Dnata took an £18 million hit from the collapse of Thomas Cook, parent Emirates Group has revealed.
First-half (H1) profits at dnata (six months to 30 September) fell 64% to £66 million from £183 million this time last year when its balance sheet was boosted by a one-off gain of £68 million from the sale of its 22% stake in TMC, Hogg Robinson Group.
Emirates said Cook was a “major customer” of dnata’s travel and catering businesses in the UK.
Cook’s collapse, Emirates revealed, “resulted in an impairment loss on trade receivables and intangible assets amounting to AED 84 million [£18 million]”.
Dnata Travel Group, which comprises a range of businesses including UK brands such as Gold Medal, Travel 2, Netflights and Global Travel Group, posted half-year revenue up 7% year-on-year to £381 million.
Emirates said “strong revenue contributions” from new dnata brands, including Tropo and Dunya Travel, “helped offset weaker travel demand in other key markets” and the negative impact of a strong US dollar against the euro and sterling.
Emirates Group H1 profits came in up 8% on last year at £250 million, while revenue fell 2% to £11.3 billion.
The group said its results were impacted by a 45-day runway closure at Dubai International airport for renovations; “unfavourable currency movements”; and the collapse of Cook. Tailwinds though included a 13% decline in fuel costs.
Emirates’ H1 carryings fell 2% year-on-year to 29.6 million passengers, although passenger yield increased 1% during the same period.
Sheikh Ahmed bin Saeed Al Maktoum, chairman and chief executive of Emirates airline and group, described the business’s performance as “steady and positive” amid “tough trading conditions and socio-political uncertainty in many markets around the world”.
Al Maktoum said the business had also kept “a tight rein” on controllable costs and continued to seek efficiencies while ensuring resources were available “to capitalise on areas of opportunity”.
Looking ahead, Al Maktoum added: “The global outlook is difficult to predict, but we expect the airline and travel industry to continue facing headwinds over the next six months with stiff competition adding downward pressure on margins.”