Emirates Group records 30th consecutive year of profit of Dh 4.1bn

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Expo 2020 Update

DIFC promotes FinTech innovation

News

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Released in its 2017-18 Annual Report, the Emirates Group posted a profit of AED 4.1 billion (US$ 1.1 billion) for the financial year ended 31 March 2018, up 67% from last year. The Group’s revenue reached AED 102.4 billion (US$ 27.9 bil-lion), an increase of 8% over last year’s results, and the Group’s cash balance in-creased by 33% to AED 25.4 billion (US$ 6.9 billion) supported by the bond issued in March and strong sales due to the ear-ly Easter holidays at the end of March. In line with the overall profit, the Group de-clared a dividend of AED 2.0 billion (US$ 545 million) to the Investment Corpora-tion of Dubai.

H.H. Sheikh Ahmed bin Saeed Al Mak-toum, Chairman of Dubai Civil Aviation Authority and Chief Executive of Emi-rates Group, said: „Business conditions in 2017-18, while improved, remained tough. We saw ongoing political instabili-ty, currency volatility and devaluations in Africa, rising oil prices which drove our

costs up, and downward pressure on mar-gins from relentless competition. On the positive side, we benefitted from a healthy recovery in the global air cargo industry, as well as the relative strengthening of key currencies against the US dollar. „We’ve always responded to the challenges of each business cycle with agility, while never losing sight of the future, and this year was no exception. In 2017-18, Emi-rates and dnata delivered our 30th conse-cutive year of profit, recorded growth ac-ross the business, and continued to invest in initiatives and infrastructure that will secure our future success.“

In 2017-18, the Group collectively inves-ted AED 9.0 billion (US$ 2.5 billion) in new aircraft and equipment, the acqui-sition of companies, modern facilities, the latest technologies, and staff initiati-ves. Emirates announced two significant commitments for new aircraft during the year: a US$ 15.1 billion agreement for 40 Boeing 787-10 Dreamliners which will

The Emirates Group announced its 30th consecutive year of profit and steady business expansion.

UAE ECONOMIC BULLETIN

EMBASSY OF THE

UNITED ARAB EMIRATES

BERLIN

Interview with H.E. Ali Abdulla Al Ahmed, Ambassador of the UAE in Berlin

“He who does not know his past cannot make the best of his present and future, for it is from the past that we learn.”

continue reading on page 6

The recently published Global Know-ledge Index underpins the impressive development of the UAE and ranks them 25th out of 131 countries - the first in the Middle East. Do you consider your goals accomplished or is this merely the beginning of long-term investments into education?

There’s always room for improve-ment and development. While we are of course quite happy with our relatively good ranking in the Glo-bal knowledge Index, we aspire to

Transpor t

be delivered from 2022, and a US$ 16 billion agreement for 36 additional A380 aircraft, including 16 options. Dnata’s key investments during the year included: ac-quisition of AirLogistix USA, marking its entry in the US cargo market; expansion of cargo handling capabilities with new warehouses and equipment at London Gatwick, Amsterdam-Schiphol, and Ade-laide; new catering facilities in Dublin and Melbourne; and new marhaba lounges in Karachi and Melbourne. Sheikh Ahmed said: „While expanding our business and growing revenues, we also tightened our cost discipline. Across the Group, we re-vamped various initiatives to rebuild and streamline our back office operations with new technology, systems and processes. In 2017-18, our reduced recruitment activity, cou-pled with restructured ways of working gave us gains in productivity, and a slowdown in manpower cost increases.“ Across its more than 80 subsidiaries, the Group’s total workforce declined by 2% to 103,363, representing over 160 dif-ferent nationalities, as part of the overall productivity improvement initiatives in Emirates and dnata.

Sheikh Ahmed concluded: „Looking ahead, Emirates and dnata remain fo-cused on delivering safe, efficient and high quality services consistently to our customers. Our ongoing investments in our people, technology, and infrastruc-ture will help us maintain our competi-tive edge, and ensure that we are ready to

meet the opportunities and stay on course for sustainable and profitable growth.“

During the year, Emirates carried a new record of 58.8 million passengers and 2.6 million tonnes of cargo across our net-work. The average seat load factor was 77.5% against a 2% increase in capacity. This reflects the modest uptick in consu-mer confidence and travel demand, the healthy rebound in airfreight demand, and Emirates’ continued ability to win over customers with our award-winning products and services – both above and below wing. As the financial year 2017/18 began, the new US restrictions on elect-ronic devices in aircraft cabins had just

come into effect. This followed the en-hanced security vetting procedures and new US entry requirements implemen-ted at the start of 2017. Emirates worked closely with stakeholders to address the new security requirements, and by July, our US flights were no longer subject to the ‘electronic ban’. However, the raft of enhanced security measures had impac-ted consumers’ travel appetite, leading the company to reduce services to the US for several months. It was close to year-end before we were able to restore some of our US capacity in line with the gra-

dual recovery in demand. Through the year, the company continued to lay a solid foundation for our future with significant investments in our people, products, air-craft, and the latest infrastructure for our business. This will help extend our com-petitive edge and ensure our long-term success.

During the same year Emirates added two new passengers and three new freighter de-stinations to their global network, offering their customers even more travel choices. In addition to their organic network growth, we also expanded our global con-nectivity through strategic partnerships. In July, a significant partnership with flyd-

ubai, which includes an exten-sive codeshare agreement, inte-grated network collaboration, fleet synergies, strategic sche-dule alignment, and initiatives to streamline the customer journey across Emirates’ and flydubai’s operation Dubai In-ternational airport. At the end of March, Emirates’ customers

could access 92 additional destinations on flydubai’s network. The company extended their successful partnership with Qantas for a further five years until 2023, ensuring customers of both airlines continue to en-joy expanded travel choices and seamless connections between Australasia and key cities in Europe, Middle East and Africa, as well as reciprocal frequent flyer benefits.

The full 2017-18 Annual Report of the Emi-rates Group – comprising Emirates, dnata and their subsidiaries – is available at: www.theemiratesgroup.com/annualreport

„Business conditions in 2017-18, while improved, remai-ned tough. We saw ongoing political instability, currency

volatility and devaluations in Africa, rising oil prices which drove our costs up, and downward pressure on mar-

gins from relentless competition. - H.H. Sheikh Ahmed bin Saeed Al Maktoum

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Expo Update

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Transpor t

Expo 2020 Dubai

Etisalat has completed the first phase of construction of two points-of-presence (PoPs) that will be the main interconnec-tion point for the provision of IT services to the Expo 2020 site as well as serve as a communications gateway to the outside world at the global event.

A pair of Tier III PoPs are currently being constructed at the Expo 2020 site expec-ted to provide resilience, carry inward and outward traffic and deliver connectivity services to all users visiting the first World Expo in the region.

The PoPs will support a virtualised net-work powering the latest IT systems and including a central telecom hub that will eventually support the ‘Dubai South’ com-munity after Expo 2020. These points will also support all telecom services, namely fixed, mobile, Wi-Fi and IPTV services, and provide the expected millions of visi-tors with connectivity experience at Expo

2020. Construction of the PoPs is set for completion by the end of 2018.

Esmaeel Alhammadi, senior vice pre-sident, network development, Etisalat: “Today’s strategic announcement is signi-ficant as it sets the path for the next level of digital infrastructure development for Expo 2020 Dubai. This is in line with the country’s objectives of achieving digital transformation with the deployment of best-in-class technology and infrastruc-ture to provide advanced services to all customers and visitors at this global event. Etisalat will continue to work closely with the Expo 2020 team in enabling digital in-novation to make sure that all visitors will enjoy a seamless experience on their digi-tal journey at the global event.”

Mohammed Alhashmi, senior vice presi-dent - innovation and future technologies, Expo 2020 Dubai, said: “One of the most critical parts of any global event is the di-

gital highway that enables the electronic services on which we all so heavily rely.

“Today is an important milestone for Expo 2020 and Etisalat. We have worked together with our Official Premier Partner to build a network capable of connecting Expo to the world and the world to Expo. This project epitomises Expo 2020’s main theme, ‘Con-necting Minds, Creating the Future’.”

Etisalat is the Official Telecommunications and Digital Services Partner for Expo 2020 and is involved in creating the infrastruc-ture for the site to make it one of the fastest, smartest and best-connected places in the world. As part of the Premier Partnership, Etisalat is involved in creating a telecom-munication infrastructure for the Expo site that will provide on-site Wi-Fi capable of handling 300,000 visitors daily and deliver a cutting-edge, immersive digital experi-ence that brings the Expo theme to life for the 25 million expected visits.

Etisalat completes first phase of Expo 2020 connectivity project

26 projects from 22 countries have been selected in the third cycle of Expo Live’s flagship Innovation Impact Grant Pro-gramme, following a rigorous evaluation process that included live presentations in Dubai. The competition was particularly strong in this cycle, with more than 1,200 applications from 114 countries. Also a German innovtion was selected.

Expo Live supports projects whose creati-ve solutions to pressing challenges impro-

ve people’s lives or preserve the planet, or both. These innovators will join an exis-ting community of Expo Live Global In-novators, bringing the total to 70 grantees from 42 countries.

Dozens of innovations, ranging from ag-ricultural initiatives that empower women and farmers to novel products that could combat desertification or plastic waste, are among the latest to receive a major boost from global social impact programme,

Expo Live, run by organisers of the Expo 2020 Dubai. The Global Innovators operate in an array of fields, including healthcare, education, renewable energy, fintech, waste management and water management.

Germany’s Coolar, for example, has de-veloped a solar-powered refrigerator that can store life-saving vaccines in off-the-grid, remote locations without the need for electricity. The Expo Live grant will help the firm pilot the refrigerator.

Expo 2020 Dubai backs 26 projects that improve lives, protect the planet

Finance

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Under the MoU, FinTech Hive at DIFC - the first financial technology accelerator in the MEASA region will collaborate with Accenture’s FinTech Innovation Labs in New York, London and Hong Kong, to share resources and knowledge on the latest research and trends in fi-nancial technology.

The agreement will help build long-term relationships across the accelerator’s in-ternational initiatives, further cement-ing synergies between the DIFC and Accenture.

FinTech Hive at DIFC gives enterpris-es in the finance sector access to state-of-the art technologies to support their digital transformation while providing innovators and entrepreneurs with in-valuable access to potential clients and investors.

Arif Amiri, Chief Executive Officer of DIFC Authority, said: “This agreement leverages DIFC’s position as the top Fin-tech hub in the region and Accenture’s expertise in shaping a world-class in-novation platform. The UAE’s position as a hub for financial institutions and for innovative talent gives the FinTech Hive at DIFC a competitive advantage for fostering FinTech growth. What sets

us apart is our ability to harness the assets to grow Fintech locally that will ultimately create more jobs, attract in-vestments and support the economy as a whole. By teaming up with Accenture’s FinTech Innovation Labs from around the world, we aim to utilise this demand to support innovation and growth as well as strengthen Dubai’s position as one of the world’s top 10 FinTech hubs.”

The FinTech Innovation Labs are an-nual 12-week accelerator programmes that bring together early-stage financial technology companies and the world’s leading financial institutions. Globally, the Labs’ alumni companies have raised more than $1.07 billion in venture fi-nancing after participating in the pro-grammes.

Sushil Saluja, a senior managing direc-tor in Accenture’s Financial Services practice, added: “We are excited to fur-ther grow our fruitful partnership with the DIFC. Accenture will facilitate and create ties between the DIFC acceler-ator and our FinTech Innovation Labs in Europe, North America and Asia. In

today’s hyper-connected world, this type of alliance is critical for maximising tal-ent development and innovation. With surging demand for FinTech solutions and Dubai’s increasing presence on the global financial scene, we are confident that this international collaboration will generate incredible opportunities for the region.”

DIFC has recently announced that the 2018 programme, which is opening for applications in May, will be expanded to include insurance, Islamic finance, and regulatory technology services. First Abu Dhabi Bank, Arab Bank and Noor Bank will join the programme this year, with returning financial institutions to include Abu Dhabi Islamic Bank, Citi-group, Emirates Islamic, Emirates NBD, HSBC, Mashreq, Standard Chartered, UAE Exchange, and Visa.

DIFC partners with Accenture for FinTech innovation

Dubai International Financial Centre (DIFC) has signed a memorandum of understanding (MoU) with Accenture to foster innovation in the financial services industry.

News

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DIGITISATION

DP World selects Oracle Consul-ting for cloud project

DP World has selected Oracle Consulting to deploy cloud solutions as part of its digital transformation program. Oracle Consulting is managing the deployment of Oracle cloud solutions, which has com-menced with DP World‘s UAE Region and Middle East and Africa Region. The ports and logistics provider announced in January that it would utilize Oracle cloud applications to standardize core processes including finance, operations, procure-ment and human resources. The company also said it would incorporate technologies in artificial intelligence, machine learning, Internet of Things (IOT) and blockchain in the project. Oracle Consulting is sup-porting the roll out of the full suite of Fu-sion Enterprise Resource Planning (ERP), Human Capital Management (HCM) and Enterprise Performance Management (EPM) Cloud solutions. Oracle Consul-ting Teo Chin Seng, Senior Vice President IT, DP World Group, said: „Our focus on building our digital capability follows our vision to become a digitized global trade enabler and we working to achieve a new operational efficiency level while creating value for our stakeholders.“ Arun Khehar, Senior Vice President - Business Appli-cations, ECEMEA, and Oracle said: „Fol-lowing the recent announcement of our strategic partnership to help DP World drive its global digital transformation with our best-in-class Cloud Suite of Applica-tions (SaaS), we are proud to extend our collaboration by leveraging the deep ex-pertise of Oracle Consulting to drive this large scale project. We are confident that this strategic cloud deployment will help them deliver the next level of innovation and differentiation.“

ENERGY

Emicool bags district cooling con-tract for Expo 2020 Dubai

Dubai Investments subsidiary Emirates District Cooling (Emicool) has been awar-ded a contract to develop a district cooling plant for Expo 2020 Dubai. The plant will serve the Expo Village and Dubai South Mall, as well as the Conference and Exhi-bition Centre at the Expo site, the Roads & Transport Authority [RTA] station, and the Project Star mall area. Al Nasr Con-tracting Company has been appointed by Emicool as the contractor for the project.

With construction currently being fast-tracked, the project will have a capacity of 60,000 tonnes of refrigeration (TR) upon completion, including 48,000 TR of me-chanical chillers and 12,000 of thermal energy storage [TES]. Phase 1 of the dis-trict cooling plant project is expected to start delivery of chilled water in May 2019. Emicool, which provides district cooling services to more than 19,000 customers in the UAE, has plans to increase the capacity of its plants to 500,000TR by 2020.

AID WORK

ERC launches solar-powered water pump project in Yashbem, Yemen

The Emirates Red Crescent, ERC, yester-day launched a project to construct an integrated solar-powered water pump in Yashbem, Shabwa Governorate, which will benefit nearly 5,000 people. Following the launch, Ahmed Al Niyadi, ERC Re-presentative in Shabwa, said that the pro-ject reflects the desire of the UAE and its leadership to improve the humanitarian conditions in Yemen while noting that it is also part of the ERC’s efforts to restore local infrastructure and ease the suffering of local residents, to alleviate their dire conditions. Al Niyadi also highlighted the ERC’s efforts to solve the problem of water scarcity in Shabwa and stressed that this is a major problem that affects the re-sidents of desert areas. The ERC is keen to support this project, to provide water and irrigation, he added. Nasser Baoum, Director of the Rural Water Corporation in Shabwa, thanked the UAE’s leadership, government and people for implementing infrastructure and services projects. Local residents also thanked the UAE and ERC for implementing key infrastructure and utilities projects.

TRADE

Global sugar trader renews UAE supply chain contract

Alvean Sugar, the world’s leading sugar trader, has signed a long-term raw sugar sale contract with Al Khaleej Sugar, the owner and operator of the world’s largest sugar refinery in Dubai.

Al Khaleej has had a long-term relation-ship with one of Alvean’s shareholders, Copersucar, for nearly two decades in which the former purchased more than 20 million tonnes of raw sugar worth around US $6 billion from Copersucar. “The rela-tionship, now lying with Alvean, has been

further strengthened with the entry of this new long-term raw sugar procurement contract,” said Jamal Al Ghurair, mana-ging director of Al Khaleej Sugar. Alvean, the world’s largest sugar trader, is a joint venture formed by US agricultural group Cargill and Brazil’s Copersucar in 2014. Al Khaleej and Copersucar also co-operated in developing and introducing high polarisa-tion raw sugar. “The relationship, now lying with Alvean, has been further strengthened with the entry of this long-term raw sugar procurement contract. We are delighted to have concluded the business and look for-ward to working with Alvean,” added Al Ghurair. Gareth Griffiths, CEO of Alvean, said, “We are pleased to have entered this long-term supply contract, building on the close relationship we, and our shareholder Copersucar, have developed with Al Kha-leej over nearly two decades.” Griffiths said, “With our high-quality sugar supply and operational excellence, we are uniquely placed to serve the demands of Al Khaleej. But this is also more than just a sugar con-tract. It is an unprecedented demonstration of commitment and trust in the sugar mar-ket, which we believe will facilitate other opportunities and synergies for our two companies in the future.“

SUSTAINABILITY

Business leaders meet in Dubai to achieve UN SDGs

Business leaders in Dubai met recently to discuss harnessing their employee resour-ces to achieve the United Nations’ Sustaina-ble Development Goals, SDGs. Mobilizing volunteering programs to achieve sustaina-ble change by 2030 was the focus of a Lea-dership Forum organized by DP World and Emirates NBD as part of IMPACT 2030 - the only international private-sector led coalition aligning employee resources to achieve the goals which focus on key global issues such as poverty, inequality and cli-mate change. Objectives of the Leadership Forum include increasing the knowledge and understanding of IMPACT 2030 as a global private sector led collaboration to mobilise volunteers to achieve the SDGs, sharing the results from a UAE survey on volunteering in which 48 companies took part with 90,000 volunteers contributing al-most one million volunteer hours through their activities in 2016 and identifying next steps on how to align employee volun-teering with the SDGs. DP World Group Chairman and CEO, Sultan Ahmed bin Sulayem, said, „Private sector collaboration will contribute enormously to the success of the goals of the United Nations and com-panies in the UAE are playing a leading role in this region.

Inter view

6

be among the top 5 countries if not the very top. One of the major pillars of the UAE 2021 vision is World Class Education, because we believe that only by providing our children and young men and women with the best possible education, we could build a nation that has the expertise and the know-how to drive the de-velopment further.

To achieve that the UAE’s Ministry of Education developed the Education 2020 strategy, which is a series of ambitious five-year plans designed to bring significant qualitative improvement in the education system, especially in the way teachers teach and stu-dents learn.

Smart learning programs, new teachers‘ codes, licensing and evaluations systems, as well as curriculum revision, inclu-ding teaching math and science through English, are all part of the strategy. A key area of focus has been to transform K-12 programs, to ensure that students are fully prepared to attend universities around the world and compete in the global marketplace.

Do you also see the UAE and the steep progress it has made as role model for other countries in the region and do you plan to increase your engagement with them? How could German companies support this?

Well, we are very proud of the progress we have made over the past 46 years since the inception of the UAE and would be very happy for countries in the entire region to succeed, flourish and thrive. I can’t of course speak on behalf of other countries but I certainly would hope that their perception of the UAE and its progress is indeed seen as a model to emulate. Just recently this year, a survey has been done among Arab youth in 16 different Arab countries. The survey results found that young Arabs across the region viewed the UAE as a model. Driven by robust and diversified econo-my as well as visionary leadership known for their extensive humanitarian work overseas, the United Arab Emirates have developed a global reputation for encouraging a „can-do“ attitude among its residents respectful of religious and cultural diversity.

HH Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, reviewed the Arab Youth Survey and said “The UAE is a country for everyone; the ambitions of young Arabs align with ours, and our dream is for the entire Arab region to prosper.” this underpins the UAE’s aspirations for the entire region.

Your Excellency, amid the current dissent among the GCC members, how will the UAE make sure that the organization’s overall vision is realized?

Well, last year the whole region was marked by a constant loss of balance, polarization and regional interference. But the UAE has always faced challenges throughout the years, and has never stopped going forth when obstacles appear. So we will, together with Saudi Arabia and other GCC countries, continue working on the unity and stability of the Gulf. Recently the global services firm UBS has foreseen that progress toward diversifying non-oil sectors will help the six-nation Gulf Cooperation Council economies will boost GDP prospects in 2018. So things are indeed looking positive for the Region.

Imprint

Publisher Embassy of the United Arab Emirates Hiroshimastr. 18-20D-10785 Berlin

Telefon: + 49 (0)3051651451www.uae-embassy.ae

Ghorfa Arab-German Chamber of Commerce and Industry e.V.Garnisonkirchplatz 1 D-10178 Berlin

Telefon: + 49 (0)30278907-0www.ghorfa.de

AmbassadorH.E. Ali Abdullah Al Ahmed

Secretary GeneralAbdulaziz Al-Mikhlafi

EditorDr. Abdulla Al MandoosAhmed ShalabyMarcus Schoft

Layout: Fadhl Al-Romaima

@uaeembassyger

@uae_berlin

@Ghorfa_Germany

H.E. Ali Abdulla Al Ahmed, Ambassador of the UAE in Berlin

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entra

l Ban

k

* Em

irates

Inter

bank

Offe

red R

ate (in

teres

t cha

rged

by

UAE

bank

s for

inter

bank

tran

sacti

ons)

* Pur

chas

ing M

anag

ers’ In

dex:

a com

posit

e ind

icato

r of o

pera

ting c

ondit

ions

in th

e non

-oil p

rivate

secto

r eco

nom

y (+5

0 rep

rese

nts e

xpan

sion)

.

270

259

264

124

114

109

4350

53

Impo

rts

Reex

ports

Expo

rts

2016

426

2014

437

2015

424

265.4

279.7

290.6

137.8

78.3

58.1

2014

2015

2016

Nom

inal G

DP ($

bn) Oil

GDP

Non-

oil G

DP

65.8%

78.1%

83.3%

34.2%

21.9%

16.7%

*All f

igure

s inc

lude D

irect

trade

& Fr

ee Z

ones

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e

Sour

ce:E

mirat

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ce: F

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atus

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llasd

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ce: W

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3,200

3,300

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ided

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