Financial Performance

dnata's financial growth

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Overview

For 2018-19, dnata recorded its most profitable year with AED 1.4 billion (US$ 394 million) profit. This includes gains from a one-time transaction where dnata divested its 22% stake in the travel management company Hogg Robinson Group (HRG), during HRG’s acquisition by Amex Travel Business Group. Without this one-time transaction, dnata profits will be down 15% compared to the same period last year.

dnata's total revenue grew to AED 14.4 billion (US$ 3.9 billion), up 10%. This reflects its continued business growth across its four business divisions - both organic through customer retention and new contract wins; as well as via its new acquisitions. dnata’s international business now accounts for 70% of its revenue.

Laying the foundations for its future growth, dnata invested close to AED 1.1 billion (US$ 314 million) in acquisitions, new facilities and equipment, leading-edge technologies and people development during the year.

In 2018-19, dnata’s operating costs increased by 11% to AED 13.1 billion (US$ 3.6 billion), in line with organic growth across its business divisions, coupled with integrating the newly acquired companies mainly across its catering division and international airport operations.

dnata’s cash balance was AED 5.1 billion (US$ 1.4 billion), an increase of 4%. The business delivered an AED 1.4 billion (US$ 386 million) cash flow from operating activities in 2018-19, which is in line with its enhanced cash balance and puts the business in a solid position to finance its investments.

UAE Airport Operations

Revenue from dnata’s UAE Airport Operations, including ground and cargo handling increased by 2% to reach AED 3.2 billion (US$ 878 million).

The number of aircraft movements handled by dnata in the UAE remained flat at 211,000. This reflects the impact of the region’s challenging aviation environment on many of dnata’s airline customers. dnata’s Cargo handling slightly declined by 1% to 727,000 tonnes, impacted by lower demand in the overall air cargo market.

In 2018-19, dnata strengthened its position in the freight forwarding industry with the acquisition of more shares to become the sole owner of Dubai Express and Freightworks LLC; and a 51% majority stakeholder of Bolloré Logistics LLC, UAE that operates in 106 countries.

dnata also acquired a majority stake in DUBZ, a company that emerged from Dubai’s incubator programme Intelak, providing baggage delivery services to passengers arriving in Dubai, and for passengers departing Dubai to check-in their baggage and get boarding passes from anywhere in the city.

It continued to invest in technology to improve operations and customer satisfaction. Highlights include the launch of: a new cutting-edge resource management system that supports AI, autonomous vehicles, and advanced analytics to optimise staff operations at both DXB and DWC; and a new one cargo tool, a first for ground handlers, to digitise the booking process and service, ensuring a seamless experience at cargo delivery bays, and a unified engagement for customers between freight forwarders and dnata.

International Airport Operations

dnata’s International Airport Operations division grew revenue by 5% to AED 4.0 billion (US$ 1.1 billion), on account of increasing business volumes, opening of new locations and winning new contracts. International airport operations continue to represent the largest business segment in dnata by revenue contribution. The number of aircraft handled by the division further increased substantially by 9% to 488,000, and Cargo noted a growth of 1% to 2.4 million tonnes of handled goods.

During the year, dnata won over 100 new contracts in key markets, including the United States, Canada, the UK, Australia and Italy, and coupled it with solid customer retention.

dnata significantly enhanced its cargo capabilities in 2018-19. It debuted operations in Belgium with a new 14,000 m² cargo centre at Brussels Airport, built tailor-made cargo solutions across new facilities in Dallas, London Heathrow, Adelaide and Karachi, and refurbished existing facilities in Singapore and Amsterdam. In response to customer growth, dnata invested to expand at Gatwick and Manchester, and opened new cargo facilities in Islamabad and Multan airports including Pakistan’s first automated storage and retrieval system.

dnata also invested in its pharma facilities, offering more handling capability than any other company in the UK, the Netherlands, Australia and Singapore. Its ability to provide safe and reliable pharma handling services globally was recognised with IATA’s CIEV Pharma certification in Dubai and Toronto, and GDP certification in London and Zurich.

In Italy, dnata increased its share in Airport Handling SpA, a Milan-based ground handler, to 70%. At Zurich Airport, dnata was re-awarded the ground and cargo handling licence till 2025, enabling it to serve customers without interruptions. In North America, dnata launched ground and cargo handling at Los Angeles and began passenger services at New York’s JFK.

Catering

dnata’s Catering business accounted for AED 2.6 billion (US$ 717 million) of dnata’s revenue, significantly up by 23%. The inflight catering business uplifted more than 70 million meals to airline customers, an increase of 27%.

This result includes the impact of two major acquisitions - Qantas’ catering businesses, Q Catering and Snap Fresh in Australia, and 121 Inflight Catering in the US – as well as new and expanded customer partnerships, particularly in the UAE, Romania, Czech Republic and Italy.

During the year, dnata inaugurated a 2,000 m² state-of-the-art catering facility in Canberra with the capacity to produce more than 60,000 meals a month. In North America, dnata launched operations in New York, Nashville and Orlando through the acquisition of 121 Inflight Catering, and will commence operations in purpose-built facilities in Boston, Houston and Vancouver in the first quarter of the new financial year, with further facilities in the build across the U.S.

Travel

Revenue from dnata’s Travel Services division has increased by 9% to AED 3.7 billion (US$ 1.0 billion). The underlying total transaction value (TTV) of travel services sold grew by 2% to AED 11.5 billion (US$ 3.1 billion).

This performance reflects dnata’s ability to tap into, and serve a broad and diverse array of travel segments, partially offsetting the slowing demand for corporate and consumer travel in the UK and in the UAE – its two biggest markets.

In 2018-19, dnata entered the German market and expanded its travel network in Europe with its acquisition of Tropo, a tour operator selling through online travel agents and independent travel agencies. It also acquired a majority stake in BD4travel (Big Data for Travel), an award-winning tech company which provides artificial intelligence driven IT solutions in the travel sector.

dnata also significantly grew its contact centre operations with the completion of its second facility in Clark, Philippines, and the purchase of a facility in Belgrade taking its operations to 14 locations in the UAE, Serbia, the Philippines, India and the UK. With added capability and capacity, dnata successfully expanded its service contracts with key customers including a new five-year agreement with Etihad Airways to run its contact centre operations globally.