Emirates Announces Record Half-Year Result

Media release 17 November 2004

Emirates Announces Record Half-Year Result Of US$236 Million

Second half impacted by high fuel prices

Emirates has disclosed net profits of US$236 million (Dhs865 million) for the first six months of the financial year 2004-05, from April 1 to September 30.

The results, based on unaudited financial figures, are Emirates’ best ever for any six-month period and compare with net profits of US$167m (Dhs612m) during the same period of last year – a 41 per cent increase. Strong passenger and cargo demand coupled with better yields helped to offset higher costs due to escalating jet fuel prices.

Emirates’ Chairman, HH Sheikh Ahmed bin Saeed Al-Maktoum, said: "These excellent results owe a great deal to a superb performance in the first quarter, while in the second quarter we started being severely impacted by the dramatic increase in jet fuel prices.

“This is still affecting our performance and has forced us to adopt some stringent cost-containment measures, like a hiring freeze on non-operational staff. We are looking constantly for other cost savings everywhere.”

He added: “Those measures have helped, but by themselves alone they have not been enough to offset the huge increase in our fuel bills. That’s why we also had to implement the ticket surcharges recommended by the Dubai Board of Airline Representatives (BAR.)”

Sheikh Ahmed concluded: “Emirates’ strong profitability is a very high priority, to enable us to afford the big investments required to protect our competitiveness and indeed our future, regardless of the high fuel prices expected to continue in the medium term.”

Emirates’ operating revenue of US$2.2 billion (Dhs8.2 billion) for the half-year represented a strong growth of 42 per cent vs. revenue of US$1.6 billion (Dhs5.8 billion) during the same period last year.

Seat factor improved by 3.5 percentage points to 73.3 per cent during the period, and passengers carried rose 25.5 per cent to 6.1 million, compared to 4.8 million for the first half-year of 2003-04. Seat capacity also went up by 30 per cent vs. the same period last year.

Emirates SkyCargo’s revenue posted a growth of 42 per cent, with cargo tonnage rising by 27 per cent to 401,500 tonnes, compared with 315,553 tonnes for the same period last year. Emirates now flies six all-cargo Boeing 747 freighters and its cargo-only destinations served by freighters include: Budapest, Liège, Gothenburg, Amsterdam, Bangalore, Dalian and Taipei.

Liquidity on September 30, 2004 remained robust at US$1.70 billion (Dhs6.24 billion) compared to US$1.76 billion (Dhs6.44 billion) six months earlier. This was after paying dividends of US$82 million (Dhs300 million) to the ownership during this period - pertaining to the past financial year - and funding capital outflows of around US$136 million (Dhs500 million) that included aircraft pre-delivery payments and other capital items.

Emirates is one of the fastest growing and most profitable airlines in the world, operating to 77 destinations in 54 countries from its Dubai base. Emirates’ new services introduced in 2004 include: Lagos, Accra, Budapest (cargo-only), Glasgow, Vienna and Christchurch, as well as passenger and belly-hold cargo services to Shanghai and New York.

Emirates also recently announced that it will start passenger and belly-hold cargo services to another four destinations in 2005, namely Seychelles, Seoul, Hamburg (the airline’s fourth gateway to Germany) and Geneva (the airline's second gateway to Switzerland.) The new routes will expand the Emirates network to 81 destinations by the end of next year.

The Emirates fleet presently comprises 71 Boeing and Airbus jets, including 29 Airbus A330-200s, 12 Boeing 777-300s, nine Boeing 777-200s, six Airbus 340-500s, eight A340-300s, one Airbus A310 and six Boeing 747 freighters.

Its order book of 99 aircraft includes 45 Airbus A380-800s, 30 Boeing 777-300ERs (plus nine options), four ultra-long-range Airbus A340-500s and 20 Airbus A340-600 Higher Gross Weight aircraft, worth a combined USD$30.3 billion at list prices. By 2012 Emirates expects to have twice as many jets in its fleet as it does today.

ENDS

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