(Aug 29): Virgin Australia Holdings on Wednesday swung to an annual underlying profit, boosted by rising domestic demand, although the figure came in below market expectations.
Australia's No. 2 airline posted full-year underlying pretax profit, its most closely watched measure, of A$109.6 million ($80.2 million) in the 12 months ended June 30, compared to A$3.7 million loss for the prior year.
The figure was below an average estimate of A$113.5 million from four analysts surveyed by Thomson Reuters I/B/E/S.
Full-year revenue and income rose 7.4 percent to A$5.42 billion.
On a bottom line basis, Virgin reported a full-year loss attributable of A$681 million, wider than a A$220.3 million loss recorded for the previous fiscal year.
"The Group expects to be profitable at the Underlying Profit Before Tax and statutory levels in the first half of the 2019 financial year notwithstanding an expected fuel price increase (net of hedging and foreign exchange) of A$85 million," Chief Executive John Borghetti said in a statement.
Borghetti is scheduled to leave the firm by January 2020. A replacement has not yet been selected.
The airline said it has hedged 83 percent of its forecast fiscal 2019 fuel use at no worse than $60 per barrel (Brent equivalent) "to provide additional protection".
Jet fuel prices <JET-SIN> have risen about 41 percent in the 12 months to Tuesday.
The scrapping of plans in February to take the firm private has been a factor in Virgin's ASX-listed stock dipping about 10.7 percent this year.
Larger Australian rival Qantas Airways last week posted a record annual underlying profit before tax of A$1.6 billion, driven by the strong domestic market.