Etihad Airways posts 200% rise in 2012 net profit

Updated 05 February 2013
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Etihad Airways posts 200% rise in 2012 net profit

ABU DHABI: Etihad Airways, the fast-growing carrier of Abu Dhabi, posted a 200 percent rise in net profit in 2012 and a 17 percent increase in revenues, the airline said in a statement on Monday.
Etihad posted a net income of $42 million last year compared to $14 million in 2011 when it made its first-ever profit, said the statement, which attributed the rise to strong improvements in revenues, passengers and cost control.
The Gulf carrier also said it was not considering canceling any of its orders for 41 Boeing 787 Dreamliners, despite a worldwide grounding of the aircraft after a number of incidents.
The government-owned airline said it was discussing buying a stake in India’s loss-making Jet Airways.
The flag carrier of the UAE capital said revenues increased to $4.8 billion in 2012 compared to $4.1 billion the previous year.
The number of passengers grew a healthy 23 percent to 10.3 million compared to 8.4 million in 2011, significantly boosted by Etihad’s partnerships which delivered more than $600 million in total revenue.
“This has been a game-changing year for Etihad Airways,” James Hogan, the airline’s president and chief executive officer said in the statement.
“We have delivered improved net profit, the second consecutive year we have been in the black, a remarkable achievement given the youth, ambitious growth and ongoing investment made by this airline in a challenging global economic environment.”
Etihad said it succeeded in building the first “equity alliance” with investments of 40 percent in Air Seychelles, 29.2 percent in airberlin, 9 percent in Virgin Australia and about 3 percent in Aer Lingus.
“We have taken great strides in building the industry’s first equity alliance ... which (is) contributing significant value to our business,” Hogan said.
Earnings before interest and tax (EBIT) rose 24 percent to $170 million, while EBITDAR (earnings before interest, tax, depreciation, amortization and rentals) rose to $753 million, up 16 percent, Etihad said.
Hogan said more than 50 institutions have provided around $6.8 billion in cumulative funding for the airline’s ongoing expansion.
Planned fleet additions for 2013 include 14 aircraft — 11 passenger aircraft and three freighters.
Hogan told reporters that Etihad was not planning to cancel any of its Dreamliner orders.
The Dreamliner faces a global no-fly order imposed by US regulators over incidents including a fire on a Japan Airlines plane in Boston and an emergency landing on an ANA flight in Japan.
“We have strong relationship with Boeing.
“The 787 is a great aircraft, and it is not unusual for a new aircraft to have technical issues. We have no doubts that these issues will be resolved,” Hogan said.
Hogan also said Etihad was discussing a stake purchase of India’s private carrier Jet Airways, a day after a similar announcement by Jet.
“We are undertaking due diligence. We met (different ministers) to understand the new rule of investment” in India, Hogan said.
At the end of 2012, Etihad had 10,656 employees, 18 percent more than in 2011, representing more than 125 nationalities.
Etihad Airways, which began operations in 2003, serves 86 passenger and cargo destinations in the Middle East, Africa, Europe, Asia, Australia and the Americas.
It operates a fleet of 70 Airbus and Boeing aircraft, and more than 90 aircraft on firm order, including 10 Airbus A380s, the world’s largest passenger aircraft.


Saudi insurance stocks soar as female drivers take to the road

Saudi Majdoleen Mohammed Alateeq, a newly licensed Saudi driver, gets out of her car in Riyadh on Sunday. The insurance sector is just one segment of the economy set to benefit from the lifting of restrictions on women drivers in the Kingdom. AFP
Updated 25 June 2018
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Saudi insurance stocks soar as female drivers take to the road

LONDON: Saudi insurance stocks surged on Sunday, with investors expecting the sector to reap significant dividends following the lifting of the ban on female drivers.
Insurance stocks — one of the worst performing sectors on the Saudi bourse for the year to date — outperformed other classifications on Sunday, ending 2.4 percent higher, compared with a 1.8 percent rise for the Kingdom’s headline index.
Amana Insurance and AlRajhi Takaful were the best performers of the day, gaining 9.9 percent each. Tawuniya, the Kingdom’s largest insurer, ended Sunday 1.1 percent higher, with only one of the country’s 33 listed insurance providers closing lower for the day.
The lifting of restrictions on female drivers — which came into effect on Sunday after first being announced in September — is part of a series of wide-ranging reforms introduced as part of Saudi Arabia’s Vision 2030 economic transformation program, designed to diversify the economy away from a reliance on oil revenues.
The advent of women drivers is forecast to benefit the economy by significantly increase female participation in the workforce, and stimulating financial, insurance and retail sectors among others.
The insurance sector is set to draw particular benefit from the move, but may remain under pressure, according to rating agency S&P.
“We anticipate that efforts of the local authorities to tackle the large number of uninsured drivers, combined with the arrival of women drivers … and the introduction of additional benefits under the unified medical policy from July 1, will support further premium growth in the industry in the medium term,” said S&P in a research note in April.
“However, these factors may be offset by the large number of foreign workers that have already left or will be leaving the Kingdom in 2018.”
In spite of yesterday’s price surge, insurance stocks are 8.4 percent lower for the year to date. Tadawul as a whole is up 15.6 percent so far this year, making the bourse one of the world’s best performers for 2018.
Investor sentiment on Sunday was also boosted by investor optimism after index provider MSCI announced last week that it would upgrade Saudi stocks to its Emerging Markets Index from next year.
The widely anticipated upgrade — which puts Saudi equities on an index tracked by around $2 trillion worth of global assets — is expected to attract up to $40 billion of international funds, Tadawul CEO Khalid Al-Hussan told Arab News last week.
MSCI’s upgrade came after a similar move by fellow index provider FTSE Russell in February, which is also scheduled to come into effect from next year.
Banks were among the other bright performers on Tadawul on Sunday. Arab National Bank led gains, closing up 4.2 percent, while blue-chip names NCB and AlRajhi rose 1.6 percent and 2.3 percent respectively.
Some petrochemical companies also added value, Reuters reported, following a rise in oil prices after OPEC decided on only modest increases in crude production last week.
Outside Saudi Arabia, Gulf markets posted minor gains. In Dubai, where the index was flat, Air Arabia was unchanged. Shares in the airline have declined by more than 10 percent since early last week, when the company said it had hired experts to protect its business interests in private equity firm Abraaj, which has filed for provisional liquidation. The airline said its exposure was around $336 million.
Last week, the UAE’s securities regulator asked listed companies to declare their exposure to Abraaj.