Virgin Australia Holdings Ltd (ASX: VAH) lost $21 million in the six months to 31 December 2016.
This morning, the Australian airline operator updated the market on its six-month financial performance.
Here are the key stats:
- Revenue fell 0.9% to $2.63 billion
- A loss of $21.5 million was reported, down from a $62.5 million profit last year
- It has net debt of $936 million
- A cash balance of $1.6 billion; and
- 7 million Velocity members
The company mentioned the word "underlying" 28 times in its 8-page media release.
For example, underlying 'profit' was $42.3 million during the period according to Virgin, but it actually reported a $21.5 million loss.
So what does 'underlying' mean? Well, according to Virgin, underlying excludes tax, impairment losses on assets, onerous contract expenses, business and transactions costs, profits/loss from entities invested in the company and hedging.
Some of the exclusions may be acceptable, but it makes it really difficult to understand what is going on, in my opinion.
Results
Virgin's loss appears to have resulted from increased aircraft lease costs and charges, maintenance and other expenses.
"Notwithstanding continued subdued trading conditions in the domestic market, the Group has strengthened its liquidity and cash position and is ahead of schedule in the implementation of the Better Business program," Virgin CEO John Borghetti said.
Looking ahead, Virgin is focused on shoring up its balance sheet and cutting costs.
"Due to uncertainty in external market conditions, we are unable to provide further guidance at this time," Mr Borghetti added.
Should you buy Virgin Australia shares?
I'll hand this one over to Richard Branson, the founder of Virgin:
"If you want to be a Millionaire, start with a billion dollars and launch a new airline."
Specifically, should you buy Virgin shares?
Only if you like to lose money, in my opinion.
