Virgin Australia posts underlying profit of $109M ($653M "loss" after writeoffs)

[melb78]

is it about time that VA gets taken over Virgin Australia falls deeper into red with $653 million loss

 

[Andz]

Passenger numbers up, load up, not a bad outcome.

 

[melb78]

Passenger numbers up, load up, not a bad outcome.

true true but for the business it would be better to be privatise

 

[HS-TQE]

true true but for the business it would be better to be privatise

Problem is that the usual two rumoured suspects mentioned as the "acquiring party" (aka SQ and DL) have not expressed their interest in taking over in the short to medium term.

 

[tm.smile]

QF's operating margin of 12.9% vs VA's 6.7% is pretty telling. They just can't make the same money QF can.

Also in the currently operating conditions, how do you still make a loss? (After tax taking out impairments is still a ~$80m loss)...

 

[Vic]

underlying profit of $109 million. No longer recognising $452m in tax assets. Seems pretty good to me. I've been burn my virgin points on memories of Ansett. This makes me less worried.

BTW can we fix the thread title?

 

[TomJones]

Large impairments, but $109M underlying profit up from -$3.7M last year. load factors and revenue per pax up in domestic business with $500M EBITDA. International not doing that well. Not entirely doom and gloom. You'd hope so considering they operate in a virtual duopoly though.

 

[Nisho]

This is concerning.. I just hope they can survive and be a genuine competitor to QF in the long run.
I also suppose these losses mean no chances of joining an alliance in the foreseeable future

 

[Bagpuss]

Many people who invest into companies believe the first line you look at in the balance sheet is "cash in bank" and they have strong balances and much better free cashflow, up $34 million (free cash flow represents the cash a company can generate after required investment to maintain or expand its asset base. It is a measurement of a company's financial performance and health.)

It's not the bloodbath the title suggestions which is normally the case when the media report financial results. (Though the reporting company will always justify the such in other areas.)

Though always read the report which contains all the released information, not just a snapshot.
https://hotcopper.com.au/documentdownload?id=uOMxKKzFkiWRTLKhOROKAxjvSDYL4g68yBH1v+F497FiGug=

 

[TheInsider]

I also suppose these losses mean no chances of joining an alliance in the foreseeable future

And they weren't even looking at it. How many years in a row does the company needs to say that they are not interested.

 

[Bagpuss]

I also suppose these losses mean no chances of joining an alliance in the foreseeable future

This is your own conclusion (in which you acknowledge).

Speculation is not something you can put into an ASX release. It has to be true and factual. VA can only report on an alliance if they are actually actively working on it and the relative costs would appear in the accounting. They would probably make it a headline .. IE .. "$50 million in preparation works to join **alliance**"

Though in reality there would be an announcement in regards to the joining of an alliance and then the costs reporting in the account reporting.

 

[theblank]

underlying profit of $109 million. No longer recognising $452m in tax assets. Seems pretty good to me. I've been burn my virgin points on memories of Ansett. This makes me less worried.

Correct, its a bullshit Thread and Media Title. They did not finish in the RED. the EBITDA was pretty good.

if someone was buying shares in the business today, they couldnt give a stuff about past writedowns.

 

[AustraliaPoochie]

So, its finally it then, is it?
VA going the way AN did all those years ago, getting too ambitious, going to too many places.
Wonder who will turn off the VA bright lights once JB leaves.

 

[moa999]

Current shareholding structure basically means it can't get taken over and it can't join an alliance. It's in a bit of a standstill.
I also suspect a full takeover by a foreign party makes it even harder to keep the structure that allows VA International to operate, not that it seems to be profitable at present.

Interesting that Velocity results are substantially negative yoy, whereas QFF got a minor increase.

 

[Saab34]

Interesting point at the end in regards to out of the blue robust performance in July. That’s a big increase they are quoting there not seen in recent years. Not sure what happened there but looks like people are spending big again.

Tiger should never have got rid of the Airbus. It’s cost them more in the current dual fleet drama than any cost benefit of a whole 737 fleet would ever have given them.

Essentially it looks like they are closing off the transformation program and will start the next decade very strongly. 2020-2030 is going to be there time to shine.

 

[Bagpuss]

Tiger should never have got rid of the Airbus. It’s cost them more in the current dual fleet drama than any cost benefit of a whole 737 fleet would ever have given them.

Don't think the fleet change has really started. Tiger now have their 4th B737 (which they had 1 B737 from VA, went back to VA, and they just got back, the other 3 were for Bali flights).
One A320 "left the fleet" and went to Virgin Australia Regional, with VARA now having 3 A320's instead of 2.

 

[Saab34]

What’s this world class App they are talking about in the press release. I can’t even see the seat map yet!

A lot of work to be done in the digital space. Very Poor currently, look at DL, it’s mind blowing what can be done. On the velocity site, on my phone yesterday, there was no box to insert the username and password. Long way to go yet.

 

[Cool Cat Phil]

I was so pleased to see the cheque i received a few months received from the VA share registry for the shares that i held and were paid out under compulsory acquisition.

I took a massive loss compared to the initial share price i purchased the VA shares for, although a capital loss helps for tax purposes and final realisation i can wipe my hands in holding shares in company that has been one huge disappointment from financial perspective.

 

[pauly7]

QF's operating margin of 12.9% vs VA's 6.7% is pretty telling. They just can't make the same money QF can.

QF still pulling in the lion share or corporates...

And they weren't even looking at it. How many years in a row does the company needs to say that they are not interested.

How many years of their customers screaming for an alliance until they listen? But I understand your point and agree, it’s not going to happen as NZ and United are waiting with knives sharpened to gut them if they even try for Star!

Interesting that Velocity results are substantially negative yoy, whereas QFF got a minor increase.

Virgin don’t have full control or ownership of Velocity so hard to drill down to who is at fault here... certainly the banking environment has changed but QF was hurt equally by this so no excuse.

 

[sven89]

Found this article an interesting point I hadn’t considered when reading the other coverage today:

Virgin board clears the decks for John Borghetti's successor