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Virgin Australia flags H1 profit rise

Stuart Condie
Virgin Australia expects to lift first-half underlying profit at least 22 per cent to $100m

Virgin Australia expects to lift first-half underlying pre-tax profit at least 22 per cent to about $100 million after a jump in first-quarter revenue.

The airline says revenue for the three months to September 30 rose 9.7 per cent on the prior corresponding quarter, well above its 7.0 per cent guidance.

In a brief trading update published on Monday, Virgin Australia said current booking trends and a strong domestic performance suggest second-quarter revenue will rise another 10 per cent.

Virgin Australia swung to an underlying profit before tax of $109.6 million in the last full financial year, but reported a sixth consecutive statutory loss of $681 million after impairments and tax adjustments.

Its statutory profit was hit by a $120 million impairment of its international business assets and deferred tax accounting write-offs for $451.9 million.

Virgin Australia's international business was buffeted by higher fuel prices, Bali's volcanic activity in late 2017 and its investment in Hong Kong services.

It said on Monday its first-half guidance was inclusive of an estimated year-on-year fuel price increase of $88 million, compared to the $85 million it flagged in August.

Virgin Australia shares were valued at 20.5 cents before the market opened, down about 60 per cent in the past three years.