In its 59 years of operation, 2017-18 has been dnata’s most profitable year, crossing AED 1.3 billion (US$ 359 million) profit for the first time. Building on its strong results in the previous year, dnata's revenue grew to AED 13.1 billion (US$ 3.6 billion), up 7%. dnata’s international business now accounts for 68% of its revenue.
The strong performance was achieved through organic growth with key contract wins coupled with solid customer retention across its four business divisions, as well as the impact of acquisitions from previous year.
dnata continued to lay the foundations for future growth by investing AED 600 million in new facilities and equipment, acquisitions, leading-edge technologies and people development.
One of its key initiatives in 2017-18 was to embark on the journey to implement a new Enterprise Resource Planning (ERP) solution that will transform its business support functions, and provide real time information to enable better decision making, governance, efficiency and scalability for continued growth and expansion.
In 2017-18, dnata’s operating costs increased accordingly by 8% to AED 11.9 billion (US$ 3.2 billion), reflecting the impact of organic growth across all lines of business coupled with integrating the newly acquired companies mainly across its international airport operations.
dnata’s cash balance reached AED 4.9 billion (US$ 1.3 billion), a new record high. The business delivered an AED 1.9 billion (US$ 506 million) cash flow from operating activities in 2017-18, which is also a new record in line with the enhanced cash balance.
In addition to the steady delivery of initiatives started in 2014 to optimise its operations, covering facility improvements, process changes, infrastructure upgrades and IT development, dnata also successfully tested the use of blockchain technology to further streamline and simplify its cargo delivery processes from origin to final destination.
Revenue from dnata’s UAE Airport Operations, including ground and cargo handling increased by 4% to reach AED 3.2 billion (US$ 859 million).
The number of aircraft movements handled by dnata in the UAE declined by 2% to 211,000 impacted by the geopolitical situation in the region, whereas Cargo handling increased by 2% to 731,000 tonnes, supported by the strong overall air cargo market.
dnata’s International Airport Operations division grew revenue by 14% to AED 3.8 billion (US$ 1.0 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 10% to 449,000, and Cargo noted a substantial growth of 10% to 2.4 million tonnes of handled goods.
dnata continued to win over customers with its high quality standards, inking over 90 contracts with new and existing customers during the year.
During the year, dnata made significant investments which expanded its capability and global presence. In May, dnata entered the US cargo market with its acquisition of AirLogistix USA. The investment includes state-of-the-art cargo handling facilities in Houston and Dallas Fort-Worth. dnata also expanded its cargo handling capabilities at Gatwick, opened an additional cargo warehouse in Schiphol, and a new airside cargo facility in Adelaide.
In the US, it received a new licence to provide ground handling services at John F. Kennedy International Airport’s (JFK) Terminal 4; and it commenced operations at JFK’s Terminal 8. In Singapore, dnata began operations at Singapore Changi Airport’s new Terminal 4; and opened a new maintenance base for ground service equipment.
dnata’s Catering business accounted for AED 2.1 billion (US$ 585 million) of its total revenue, up 7%. The inflight catering business uplifted more than 55 million meals to airline customers.
During the year, dnata opened a state-of-the-art catering hub at Melbourne airport, the largest such facility in the southern hemisphere, and a second catering facility in Ireland at Dublin airport. It also entered the Canadian market when it was awarded a licence to provide flight catering services to airlines departing Vancouver International Airport, and has commenced plans to build a dedicated catering facility there.
dnata strengthened its presence in the North American market with the acquisition of 121 in-flight catering, a New York-based in-flight and VIP caterer in March. This is pending approval from the Committee of Foreign Investments in the United States (CFIUS). In April 2018, dnata announced the acquisition of Qantas’ catering business, subject to the approval of the Australian Competition and Consumer Commission.
Revenue from dnata’s Travel Services division has seen a turnaround after last year’s decline with an increase of 8% to AED 3.4 billion (US$ 922 million). The underlying total transaction value (TTV) of travel services sold increased by 6% to AED 11.3 billion (US$ 3.1 billion).
This solid performance was supported by dnata’s ability to tap on the upswing in both inbound and outbound tourism demand in the Middle East, and a healthy increase in long-haul travel and cruise bookings in Europe and Australia.
In 2017-18, dnata completed its acquisition of a stake in Destination Asia, a leading destination management company with operations across 11 Asian countries, making its entry into South East Asia’s inbound travel market. Its UK-based Imagine Cruising business, completed a successful first year of trading in Australia, and acquired Holiday Planet, a leading travel company in Perth to boost growth in this market.
During the year, dnata invested in technology to provide enhanced functionality and a better service experience for its partners and customers. This included the creation of two travel reservation systems for Emirates Holidays and dnata Travel’s B2B business, to replace existing ones.