Dubai Aerospace Enterprise, the Middle East’s biggest plane lessor, is optimistic but vigilant after posting a lower first-half net profit amid a divergent recovery in air traffic demand across markets, the emergence of new Covid-19 strains and the uneven distribution of vaccines.
Net profit for the first six months through to the end of June dropped to $49 million, from $121.7m in the same period a year earlier, DAE said on Wednesday. First-half revenue also fell to $613.4m, from $675.9m a year earlier.
"Recovery in passenger air traffic demand is progressing well but not evenly in all jurisdictions and for all aircraft types,” said DAE chief executive Firoz Tarapore.
“The uneven nature of vaccine deployment geographically and the emergence of virus variants remain a barrier to a predictable return to full normality.”
Available liquidity at the end of the first six months of the year climbed to $4.09 billion, from $2.69bn a year earlier. Operating cash flow rose to $498.5m from $432.2m for the period while fleet use also improved marginally to 99.1 per cent, the company said.
Despite sporadic air traffic recovery and coronavirus-induced headwinds for the aviation industry, one of the worst affected sectors of the global economy, DAE remains bullish about growth prospects in the second half of the year.
In June, credit rating agency Moody’s Investors Service revised DAE's outlook to “stable”, from “negative”, and affirmed its "Baa3" issuer rating, citing the company's strong liquidity position and capital management, and signs of a recovery in air travel.
The balance sheet remains strong, with "high levels of capital adequacy and exceptional levels of available liquidity”, the plane lessor said on Wednesday.
In April, DAE signed an agreement for the order of 15 Boeing 737 Max-8 jets valued at about $1.8bn at list prices. However, buyers usually receive discounts on the final price.
In July, DAE Capital, the company's leasing division, signed agreements to sell nine narrow- and wide-body aircraft valued at $500m. The transactions are expected to close in 2021, DAE said on Wednesday.
Overall, DAE has committed to purchase 26 aircraft and sell 27 others during the first six months of the year, it said.
“Our financial results for the first half of 2021 reflect strong origination of new technology, fuel-efficient narrow-body aircraft and a robust environment for sales of aircraft assets,” said Mr Tarapore.
“We placed a direct order with Boeing … to meet our customers’ requirements for modernising and upgrading their fleets.”
DAE, which is owned by the Investment Corporation of Dubai, raised $1bn from the debt market in June. This was its second funding deal after having raised $1.25bn in a two-tranche sale of unsecured bonds in January.
The company also sold $750m in Islamic bonds, or sukuk, in November last year.
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Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
What drives subscription retailing?
Once the domain of newspaper home deliveries, subscription model retailing has combined with e-commerce to permeate myriad products and services.
The concept has grown tremendously around the world and is forecast to thrive further, according to UnivDatos Market Insights’ report on recent and predicted trends in the sector.
The global subscription e-commerce market was valued at $13.2 billion (Dh48.5bn) in 2018. It is forecast to touch $478.2bn in 2025, and include the entertainment, fitness, food, cosmetics, baby care and fashion sectors.
The report says subscription-based services currently constitute “a small trend within e-commerce”. The US hosts almost 70 per cent of recurring plan firms, including leaders Dollar Shave Club, Hello Fresh and Netflix. Walmart and Sephora are among longer established retailers entering the space.
UnivDatos cites younger and affluent urbanites as prime subscription targets, with women currently the largest share of end-users.
That’s expected to remain unchanged until 2025, when women will represent a $246.6bn market share, owing to increasing numbers of start-ups targeting women.
Personal care and beauty occupy the largest chunk of the worldwide subscription e-commerce market, with changing lifestyles, work schedules, customisation and convenience among the chief future drivers.
Who is Tim-Berners Lee?
Sir Tim Berners-Lee was born in London in a household of mathematicians and computer scientists. Both his mother, Mary Lee, and father, Conway, were early computer scientists who worked on the Ferranti 1 - the world's first commercially-available, general purpose digital computer. Sir Tim studied Physics at the University of Oxford and held a series of roles developing code and building software before moving to Switzerland to work for Cern, the European Particle Physics laboratory. He developed the worldwide web code as a side project in 1989 as a global information-sharing system. After releasing the first web code in 1991, Cern made it open and free for all to use. Sir Tim now campaigns for initiatives to make sure the web remains open and accessible to all.
More from Rashmee Roshan Lall
Killing of Qassem Suleimani
From Europe to the Middle East, economic success brings wealth - and lifestyle diseases
A rise in obesity figures and the need for more public spending is a familiar trend in the developing world as western lifestyles are adopted.
One in five deaths around the world is now caused by bad diet, with obesity the fastest growing global risk. A high body mass index is also the top cause of metabolic diseases relating to death and disability in Kuwait, Qatar and Oman – and second on the list in Bahrain.
In Britain, heart disease, lung cancer and Alzheimer’s remain among the leading causes of death, and people there are spending more time suffering from health problems.
The UK is expected to spend $421.4 billion on healthcare by 2040, up from $239.3 billion in 2014.
And development assistance for health is talking about the financial aid given to governments to support social, environmental development of developing countries.
Profile
Company name: Marefa Digital
Based: Dubai Multi Commodities Centre
Number of employees: seven
Sector: e-learning
Funding stage: Pre-seed funding of Dh1.5m in 2017 and an initial seed round of Dh2m in 2019
Investors: Friends and family
More from UAE Human Development Report:
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Ticket prices
General admission Dh295 (under-three free)
Buy a four-person Family & Friends ticket and pay for only three tickets, so the fourth family member is free
Buy tickets at: wbworldabudhabi.com/en/tickets
