Virgin Australia posts best half-year result in more than a decade

The first half of the 2019 financial year has been a positive one for Virgin Australia, with the company boosting is profit by $69.4 million.

Virgin Australia’s group statutory profit after tax was $73.8 million in the six months to 31 December 2018 – a significant increase from $4.4 million in the first half of FY18.

The company’s underlying half-year earnings were the strongest it has reported since the 2008 financial year, with underlying profit before tax up 37.1 per cent to $112.3 million during the period.

Group revenue was up 10 per cent to $3.1 billion in the first half of FY18, while earnings before interest, taxes, depreciation and amortisation rose 10.7 per cent to $369.9 million.

Revenue for Virgin Australia’s domestic operations grew 10.3 per cent to $2.1 billion in the six months to 31 December, while international revenue rose 15.2 per cent to $666.1 million.

Tigerair Australia’s half-yearly revenue increased by just 0.1 per cent to $302.6 million, while Velocity Frequent Flyer’s revenue grew 9.2 per cent to $208.9 million.

Outgoing Virgin Australia group CEO and managing director John Borghetti said the strong half-year result represents the company’s improving profitability after a significant period of investment and repositioning.

“We’ve made solid progress in strengthening the financial foundations of our business,” he said.

“Today’s results continue to demonstrate the ongoing success of our cost transformation program, which is improving cash flow and reducing financial leverage to deliver sustainable profitability.

“We’ve built a strong, competitive domestic operation under the Virgin Australia domestic brand, which recorded an all-time high segment EBIT result, and is continuing to attract more customers and deliver two-thirds of our revenue.

“This is an important foundation as we continue to build on our established position in the market and mature into our new long-haul Asian routes.”

Borghetti noted that Virgin Australia’s positive group result was delivered despite $88.2 million in fuel and foreign exchange headwinds.

“While we are not immune from global economic changes, we have prudent hedging strategies and the right cost and efficiency programs in place to help mitigate against fuel price increases.”

Virgin Australia’s half-year result comes after the company announced that Flight Centre exec Paul Scurrah would replace Borghetti as CEO next month.

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half-year results virgin australia