Virgin Australia is proposing to split the company into domestic and international businesses, a move which clearly sets it up for an investment by Etihad Airways.
Virgin Australia to split company, made more ‘real’ money than Qantas in first half
It has also reported a statutory net profit after tax of $51.8 million, meaning that as a much smaller airline, it nevertheless made more ‘real’ money, in statutory terms, than the entire Qantas group, which reported a net profit after tax of $42 million for the same period.
These are the headline financial results filed with the ASX.
Financial highlights • Improvement in statutory NPAT1, +118% to $51.8m • Improvement in underlying PBT2, +34.4% increase to $96.1m despite fuel cost increases • Strong revenue growth +18.4% to $2,006.4m • Early upside from product and services, and international alliances driving network yield +11.5% • Strong domestic yield growth +13.7% • Costs well managed with underlying CASK3 (excl fuel) +4.7% (incl significant product enhancements) • 10% improvement in operating margins • Strengthened cash position with $506m in unrestricted cash, total cash balance of $851m
The proposed restructuring depends on the approval of a special distribution of new shares to existing shareholders and will not affect employees or customers in any material way.
VAH Price at posting:
36.5¢ Sentiment: LT Buy Disclosure: Held