Virgin Australia's statutory net loss has deepened to $A653.3 million for the 2018 financial year despite record earnings in its domestic business and an increase in underlying profit before tax.
The statutory after-tax loss compared to a result last year of $185.8 million and came as group revenue grew by 7.4 percent to $A5.4 billion.
The group’s underlying profit before tax of $A109.6 million was up $A113.3 million on the 2017 financial year. Its net loss attributable to shareholders was $A681 million, an deterioration on the previous year's negative figure $A220.3 million.
Virgin chief executive John Borghetti said this was the highest underlying pre-tax profit in 10 years and pointed to the strength of the airline’s domestic business, which represents two-thirds of its revenue base.
“The Virgin Australia domestic business recorded its highest EBITDA, EBIT and EBIT margin results since domestic segment reporting began,’’ he said.
Borghetti said the group’s $A653.3 million statutory loss was affected by major accounting adjustments “following a review of the group’s asset values in accordance with accounting standards”.
“As a result of the review, approximately $A451.9 million in deferred tax assets have been derecognized and there has been an $A120.8 million impairment of the assets of the Virgin Australia International business,’’ he said.
The statutory result was also affected by restructuring charges due to the airline's decision to simplify its fleet" and other initiatives, Borghetti said. These amounted to about $A148.5 million, $A96.7 million less than similar charges the previous financial year.
The Virgin chief said the adjustments were non-cash and did not impact the fundamentals of the group’s underlying business and he was confident long-term benefits from growth would be delivered.
"As the group moves into the 2018 financial year, we are continuing the strong momentum in our underlying performance,'' he said. "In July 2018, the group recorded its highest ever July revenue outcome and there is further positive momentum in forward bookings.''
"Based on current market conditions, group revenue for the first quarter of the 2019 financial year is expected to grow by at least 7 percent on the prior corresponding quarter.
"The group expects to be profitable at the underlying profit before tax and statutory levels in the first half of the financial year notwithstanding an expected fuel price increases (net of hedging and foreign exchange) of $A85 million.''
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