Virgin swings to full-year loss

Airline declines to offer guidance for year ahead due to uncertain economic environment, pays no final dividend.

Virgin Australia Holdings (VAH) has declined to provided financial guidance for the year ahead, saying the uncertain economic environment did not allow it to do so, after swinging to a full-year loss.

In the year to June 30, Virgin posted a net loss of $98.1 million, a steep decline on the $22.8 million profit recorded in the previous year.

The loss was in line with its guidance issued earlier in August for a net loss of between $95 million and $100 million.

In the same period revenue was $3.99 billion, a 1.9% increase on the $3.91 billion in 2012.

Virgin said a number of factors impacted its performance in fiscal 2013, including "difficult economic and competitive environment", significant one-off pre-tax restructuring and transformation costs and the carbon tax.

Virgin chief executive John Borghetti said the airline said it incurred $105.1 million of significant one-off pre-tax costs from its restructuring and transformation program.

"Other one-off restructuring and transformation costs include the restructure costs associated with the Skywest and Tigerair Australia transactions, the integration of Skywest and business transformation initiatives, totalling $17.3 million," Mr Borghetti said.

"The business also incurred $6.3 million of costs associated with accelerated depreciation on legacy assets."

The group declined to pay a final dividend.

In a separate release, Virgin said it had secured commitments for new unsecured term loan facilities from its major shareholders Air New Zealand, Etihad Airways and Singapore Airlines, as part of a program to further supplement and diversify its liquidity position.

"The facilities are for an aggregate amount of $90 million with pro rata contributions from each shareholder based on their current relevant interest," Virgin said.

Mr Borghetti was reticent to offer much guidance for the year ahead, saying only: “the 2014 financial year represents the fourth year of our five-year Game Change Program strategy in which we will focus on consolidating our market positioning in order to drive earnings growth."

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