Virgin Australia has mopped up its red ink, posting a $4.4 million profit for the half year to December.
Underlying profit before tax of was up 142% to $102.5 million, the airline’s highest in ten years, on a 6% lift in revenue to $2.8 billion.
At the close, Virgin shares were down 3.8% to $0.25.
Virgin joins Qantas in the black. Qantas last week posted a record profit for the 2018 half-year despite higher fuel costs and increasing competition on the domestic market.
The underlying profit before tax of $976 million for the six months to December was Qantas’ highest and a 14.6% increase on the same period last year. Statutory profit after tax was $607 million, up 17.8%.
At Virgin, CEO John Borghetti says the result was one of the airline’s strongest for a first half.
“This demonstrates the success of our long-term strategy to reposition the business and strengthen its financial foundation; however there is more work ahead to ensure we continue to deliver,” he says.
“The improvement was driven by a number of factors including unit revenue and passenger growth, capacity and network optimisation and further progress in implementing the Better Business program.”
No dividends were declared. Total debt was reduced by $363.7 million or 13.2%.
Virgin also announced today a new daily Sydney to Hong Kong service from mid this year.
Borghetti was upbeat about the full year.
“Based on the Group’s recent positive performance trajectory, current market conditions and fuel headwinds net of foreign exchange for the second half, we expect the Group’s underlying performance for the second half of the 2018 financial year to improve compared to the Group’s underlying performance for the second half of the 2017 financial year,” he says.
The half year results in numbers: