MOHD NAZMI BIN AHMAD MAHMOD
53276113048
FIKRI AIMAN BIN DIMSHARI
53276113071
R A J A M U H A M M A D F I K R I B I N R A J A M A M AT
53276113019
NOR MOHD FUAD BIN AB RASHID
53276113121
N U R F AT I N B I N T I A H M A D
53276113119
INTRODUCTION
Based in Dubai, United Arab Emirates.
Subsidiary of The Emirates Group, fully owned by government of Dubai's Investment
Corporation of Dubai.
Hub at Dubai International Airport with a total of 52,516 employees.
Operating nearly 3,400 flights per week from its hub at Dubai International Airport, to more
than 142 cities in 78 countries across 6 continents.
Cargo activities are undertaken by the Emirates Group's Emirates SkyCargo division.
ITEM
2014 (AED M)
2013 (AED M)
% CHANGES
Revenue
80,717
71,159
+ 13.43%
Other operating income
1,919
1,954
- 1.79%
Operating Cost
(78,376)
(70,274)
+ 11.53%
Operating Profit
4,260
2,839
+ 50.05%
Finance Income
247
406
- 39.16%
Finance Cost
(1,179)
(900)
+ 31%
Share of result of investments accounted for using the equity
method
136
127
+ 7.09%
Profit before income tax
3,464
2,472
+ 40.13%
Income tax expenses
(47)
(64)
- 26.56%
Profit of the year
3,417
2,408
+ 41.9%
Profit attributable to non controlling interest
163
125
+ 30.4%
Profit attributable to Emirates Owner
3,254
2,283
+ 42.53%
2014 – 2013 % changes in Income Statement
60%
50%
50%
40%
40%
42%
43%
30%
20%
13%
% CHANGES
10%
0%
Revenue
Operating Profit before Profit of the
Profit
Profit
tax
year
attribute to
Emirates
Owner
R
E
V
E
N
U
E
SERVICE
2014 (AED m)
2013 (AED m)
% changes
Passengers
65,405
57,477
+ 13.79%
Cargo
11,263
10,346
+ 8.86%
Excess baggage
412
388
+ 6.19%
Hotel operation
395
234
+ 68.80%
Destination & leisure
228
226
+ 0.88%
Others
459
307
+ 49.51%
78,162
68,978
+ 13.31%
2013 (AED m)
% changes
SALES OF GOODS
2014 (AED m)
Consumer goods
1,313
1,196
+ 9.78%
Food & beverage
625
502
+ 24.05%
In-flight catering
617
483
+ 27.74%
2,555
2,181
+ 17.15%
80,717
71,159
+ 13.43%
2014 – 2013 % changes in Revenue
80%
70%
60%
50%
40%
30%
20%
10%
0%
68.80%
50%
14%
Passenger
9%
Cargo
13.43%
6%
Excess
baggage
0.88%
Hotel
Destination &
Operations
leisure
% changes
Others
Sale of Goods
OPERATING COST
2014 (AED m)
2013 (AED m)
% changes
Jet fuel
30,685
27,855
+ 10.16%
Employee
10,230
9,029
+ 13.30%
Aircraft operating leases
6,548
5,916
+ 10.68%
Depreciation and amortization
6,421
5,136
+ 25.02%
Sales and marketing
5,421
5,270
+ 2.87%
Handling
4,648
4,073
+14. 12%
In-flight catering and related costs
3,529
3,159
+ 11.71%
Overflying
2,386
2,086
+ 14.38%
Aircraft maintenance
2,146
1,865
+15 06%
Office accommodation and IT costs
1,878
1,649
+ 13.89%
Landing and parking
1,568
1,335
+ 17.45%
Cost of goods sold
1,190
1,042
+ 14.20%
Corporate overhead
1,726
1,859
- 7.15%
78,376
70,274
+11.53%
2014 – 2013 % changes in Operating Cost
30%
25%
25%
20%
15%
10%
5%
10%
13%
14%
11%
12%
16%
14% 15% 14%
14%
3%
% changes
0%
-5%
-10%
-7%
Finance Income And Cost
Finance Income
2014 (AED m)
2013 (AED m)
% changes
Interest income on short term bank deposits
228
341
- 33.13%
Related parties
19
65
- 70.77%
247
406
- 39.16%
2014 (AED m)
2013 (AED m)
% changes
Aircraft financing costs
(816)
(717)
+ 13.81%
Interest charges on bond and term loans
(252)
(96)
+ 162.5%
Other finance costs
(111)
(87)
+ 27.59%
(1,179)
(900)
+ 31%
Finance Costs
2014 – 2013 % changes in Finance Income and Cost
Finance Income
Finance Cost
0%
-10%
Interest Income on
Short term bank
deposits
Related parties
-20%
-30%
-40%
Finance
Income
-33%
-50%
-60%
-70%
-80%
-71%
180%
160%
140%
120%
100%
80%
60%
40%
20%
0%
162%
Finance Cost
14%
A/c
Financing
costs
28%
Interest
Other
charges on finance cost
bond and
term loans
NON- CURRENT ASSETS
Property, plant and equipment
2014 (AED m)
2013 (AED m) % changes
71,582
57,039
+ 25.50%
Intangible assets
928
910
+ 1.98%
Investment accounted for using the equity method
495
485
+ 2.06%
Advance lease rentals
812
807
+ 0.62%
Loans and other receivables
428
508
- 15.75%
Derivative financial instruments
5
92
- 94.57%
Deferred income tax assets
-
15
74,250
59,856
CURRENT ASSETS
2014 (AED m)
+ 24.05%
2013 (AED m) % changes
Inventories
1,706
1,564
+ 9.08%
Trade and other receivables
9,086
8,744
+ 3.91%
1
67
- 98.51%
Short term bank deposits
8,754
18,048
- 51.49%
Cash and cash equivalents
7,807
6,524
+ 19.67%
27,354
34,947
- 21.73%
101,604
94,803
+ 7.17%
Derivative financial instruments
Total assets
2014-2013 % changes in Balance Sheet
30.00%
20.00%
24.05%
10.00%
10.59%
8.04%
3.54%
0.00%
-10.00%
-21.73%
-20.00%
-30.00%
% changes
Non-current assets
Current assets
Equity
Non-current libilities
Current Liabilities
24.05%
-21.73%
10.59%
8.04%
3.54%
% changes
COMMON-SIZE STATEMENTS FOR THE YEAR ENDED 2013
ITEM
MAS (%)
Emirates (%)
Revenue
95.30
96.63
Other operating income
4.56
2.65
(104.93)
(95.42)
Operating Profit / Loss
(5.07)
3.86
Unrealized foreign exchange (loss)/ gain
(1.07)
-
Finance Income
0.14
0.55
Finance Cost
(2.97)
(1.22)
-
0.17
Profit / Loss before income tax
(8.97)
3.36
Income tax expenses
(0.1)
(0.09)
Profit / Loss of the year
(9.07)
3.27
-
(0.17)
(9.07)
3.10
Operating Cost
Share of result of investments accounted for using the equity method
Profit / Loss attributable to non controlling interest
Profit / Loss attributable to Emirates Owner
Current Ratio
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠
=
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑦
2014
2013
(AED m)
(AED m)
27,354
=
32,428
34,947
=
31,319
0.844
1.116
From the ratio analysis we can say that the company can cover the liabilities on
2013 more than 2014 because the current ratio is above 1.00
So it is suggested that the business still can be re-invested in the longer term
but slightly changes in term of 2013 strategy.
Acid test ratio=
𝐶𝑎𝑠ℎ+𝑆ℎ𝑜𝑟𝑡−𝑡𝑒𝑟𝑚 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡+𝑛𝑒𝑡 𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑟𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒𝑠
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
2013
4211+18048+8744
71771
2014
4771+8754+9086
76133
= 0.43
= 0.29
Ratio analysis : Emirates Airline can pay all the current liability immediately because the company
has stable financial.
The inventory turnover ratio of emirates in 2013 is much more lower compare to 2014 from 2.52 to 2.79. This
indicates that over the year, Emirates has strong sale or ineffective buying. This also means better liquidity in the
year 2014.
The days in inventory ratio of emirates decrease from the year 2013 to 2014. The days in inventory
ration change from 145 to 131. This indicate that in 2014 Emirates has shorter days(131 days) for
them to sell inventories within 131 days. If inventory sits longer that, it can start costing Emirates
extra money
Gross profit percentage in 2013 increasing from 3.9% to 5.2% in 2014 .This indicate that in 2014
Emirates make a much more reasonable profit and able to control its production cost better.
Account receivable turnover ratio in 2014 is higher than the receivable turnover ratio in 2013
which is 88.21 and 74.10 respectively. This define that in 2014 Emirates has shorter time
between the sale and collecting the cash for that sale compare to the year 2013.
Days Sales in average account receivable=
365
74.10
365
2014
88.21
2013
365 𝑑𝑎𝑦𝑠
𝐴𝑐𝑐𝑜𝑢𝑛𝑡 𝑅𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜
= 4.92
= 4.08
In 2013 the day sales in average account receivable is 4.92 decrease to 4.08 at
2014. That means emirates has lower the average number of days it takes to
collect an account receivable.
In 2013 the debt ratio of Emirates is 0.75 which is higher from the debt ratio in 2014
which is 0.74. This decreasing debt ratio value show that in 2014 Emirates has more stable
business with the potential of longevity with lower overall debt.
Debt to equity=
71771
2013
23032
76133
2014
25471
𝑇𝑜𝑡𝑎𝑙 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
𝑇𝑜𝑡𝑎𝑙 𝐸𝑞𝑢𝑖𝑡𝑦
= 3.11
= 2.98
In year 2013 the ratio for debt to equity of emirates is 3.11 and has decrease to 2.98 in 2014.
That means Emirates has lower in debt and financially has stable business.
Times − interes𝑡 𝑒𝑎𝑟𝑛𝑒𝑑 𝑟𝑎𝑡𝑖𝑜 =
𝐸𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝐵𝑒𝑓𝑜𝑟𝑒 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑎𝑛𝑑 𝑇𝑎𝑥𝑒𝑠
𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑒𝑥𝑝𝑒𝑛𝑠𝑒
2472
2013
= 25.75
96
3464
2014
= 13.74
252
The time interest ration decreased from 25.75 in 2013 to 13.74 in 2014.This trend shows that
emirates the frequency annual interest expenses covered by net operating income of emirates is
lower in 2014. Emirates may face difficulties to raise funds for their operations.
Rate of Return on Net Sales =
2014
( AED m)
=
=
𝑁𝑒𝑡 𝑆𝑎𝑙𝑒𝑠
78,162
x 100%
2013
(AED m)
𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒
3,417
𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒
𝑁𝑒𝑡 𝑆𝑎𝑙𝑒𝑠
x 100%
x 100%
= 4.37 %
=
=
𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒
𝑁𝑒𝑡 𝑆𝑎𝑙𝑒𝑠
2,408
68,978
x100%
x 100%
= 3.49 %
Emirates generates a lot of revenues from year to year.
They got a lot of profit in 2014 compare to 2013 in term of an increasing the economy class
seat factor, cargo business, the introduction of six new services as well as the increased
frequencies or capacity to existing destinations.
Rate of return on total assets =
𝑁𝑒𝑡 𝑖𝑛𝑐𝑜𝑚𝑒+𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑒𝑥𝑝𝑒𝑛𝑠𝑒
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠
2013 = 71159+252
50802
= 1.40
2014 =80717+96
47401
=1.71
The trend of “rate of return on total asset” of Emirates Airline is increasing from, 2013 as much
as 1.40 to 1.71 in 2014 hence indicate the company’s profitability is improving .
Assets Turnover Ratio
Assets turnover ratio=
𝑁𝑒𝑡 𝑆𝑎𝑙𝑒𝑠
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠
2013=71159
50802
=1.40
2014=80717
47401
=1.70
The assets turnover ratio of Emirates Airlines in increasing from the year 2013 as much as 1.40 to
1.70 in 2014 .This increasing ratio value shows Emirates Airline is generating sales from the assets
that they have.
=
𝑁𝑒𝑡 𝑖𝑛𝑐𝑜𝑚𝑒 −𝑃𝑟𝑒𝑓𝑒𝑟𝑟𝑒𝑑 𝑑𝑖𝑣𝑖𝑑𝑒𝑛𝑑𝑠
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑐𝑜𝑚𝑚𝑜𝑛 𝑠𝑡𝑜𝑐𝑘ℎ𝑜𝑙𝑑𝑒𝑟𝑠 𝑒𝑞𝑢𝑖𝑡𝑦
2013=71159-22176
21993
=2.23
2014=80717-22762
36557
=1.58
Since the rate of return on common stockholders equity in 2013 is 2.23 which is higher compared to 2014
which is 1.58 , it explains that in 2013 Emirates Airline generates more dollars net income have been
earned for each AED invested by the common stakeholders compare to 2013 .This conclude in 2013 ,
Emirates gains higher profitability and stronger financial position compared to 2014.
=
𝑀𝑎𝑟𝑘𝑒𝑡 𝑝𝑟𝑖𝑐𝑒 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒 𝑜𝑓 𝑐𝑜𝑚𝑚𝑜𝑛 𝑠𝑡𝑜𝑐𝑘
𝐸𝑎𝑟𝑛𝑖𝑛𝑔 𝑝𝑒𝑟
𝑠ℎ𝑎𝑟𝑒
4.60
2013= 0.8038
=5.72
2014=
4.80
0.8038
=5.97
From year 2014, the price earning ratio of Emirates increase to 5.97 from 5.72 in 2013. This can be define
that emirates has higher investors are anticipating higher growth in 2014 compare to 2013. This also can
means that emirates stock in 2014 is much more expensive compare to previous year in 2013
=
𝐴𝑛𝑛𝑢𝑎𝑙 𝑑𝑖𝑣𝑖𝑑𝑒𝑛𝑑𝑠 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒 𝑜𝑓 𝑐𝑜𝑚𝑚𝑜𝑛 𝑠𝑡𝑜𝑐𝑘
𝑀𝑎𝑟𝑘𝑒𝑡 𝑝𝑟𝑖𝑐𝑒 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒 𝑜𝑓 𝑐𝑜𝑚𝑚𝑜𝑛 𝑠𝑡𝑜𝑐𝑘
2013=837
9
=93
2014= 964
9
=107.1
The dividend yield on common stock of Emirates Airlines is increasing from the year 2013 to 2014
from the ratio 93 to 107.1 . This shows that the amount of dividends per share have increased
compared to the stock price ( The stock price has declined compared to the dividends per share )
=
𝐴𝑛𝑛𝑢𝑎𝑙 𝑑𝑖𝑣𝑖𝑑𝑒𝑛𝑑𝑠 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒
𝐸𝑎𝑟𝑛𝑖𝑛𝑔 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒
2013=837
0.8038
=1041.3
2014=964
0.8038
= 1199.3
The dividend payout for Emirates increase from the year 2013 to 2014 from 1041.3 to 1199.3. A
consistent trend in this ration is usually more important than high or low ratio. However the higher
ratio conclude that in 2014, Emirates give higher percentage of net income that is distributed to
shareholders in the form dividends during the year 2014.
• Emirates had shown that the experience, knowledge and positive
performance of the Emirates Group is characterized by high efficiency
and flexibility of the company itself.
• This is the result of adopting and encouraging fair competition,
transparency and an open skies policy.
• The future of Emirates group is bright because they implement high
professional standards and commitment in their works.
The End
THANK YOU FOR GIVING ATTENTION TO OUR PRESENTATION.
LOTS OF LOVE.