Emirates ­reverses profit drop with ­savings

Emirates unveiled a special tribute to the late Sheikh Zayed bin Sultan Al Nahyan, founding father of the United Arab Emirates, with bespoke livery for its 100th Airbus A380. (Courtesy Emirates)
Updated 09 November 2017

Emirates ­reverses profit drop with ­savings

LONDON: Emirates airline reversed a sharp decline in its financial performance in 2016, unveiling an 111 percent profits jump in the first half of 2017 to $452 million, off the back of a softer dollar and a cost-cutting drive that saw the parent company axe 3,000 jobs.
But there were still severe headwinds, indicated Emirates chairman Sheikh Ahmed bin Saeed Al-Maktoum — margins continued to face strong downward pressure from increased competition and rising oil prices, as well as “weak economic and uncertain political realities in many parts of the world.”
In its 2016/17 financial year, Emirates — the biggest airline in the Middle East — reported its first full-year profit decline for five years as subdued travel demand saw earnings plunge 82 percent. An inflated US currency, political and security issues, as well as airline overcapacity, were cited as factors behind the grim trading picture last year.
But in the first six months of 2017/18 to end-September, Emirates reported that its average passenger seat factor — a key metric for airlines which measures how many seats are filled on flights — rose to 77.2 percent, compared with last year’s 75.3 percent. The airline carried 29.2 million passengers between April 1 and Sept. 30, 2017, up 4 percent from the same period last year.
The airline said: “The easing of the strong US dollar against other major currencies helped our profitability. We are also seeing the benefit from various initiatives across the company to enhance our capability and efficiency with new technologies and new ways of working.”
In the past six months, employee numbers at Emirates Group — which includes its air freight and ground handling operations — reduced by 3 percent compared to March 31 2017, from an overall staff count of 105,746 to 102,669.
Airline employee numbers were cut from 64,768 to 63,039.
“This was largely a result of natural attrition together with a slower pace of recruitment, as various parts of the business adopted new technologies, streamlined business processes and re-allocated resources,” said Emirates.
Airline revenue of $12.1 billion was up 6 percent compared with $11.4 billion reported during the same period last year.
Emirates said it continued to invest in the most advanced wide-body aircraft to improve overall efficiency and provide better customer experience. During the first half, Emirates received 10 wide-body aircraft — four Airbus A380s, and six Boeing 777s, with nine more new aircraft scheduled to be delivered before the end of the financial year. It also retired five older aircraft from its fleet with further four to be returned by March 31, 2018.
Emirates launched two new passenger services to Zagreb (Croatia) and Phnom Penh (Cambodia).
As of Sept. 30, Emirates’ global network spanned 156 destinations in 84 countries. Its fleet stood at 264 aircraft including freighters.
In July, the airline announced a partnership with Flydubai, leveraging both airlines’ complementary networks to open new city-pair routings for customers, and optimize operations at Dubai International Airport. Emirates also announced it would extend its successful partnership with Qantas for a further five years that will offer travelers more flight choices to and from Australia and New Zealand.
Overall profit for dnata, Emirates’ airport handling and airlines services division, was up by 20 percent to $80 million. Across its operations, the number of aircraft handled by dnata increased by 11 percent to 330,317, and it handled 1.5 million tons of cargo, up 25 percent.
This reflected new customer contracts won across the network, and expansion to new locations such as Rio de Janeiro and Amsterdam (ground handling) as well as the overall upturn in global cargo volumes.


Saudi Aramco shares soar at maximum 10% on market debut

Updated 11 December 2019

Saudi Aramco shares soar at maximum 10% on market debut

  • Company is now world’s largest publicly traded company, bigger than Apple

RIYADH: Saudi Aramco shares opened at 35.2 riyals ($9.39) on Wednesday at the Kingdom’s stock exchange, 10 percent above their IPO price of 32 riyals, in their first day of trading following a record $26.5 billion initial public offering.
Aramco has earlier priced its IPO at 32 riyals ($8.53) per share, the high end of the target range, surpassing the $25 billion raised by Chinese retail giant Alibaba in its 2014 Wall Street debut.
Aramco’s earlier indicative debut price was seen at 35.2 riyals, 10 per cent above IPO price, raising the company’s valuation to $1.88 trillion, Refintiv data showed.
At that price, Aramco is world’s most valuable listed company. That’s more than the top five oil companies – Exxon Mobil, Total, Royal Dutch Shell, Chevron and BP – combined.
“Today Aramco will become the largest listed company in the world and (Tadawul) among the top ten global financial markets,” Sarah Al-Suhaimi, chairwoman of the Saudi Arabian stock exchange, said during a ceremony marking the oil giant’s first day of trading.
“Aramco today is the largest integrated oil and gas company in the world. Before Saudi Arabia was the only shareholder of the company, now there are 5 million shareholders including citizens, residents and investors,” said Yasir Al-Rumayyan, the managing director and chief executive of the Saudi Public Investment Fund.
“Aramco’s IPO will enhance the company’s governance and strengthen its standards.”
Amin Nasser, the president and CEO of Saudi Aramco, meanwhile thanked the new shareholders for their confidence and trust of the oil company.
The sale of 1.5 percent of the firm, or three billion shares, is the bedrock of Crown Prince Mohammed bin Salman’s ambitious strategy to overhaul the oil-reliant economy.
Riyadh’s Tadawul stock exchange earlier said it will hold an opening auction for Aramco shares for an hour from 9:30 a.m. followed by continuous trading, with price changes limited to plus or minus 10 percent.

The company said Friday it could exercise a “greenshoe” option, selling additional shares to bring the total raised up to $29.4 billion.
The market launch puts the oil behemoth’s value at $1.7 trillion, far ahead of other firms in the trillion-dollar club, including Apple and Microsoft.
Two-thirds of the shares were offered to institutional investors. Saudi government bodies accounted for 13.2 percent of the institutional tranche, investing around $2.3 billion, according to lead IPO manager Samba Capital.
The IPO is a crucial part of Prince Mohammed’s plan to wean the economy away from oil by pumping funds into megaprojects and non-energy industries such as tourism and entertainment.
Watch the video marking Aramco’s opening trading: