Emirates Group Profit Drops 28% as Virus Cuts Into March Income

(Bloomberg) --

Emirates Group, owner of the world’s biggest long-haul airline, plans to tap the debt market after a 28% decline in full-year profit as the impact of the coronavirus cut into earnings in March.

Net income for the year ended March 31 fell to 1.7 billion dirhams ($463 million) from 2.3 billion dirhams year ago, according to a statement. Revenue dropped to 104 billion dirhams, impacted by the Dubai airport runway closure in the first quarter and the pandemic in the fourth quarter.

Emirates Group raised $1.2 billion in financing in the first quarter to provide a cushion for the impact of the virus on cash flows, and plans to tap the bank market for further liquidity in the first fiscal quarter of 2020-21 that started in April.

The March results were “severely impacted” by the suspension of flights following the lockdown by countries due to the spread of the coronavirus, it said. Profit for the month was more than 1.5 billion dirhams worse than expected and the group lost over 3.4 billion dirhams in revenue.

The group, which includes Emirates airline and Dnata ground handling unit, didn’t declare a dividend for the financial year.

• Emirates airline profit 1.06 billion dirhams vs 871 million
  • Revenue 92 billion dirhams vs 98 billion
• Dnata profit 618 million dirhams vs 1.45 billion
  • Revenue 14.8 billion dirhams vs 14.4 billion

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Emirates Group also said:

“Emirates has taken various measures to manage the business through this crisis, including compensating cost saving measures, reductions to discretionary capital expenditure and agreeing additional working capital facilities”

“These measures also include obtaining committed support from the Government of Dubai which has publicly confirmed that they will financially support Emirates during this period through a variety of measures including an additional equity injection, if required”

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