Hit by carbon tax of A$24.4million, Virgin Australia’s net profit dropped by 56% to A$23 million ($23.5 million) during the first-half FY2012/13 ending Dec. 31, 2012. Profit before tax was down 36.5% to A$61 million.
CEO John Borghetti says the decline was due to “the introduction of the carbon tax, the cost of which we were unable to recover due to aggressive competition in the market.”
Revenue rose 5.4% during the period, however, and the airline carried the highest number of passengers recorded in any half year period. Numbers rose 200,000 to exceed 10 million.
“We have made significant progress on our three-year business efficiency program designed to ensure we have a sustainable cost advantage now and in the future. Over the half, the project has delivered sustainable efficiency gains of A$25 million and we are on track to deliver over A$60 million by the end of the financial year,” Borghetti said.
“The Group has delivered a solid result in a difficult operating and economic environment, reflecting the significant progress we have made in diversifying our revenue base and improving cost control,” Borghetti said. However, he warned the continuing uncertain economic and competitive environment—and the need to support current and future strategic initiatives—meant the airline would not be declaring a dividend and would do so only when conditions were “appropriate.”
The challenging economic environment also “precludes us from providing a profit guidance for the year,” Borghetti said.
Half year net profit down for Virgin Australia
