Emirates Posts New Record Profits

The Emirates Group today reported its 20th consecutive year of net profit, notching a new profit record despite soaring oil prices and challenging business conditions in the second half of its 2007-08 fiscal year.


DUBAI, UAE, April 30th, 2008 - The Emirates Group today reported its 20th consecutive year of net profit, notching a new profit record despite soaring oil prices and challenging business conditions in the second half of its 2007-08 fiscal year.

Group net profits increased 54.1 percent to US$ 1.45 billion for the financial year ending March 31st, 2008, on revenues of US$ 11.2 billion compared to the previous year’s $ 8.5 billion. The Group net margin improved to 13.2 percent from 11.4 percent in the previous year.

The Group also retained a robust cash balance of US$ 3.8 billion, compared with US$ 3.5 billion the previous year. Emirates will pay a dividend of US$ 272.5 million to its owner, the Government of Dubai. In 2007-08, the Group estimates a direct contribution of US$ 6 billion, and another US$ 6.8 billion in indirect contribution to the UAE economy.

The 2007-08 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 latest record performance reflects its success in growing customer demand through the strategic expansion of its business operations across six continents, supported by ongoing investments in the latest technology, products and customer service while keeping a tight rein on costs. This is illustrated by the 21.2 million passengers who flew with Emirates in the latest financial year, which is 3.7 million more than in the previous year. In addition, Dnata’s international ground handling operations expanded to 17 airports in seven countries.

Sheikh Ahmed said: “It was another record year for the Group in spite of a challenging business climate, particularly in the second six months where the soaring cost of jet fuel made a big dent, although the impact was partly offset by other operating gains.

“Despite the long-term forecast of a decrease in the number of passengers traveling in First and Business class, I am happy to report that Emirates once again bucked the trend and boosted our seat factor in the forward cabins. Emirates is fortunate to be located in Dubai at the center of the new Silk Road between East and West. I believe the threat of an economic downturn will be offset for Emirates by the boom in the Middle East, especially the thriving travel industry of tourism and commerce.”

Fuel costs remained the top expenditure for the 4th year running, accounting for 30.6 percent of total operating costs compared with 29.1 percent the previous year and 27.2 percent the year before.

The airline’s fuel risk management program continued to reap rewards, saving the company US$ 242 million in 2007-08, as WTI crude oil prices hovered around the US$ 90 per barrel mark in the second half of the fiscal year, 50 percent more than US$ 60 per barrel in the same period the year before. In total, the fuel risk management has saved in excess of US$ 1 billion since the financial year 2000-01.

In his opening review in the 2007-08 Annual Report, Sheikh Ahmed highlighted some major milestones for the Group which included the move of most of the company’s Dubai-based staff to the new Emirates Group Headquarters; the launch of 11 new passenger and freighter destinations across the globe including Emirates’ first South American destination; and the massive 2007 Dubai Air Show aircraft order which has been described as the largest in civil aviation history worth US$ 34.9 billion at list prices.

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