Emirates reports $5.5bn loss as group headcount falls by 33,000

Emirates reports $5.5bn loss as group headcount falls by 33,000
Dubai’s government has stepped in to assist Emirates financially. (Shutterstock)
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Updated 15 June 2021

Emirates reports $5.5bn loss as group headcount falls by 33,000

Emirates reports $5.5bn loss as group headcount falls by 33,000
  • Emirates Group revenues fell some 66 percent to $9.7 billion over the year

DUBAI: Emirates reported a full-year loss of $5.5 billion, the first time it has fallen into the red in more than 30 years.
The results highlight the devastating impact of the pandemic on the carrier that has helped Dubai become one of the world’s most important international aviation hubs.

Overall employee numbers for the wider Emirates Group, which includes dnata, fell by more than 33,000 over the year as its headcount fell 31 percent to about 75,000. It carried 6.6 million passengers over the year, down 88 percent on a year earlier.

“No one knows when the pandemic will be over, but we know recovery will be patchy,” said Sheikh Ahmed bin Saeed Al-Maktoum, the chairman and CEO of Emirates Airline and Group. “Economies and companies that entered pandemic times in a strong position, will be better placed to bounce back.”
While the pandemic has had a brutal impact on airlines worldwide, the crisis has impacted carriers and airports differently, depending on their route and passenger profiles. Because Emirates relies heavily on international travel without a domestic network, it has not benefited from the bounce back in domestic airline travel in other parts of the world, such as the US and China.
“It is not surprising that Emirates has reported a substantial loss and as with all airlines recovery will take an extended time,” aviation consultant John Strickland told Arab News. “However short term it has been able to benefit from the cargo capabilities of its 777-300ER’s. It is already evaluating options for the future shape of its fleet and network as new aircraft types enter its fleet and will extend the close partnership with flydubai which also increases its flexibility for network development options.”
Emirates Group revenues fell some 66 percent to $9.7 billion over the year. The company said it had received a capital injection of 11.3 billion dirhams ($3.1 billion) from its ultimate shareholder, the government of Dubai. Its dnata unit, which includes ground handling, travel services and catering, also received 800 million dirhams in relief, it said.
Emirates has cut costs across the group by renegotiating contracts and restructuring financial obligations which resulted in estimated savings of 7.7 billion dirhams for the year, it said.
Sheikh Ahmed said the airline aimed to recover its full operating capacity as quickly as possible.
“Together with Dubai’s undiminished ambitions to grow economic activity and build a city for the future, I am confident that Emirates and dnata will recover and be stronger than before,” he said.
Emirates’ total passenger and cargo capacity declined by 58 percent. It received three new A380 aircraft during the financial year and phased out 14 older aircraft comprising of 9 Boeing 777-300ERs and 5 A380s, leaving its total fleet count at 259 at the end of March.
Its order book for 200 aircraft remains unchanged.

 

 


Qatar sovereign fund discloses 4.69% stake in Gates-backed battery startup Quantumscape

Qatar sovereign fund discloses 4.69% stake in Gates-backed battery startup Quantumscape
Updated 8 min 29 sec ago

Qatar sovereign fund discloses 4.69% stake in Gates-backed battery startup Quantumscape

Qatar sovereign fund discloses 4.69% stake in Gates-backed battery startup Quantumscape
  • Size of stake down from 6.5% in November after shares diluted
  • Quantumscape backed by Bill Gates and Volkswagen

DUBAI: Sovereign wealth fund Qatar Investment Authority (QIA) holds a 4.69 percent stake in Quantumscape Corp, which is developing batteries for electric cars, a Securities and Exchange Commission filing by the company showed.
QIA was an early investor in the company before its IPO and had a stake of 6.5 percent as of November last year, based on a previous filing.
However the new filing does not show any change in the number of shares it owns, but a dilution in its stake due to an increase in the number of shares outstanding. QIA’s stake in Quantumscape is worth around $446 million at the company’s current market value of $9.5 billion, according to Refinitiv Eikon data on Monday.
Quantumscape was listed last year after a merger with a special purpose acquisition company (SPAC).
Shares of Quantumscape are down over 70 percent year-to-date. It closed up 0.7 percent at $23.08 on Monday.
Volkswagen AG is the company’s biggest shareholder with a 26 percent stake.
San Jose-based Quantumscape is a 2010 spin-out from Stanford University whose early investors included Bill Gates-backed venture funds. It formed a joint venture with VW to produce solid-state battery cells, starting in 2024, for VW’s electric vehicles, and eventually for other carmakers.
Gulf sovereign funds have stepped up investments in electric cars, new technologies and renewables, as they diversify their investments away from fossil fuel.
The Public Investment Fund, the sovereign wealth fund of neighboring Saudi Arabia, recently made huge gains through the listing of Lucid Group after it initially invested in the company in 2018. PIF owns 62.7 percent of Lucid.


Emirati-Swiss consortium creates MENA remittance giant with Bahrain acquisition

Emirati-Swiss consortium creates MENA remittance giant with Bahrain acquisition
Updated 42 min 18 sec ago

Emirati-Swiss consortium creates MENA remittance giant with Bahrain acquisition

Emirati-Swiss consortium creates MENA remittance giant with Bahrain acquisition
  • Prism Group and Royal Strategic Partners to acquire BFC Group Holding
  • BFC to be merged with Finablr and rebranded WizzFinancial

DUBAI: An Emirati-Swiss consortium is acquiring Bahrain’s BFC Group Holding, which owns the Gulf country’s largest money transfer and exchange company.

Switzerland’s Prism Group AG and Abu Dhabi’s Royal Strategic Partners have signed a deal to acquire BFC and its subsidiaries – BFC Bahrain, BEC Exchange (Kuwait), BFC Payments and BFC Forex and Financial Services (India).

BFC will be merged with WizzFinancial, formerly Finablr, the Abu Dhabi-based payments company acquired by the same consortium in December.

The deal creates one of the largest remittance and currency exchange groups in the Middle East and North Africa region, home to millions of migrants who regularly sending money home and vice versa.

“The acquisition creates a regional powerhouse with licenses to operate in over 30 countries,” the consortium said in a press statement.

The move comes amid a period of intense change for the financial sector as it adopts new technologies to create better user experiences.

“Everybody in the financial services arena is embarking on a digital transformation of some kind,” Anthony Wagerman, an adviser at Prism Group told Arab News. “It’s not really a matter of if, it’s a matter of when, and it’s a matter of how long that takes and ensuring your customers are with you.”

While a large part of the remittance market continues to rely on “tried and tested methodology,” the traditional money-sending sector has been disrupted by COVID-19, which “undoubtedly acted as a form of catalyst or accelerator for this digital journey,” he said.

The consortium’s investment in the businesses it is acquiring will help speed their digital transformation, but it is important to recognize that some customers will continue to use traditional methods, said Wagerman.

“We want to create a seamless service that’s completely omnichannel, from walk-up to online to mobile, because that is really the way the market is going now,” he said.

The deal comes amid evidence of impressive resilience in the sector during the COVID pandemic with remittance flows of $540 billion in 2020, just 1.6 percent below 2019 levels, according to World Bank data. That compares with a 4.8 percent decline during the global financial crisis.

Moreover, the remittance industry is set to almost double to $930.44 billion by 2026, according to Allied Market Research.

“The reports we’re seeing of the first coming up to the first half of 2021 is really quiet encouraging, and have shown a lot of businesses snapping back rather more quickly than people originally envisaged,” Wagerman said.

Asked how blockchain technology plays a role in the remittance industry’s digital journey, he said there is still a strong need for regulation in this area given the variation in countries’ different rules.

“There’s an overall attractiveness about having frictionless payments that avoided intermediaries, of course there is. The reality however is not so simple, not least because when money crosses borders, there’s all kind of issues particularly from a regulatory perspective,” Wagerman explained.


Saudi Arabia sees record IPOs requests, 50% rise in managed assets, says CMA chief

Saudi Arabia sees record IPOs requests, 50% rise in managed assets, says CMA chief
Updated 03 August 2021

Saudi Arabia sees record IPOs requests, 50% rise in managed assets, says CMA chief

Saudi Arabia sees record IPOs requests, 50% rise in managed assets, says CMA chief
  • Elkuwaiz says assets under management by financial institutions have increased by 50 percent

RIYADH: Saudi Arabia is seeing a record interests from companies to sell shares to the public, while the size of the assets under management by financial institutions increased by 50 percent to SR600 billion over 3 years, the chairman of the country’s capital market authority said.

The increase in the volume of assets under management (AUM) had impact on the financial market and has contributed to opening new investments areas such as the launch of financial derivatives market, which made a debut last year, Mohammed Elkuwaiz said in panel hosted by the Financial Academy.

The authority received recently 30 requests to sell shares in initial public offerings and this is the highest number the authority, known as CMA, got since its establishment, he added. 

Mohammed Elkuwaiz, CMA chairman

Saudi Arabia is implementing a huge program to modernize and develop its financial sector under the country’s vision 2030 plan. Under this program the CMA had a target to list 20 new companies in 2021 on the Saudi index through public offerings, and the authority had achieved half of this target by the end of the first half of the year, Elkuawiz said.

Interests from companies to sell shares to the public increased over the past few years with the introduction of the parallel market, known as Nomu. Elkuwaiz explained that the main market, Tadawul, targets larger and more mature companies with the ability and willingness to bear big loads in terms of disclosure data, governance, while smaller companies prefer to list on Nomu.

“Listing on Nomu is an exciting window for the small and medium size and entrepreneurs in Saudi Arabia as we see the increase in IPOs interest and this is the result of the CMA strategy,” said Mohammed Ramady, an independent economic analyst and former senior banker told the Arab News in comments on Saudi financial development.

Another area where Saudi Arabia is venturing and advancing is Fintech. “We have more than 15 companies licensed as financial technology companies, which facilitates the availability of other types of financing that did not exist in the past, such as crowdfunding, which has become a boost for the financial market,” Elkuwaiz added.

The chairman of CMA also noted that foreign investments in the Saudi stock market have been positive and steady since they were allowed several years ago, with more than SR20 billion has entered Tadawul market since it was included in global indexes.

“The system of governance and disclosure in the financial market has been developed, making the Kingdom one of the world’s top 4 countries in terms of governance – something we are very proud of,” he added.


Fitch revises Egyptian bank’s outlook to stable

Fitch revises Egyptian bank’s outlook to stable
Updated 03 August 2021

Fitch revises Egyptian bank’s outlook to stable

Fitch revises Egyptian bank’s outlook to stable

RIYADH: Fitch Ratings has revised Commercial International Bank (Egypt) S.A.E.’s (CIB) outlook to stable from negative while affirming the bank’s long-term issuer default rating at “B+” and viability rating at “b+.” 

According to the ratings firm, pressures on the domestic environment have eased since the end of the third quarter of 2020 moderating downside risks to Egyptian banks’ credit profiles.

It said this reflects improving foreign currency liquidity, with the banking sector’s net foreign assets reaching $3.5 billion in April 2021, a reversal of a net foreign liability position of $5.3 billion at the end of April 2020. This was supported by a strong increase in foreign holdings of Egyptian treasuries to $29 billion in May 2021.

Fitch expects real GDP growth to accelerate to 6 percent in 2022.


Egypt’s domestic liquidity exceeds $213.9 billion

Egypt’s domestic liquidity exceeds $213.9 billion
Updated 02 August 2021

Egypt’s domestic liquidity exceeds $213.9 billion

Egypt’s domestic liquidity exceeds $213.9 billion

CAIRO: Egypt’s domestic liquidity rose to EGP 5.36 trillion ($213.9 billion) at the end of June 2021.

According to the official data, liquidity grew by 1.9 percent monthly. Domestic liquidity increased by 18.3 percent annually, compared to EGP 4.53 trillion in June 2020.

The money supply rose during June to EGP 1.25 trillion, compared to EGP 1.22 trillion in May 2021.  Money supply includes deposits in local currency and cash in circulation outside the banking system.

Last November, the Central Bank of Egypt decided to reduce both the overnight deposit and lending rate and its main operation rate by 50 basis points, to 8.25 percent, 9.25 percent, and 8.75 percent, respectively.

Last month, the central bank froze the interest rate for the fourth time this year.