billion, also a first, through a variety of financing structures. Overall capacity measured in Available Tonne Kilometres (ATKMs) increased by 5.5 billion tonne-kilometres. Other significant capacity increases include launching 10 new destinations across six continents, shipping more than 2 million tonnes of cargo for the first time and carrying an additional 5.4 million passengers over last year, the highest increase in a financial year.
In the 2012-13 financial year Emirates’ fuel bill increased by 15% over last year to reach AED 27.9 billion (US$ 7.6 billion). With total operating costs increasing by 16% compared to a revenue increase of 17% over last year.
“Managing volatile exchange rates, coupled with a persistently high fuel bill accounting for 40 per cent of our total expenditures, has required continued strong resolve," added Sheikh Ahmed. “Even with these lingering challenges we continue to grow and remain profitable despite the industry norms because we continue to rely on our proven business model and understanding of the marketplace.”
“Staying the course, our strategy for growth has reaped high benefits this past financial year, which has been our strongest ever in relationship to capacity growth," said Sheikh Ahmed. "Emirates seat load factor over the last three years has been 80 per cent despite our increase in capacity by 44 per cent during the same period, showing the continued global demand for our product. In addition our capacity measured in terms of Available Tonne Kilometres (ATKMs), which includes passenger and cargo capacity, crossed the 40 billion tonne-kilometres mark, another first for Emirates.”
Highlighting its sound financials and investor confidence, Emirates raised more than AED 28.6 billion (US$ 7.8 billion) in new funding mainly to secure its on-going fleet expansion, a record amount for the airline. This impressive total included US$ 587.5 million financing for additional A380’s with a bond that used the debt capital market in the US, a first for a non-US airline in years. Emirates also issued a 10-year amortised Sukuk for US$ 1 billion and raised US$ 750 million with a 12-year amortised bond matched to the payment cycle for the aircraft. It further includes more than AED 20 billion (US$5.4 billion) raised through finance and operating leases.
Emirates revenue reached a record high of AED 73.1 billion (US$ 19.9 billion) growing by 17% when compared to the 2011-12 financial year. Although the average price of jet fuel did not increase over last year, it remains high and has impacted Emirates’ bottom line with the airline’s profit at AED 2.3 billion (US$ 622 million) representing an increase of 52% over last year’s results.
Carrying a record 39.4 million passengers, an increase of 16%, Emirates logged a robust Passenger Seat Factor, at 80%, remaining consistent with last year’s results. Passenger yield remained steady with 30.5 fils (8.3 US cents) per Revenue Passenger Kilometre (RPKM).
Revenue generated from across Emirates’ six regions continues to be well balanced, with no region contributing more than 30 per cent of overall revenues. East Asia and Australasia remained the highest revenue contributing region with AED 20.9 billion (US$ 5.7 billion) up 15 per cent from 2011-12. Europe, up 18 per cent to AED 20.1billion (US$ 5.5 billion) and the Americas up 24 per cent to AED 8.3 billion (US$ 2.3 billion) saw the most significant growth, reflecting new destinations as well as increased frequency and capacity to these regions.
Across the rest of the globe Emirates saw strong revenue increases from West Asia and the Indian Ocean up 13 per cent to AED 8.0 billion (US$ 2.2 billion), Gulf/Middle East up 13 per cent to AED 7.1 billion (US$ 1.9 billion) and Africa with AED 6.7 billion (US$1.8 billion) in revenue, up 10 per cent.
Emirates premium seat factor remained strong despite the global financial uncertainty. Premium and overall seat factor for the airline’s flagship A380 aircraft outperformed the network, highlighting the continued demand for the product from passengers.
Emirates has a further 198 aircraft on order worth over US$ 71 billion. This year, Emirates received 34 new wide-body aircraft including 20 Boeing 777-300ERs, 10 Airbus A380s and 4 Boeing 777LRFs compared with last year’s 22 aircraft. With an increased fleet, Emirates launched 10 new destinations in 2012-13 including Ho Chi Minh City, Barcelona, Lisbon, Erbil, Washington, DC, Adelaide, Lyon, Phuket, Warsaw and Algiers.
Looking forward to 2013-14, Emirates has to date announced four new routes; Haneda, Clark in the Philippines, Stockholm and Milan to New York.
New A380 destinations for the airline in 2012-13 included; Amsterdam, Melbourne, Singapore and Moscow. Bringing the total number of A380 destinations to 21. In addition, a second A380 was deployed on the existing Paris and New York routes, making both now a double daily A380 service. Two of our aircraft to London Heathrow were also upgraded to A380s, making all five daily flights now A380s.