Emirates Airline profits nearly triple in half-year

The latest result is a change of fortune for the Dubai carrier. (Reuters)
Updated 08 November 2019

Emirates Airline profits nearly triple in half-year

  • The airline attributed the soaring profits to a sharp drop in the cost of fuel which accounts for almost a third of company spending

DUBAI: Emirates Airline, the largest carrier in the Middle East, has reported a 282-percent rise in half-year net profits, mainly thanks to a drop in operating costs and fuel prices.

The result was a change of fortunes for the Dubai carrier, which for the full-year to the end of March took a heavy hit from high oil prices and currency fluctuations.

The carrier said it posted a net profit of $235 million in the first six months of the current financial year compared to just $62 million in the same period last year.

The airline attributed the soaring profits to a sharp drop in the cost of fuel which accounts for almost a third of company spending.

An 8 percent drop in operating costs and a rise in the number of passengers per flight also contributed to the healthy results.

“The lower fuel cost was a welcome respite as we saw our fuel bill drop by AED 2 billion ($545 million) compared to the same period last year,” Sheikh Ahmed bin Saeed Al-Maktoum, chairman and CEO of Emirates Airline and Group, said in a statement.

“However, unfavorable currency movements wiped off approximately AED 1.2 billion ($327 million) from our profits,” Sheikh Ahmed said.

On average, fuel costs were 13 percent lower compared to the same period last year, the airline said.  In the last full year, Emirates’ net profit dived 69 percent to just $237 million due to high oil prices and currency fluctuations.

“The global outlook is difficult to predict, but we expect the airline and travel industry to continue facing headwinds over the next six months,” Sheikh Ahmed said.

The airline said its revenue in the April to September period dropped 3 percent to $12.9 billion compared to $13.3 billion in the same period last year. Emirates carried 29.6 million passengers in the six-month period.


Russia vows cooperation with OPEC to keep oil market balanced

Updated 21 November 2019

Russia vows cooperation with OPEC to keep oil market balanced

  • Moscow not aiming to be world’s No.1 crude producer, Putin tells annual investment forum

MOSCOW: President Vladimir Putin said on Wednesday that Russia and the Organization of the Petroleum Exporting Countries (OPEC) have “a common goal” of keeping the oil market balanced and predictable, and Moscow will continue cooperation under the global supply curbs deal.

OPEC meets on Dec. 5 in Vienna, followed by talks with a group of other exporters, including Russia, known as OPEC+.

“Our (common with OPEC) goal is for the market to be balanced, acceptable for producers and consumers and the most important — and I want to underline this — predictable,” Putin told a forum on Wednesday.

In October, Russia cut its oil output to 11.23 million barrels per day (bpd) from 11.25 million bpd in September but it was still higher than a 11.17-11.18 million bpd cap set for Moscow under the existing global deal. Putin told the forum that Russia’s oil production was growing slightly despite the supply curbs deal but Moscow was not aiming to be the world’s No. 1 crude producer. Currently, the US is the world’s top oil producer.

“Russia has a serious impact on the global energy market but the most impact we achieve (is) when working along with other key producers,” he said. “There was a moment not that long ago when Russia was the world’s top oil producer — this is not our goal.”

Russia plans to produce between 556 million and 560 million tons of oil this year (11.17-11.25 million bpd), Energy Minister Alexander Novak said separately on Wednesday, depending on the volume of gas condensate produced during cold months.

Russia will aim to stick to its commitments under the deal in November, Novak told reporters.

Russia includes gas condensate — a side product also known as a “light oil” produced when companies extract natural gas — into its overall oil production statistics, which some other oil producing countries do not do.

As Russia is gradually increasing liquefied natural gas production (LNG), the share of gas condensate it is producing is also growing. Gas condensate now accounts for around 6 percent of Russian oil production.

Novak told reporters that in winter, Russia traditionally produces more gas condensate as it is launching new gas fields in the freezing temperatures.

“We believe that gas condensate should not be taken into account (of overall oil production statistics), as this is an absolutely different area related to gas production and gas supplies,” he said.

Three sources told Reuters on Tuesday that Russia is unlikely to agree to deepen cuts in oil output at a meeting with fellow exporters next month, but could commit to extend existing curbs to support Saudi Arabia.

On Wednesday, Novak declined to say that Russia’s position would be at upcoming OPEC+ meeting. Reuters uses a conversion rate of 7.33 barrels per ton of oil.