VIRGIN FLAGS BIG NET LOSS

Written on the 6 February 2014

VIRGIN FLAGS BIG NET LOSS

VIRGIN Australia (ASX:VAH) has flagged a forecast loss before tax of $49 million for the FY14 half year in response to an ASX price query.

The ASX sent the price query after VAH dropped 8 cents to $0.28 per share on February 5.

The company says it has it had no unannounced information which could have caused the price tumble, but notes analysts have released their own reports estimating the $49 million loss and VAH expects this to be correct.

“The median forecast for all covering broker analysts who have published 2014 Half Year forecasts is a loss before tax (LBT) of $49 million,” says company secretary Adam Thatcher.

“VAH expects that its LBT for the 2014 Half Year (excluding share of Tigerair losses and other one-off restructuring costs) will be materially in line with the median forecast for all covering broker analysts of a $49 million LBT.”

The company also noted the other factors which could have influenced trading on February 5, including:

- The volatility in worldwide markets over the last 48 hours may have had a flow on impact on local markets, with a trend for selling down cyclical stocks.

- The Australian listed aviation sector over the last 48 hours has seen significant volatility and price declines, including our major competitor which has also experienced a material decrease in its share price (down 5.1%).

- Confusion caused by the announcement by Virgin Atlantic that it intends to withdraw operations between Sydney and Hong Kong from May 2014, citing increasing costs and a challenging economic environment.

VAH shares rebounded to $0.327 today, up 3.81 per cent.


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