SYDNEY, Australia — Virgin Blue Holdings Ltd. said Wednesday that net profit for the six months to Dec. 31 fell 8.8 percent to 113.3 million Australian dollars (US$104.2 million; euro70.8 million), crimped by costs associated with new airline initiatives.
Net profit for the Australian branch of British mogul Richard Branson’s budget airline for the same period a year earlier had been A$124.3 million.
Revenue for the six months increased by 8.1 percent to A$1.21 billion (US$1.11 billion; euro756 million), from A$1.11 billion. The airline said it will pay an interim dividend of 2 Australian cents per share on March 28, same as the previous year.
“The result was achieved against a backdrop of record fuel costs, aggressive competition and a period in which we continued to invest in major initiatives to add long-term future value,” Chief Executive Brett Godfrey said in a statement.
Godfrey did not give any specific earnings guidance for 2008 but he said the second half of the year was likely to be tough.
Virgin Blue’s share price slumped more than 10 percent to close at A$1.325 after touching a record low of A$1.26 during the session.
The carrier, which is Australia’s second largest by market capitalization and passenger numbers behind Qantas Airways Ltd., operates a fleet of Boeing 737 and Embraer jet aircraft on domestic and South Pacific routes.
The airline also hopes to begin flights to the United States by the end of this year with the launch its new V Australia long haul international airline.
Underlying net profit after tax increased 7.6 percent to A$135.1 million (US$124.3 million; euro84.4 million) prior to one-off spending after tax of A$21.8 million (US$20.1 million; euro13.6 million) associated with business expansion initiatives, including the installation of premium economy seating, the Embraer fleet rollout and the implementation of V Australia.