26-Aug-2010 11:33 AM

Virgin Blue back in the black in FY2010, V Australia expects break-even FY2011

Virgin Blue revenue up 13.1% - financial/traffic highlights for the 12 months ended 30-Jun-2010:

  • Total revenue*: USD2,622 million, +13.1% year-on-year;
    • Short-haul: USD2,373 million, +4.3%;
    • V Australia: USD285.3 million, n/a;
  • Operating costs: USD2,547 million, +10.5%;
    • Fuel: USD688.2 million, +4.4%;
    • Labour: USD562.9 million, +7.5%;
  • Underlying EBIT (loss)**: USD76.5 million, +521.4%;
    • Short-haul: USD112.3 million, +88.2%;
    • V Australia: (USD37.7 million), compared with a loss of USD61.6 million in p-c-p;;
  • Profit before tax: USD30.2 million, compared with a loss of USD199.0 million in p-c-p;
  • Passenger traffic (RPKs): +23.4%;
  • Passenger load factor: 79.8%, +0.7 ppt;
    • Short-haul: 79.8%, +0.6 ppt;
    • V Australia: 80.1%, n/a;
  • Yield: USD 8.85 cents, -7.1%;
    • Short-haul: +2.9%;
    • V Australia: +4.8%;
  • Underlying** cost per ASK: USD 7.49 cents, -7.7%;
    • Short-haul: -2.7%;
  • Underlying** cost per ASK excl fuel: -1.9%;
    • Short-haul: -2.7%;
  • Total assets: USD3,407 million, +15.0%;
  • Cash and cash equivalents: USD716.8 million, +71.2%;
  • Total liabilities: USD2,586 million, +5.3%;
  • Operating cash flow: USD324.9 million, +265.5%. [more]

*Based on the average conversion rate at USD1 = AUD1.13652 during the reporting period
**Excludes ineffective cash flow hedges and non designated derivatives, V Australia start-up costs and profit/loss on disposal of property plant and equipment

Virgin Blue: “The outlook for V Australia is encouraging following the network review, with aircraft redeployed to higher yielding long-haul routes. In addition, the second phase of the network review will involve V Australia withdrawing from Fiji, South Africa and Phuket; routes which are not profitable and which, strategically, don’t integrate well into, or service, our domestic network,” Company statement. Source: Virgin Blue, 26-Aug-2010.

Virgin Blue: “Despite poor market conditions through to the third quarter, the Asia Pacific region led the first signs of recovery in the fourth quarter. However, conditions continue to be volatile and competitive activity continues to put downward pressure on yields. The soft growth seen at the end of the fiscal year, at this stage, is not sufficient to suggest a consistent across-the-board improvement in market conditions,” Company statement. Source: Virgin Blue, 26-Aug-2010.

Virgin Blue: “If market conditions continue to be volatile, and the early signs of recovery seen at the end of fiscal year 2010 do not result in a consistent and sustainable upward trend, we do have flexibility to adjust capacity through lease returns and rescheduling of aircraft deliveries,” John Borghetti, Chief Executive Officer and Managing Director. Source: Virgin Blue, 26-Aug-2010.

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