Virgin Australia Holdings Ltd's (ASX: VAH) share price is down 4% to 24c per share at the time of writing after the airline posted its FY18 results today.
Virgin booked a $653.3 million statutory loss after tax for FY18, with write downs and restructuring changes costing the airline dearly, with it racking up its sixth year of consecutive losses.
On an underlying basis Virgin Australia has reported a $109 million profit before tax – an improvement of $113 million on last year's loss of $3.7 million – with an uptick in revenue of 7.4%.
However, as this is Virgin's highest underlying profit before tax since FY08 and with an 108.3% increase in operating cash flow from FY17 to FY18, you can assume things are generally heading in the right direction.
The rest of Virgin's financials look fairly solid.
Virgin's core domestic business has reported record earnings – and as this segment accounts for two thirds of Virgin's revenue base, this is a definite silver lining.
Virgin's cash flow also stood up against the odds in FY18, with significant investments over the period, including more than $200 million in five Boeing 737-NG aircraft and fuel costs and price war headwinds as usual.
According to the results, Virgin's on track to deliver $400 million in annualised net cash flow savings – up from a previous target of $350 million.
Virgin also expects positive momentum in forward bookings as it leverages off its highest ever July revenue outcome with group revenue in the first quarter of FY19 forecast to grow by 7% or more.
Virgin Australia CEO John Borghetti said the statutory loss was impacted by "major accounting adjustments" with restructuring charges amounting to $148.5 million as the group works on "transforming product" to pursue initiatives in Asia and other loyalty markets.
Borghetti said Virgin will remain "prudent" in light of industry-wide fuel price increases and will take a "disciplined approach" to capital expenditure.
Virgin Australia did not declare a final dividend,
Industry peer Qantas Airways Limited (ASX: QAN) was named among the world's 20 safest airlines in 2018 according to an article in the Financial Review today.
According to the article, Qantas and Virgin Australia both featured in the Top 20.
Elsewhere in the sector Sydney Airport Holdings Pty Ltd (ASX: SYD) shares are slightly in the red today after the company released its half-year 2018 results last week highlighting a 7.9% increase in revenue, EBITDA up by 8% and passenger growth of 3.3%.
