Emirates airline reports rise in annual profit, coronavirus hits final quarter

DUBAI (Reuters) – Emirates, one of the world’s biggest long-haul airlines, reported a 21{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} rise in full-year profit on Sunday, but warned the outbreak of the new coronavirus hit its performance in the fourth quarter of the financial year.

The Dubai state carrier made 1.1 billion dirhams ($287.5 million) in the 12 months to March 31, compared to 871 million dirhams a year earlier.

Revenue contracted 6.1{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} to 92 billion dirham as the number of passengers carried fell 4.2{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} to 56.2 million.

Emirates blamed the drop in revenue on runway works at Dubai International airport last year, forcing the airline to reduce capacity for 45 days, and the coronavirus pandemic which has crushed travel demand.

The airline suspended regular, scheduled passengers flights in late March, though it has since operated some services for foreigners leaving the United Arab Emirates, while cargo flights continue to operate.

Emirates sister airport services company dnata saw profit drop by 57{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} to 618 million dirhams, which the company attributed to increased investment in its catering and airport services divisions and weak demand for the travel business.

Dnata’s profit would have been 72{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} lower had it not been for a one-time divestment, and the unit has started a review of its travel business which booked a 132 million dirham impairment.

Profit at Emirates Group, which counts Emirates airline and dnata among its assets, fell 28{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} to 1.7 billion dirham. Revenue was down 4.8{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} to 104 billion.

Unfavourable currency exchange rates cost the Group 1 billion in profit, it said, while it also saw some respite from cheaper oil prices.