VS would look better if their chaps could be a little less perfidious - or at least don't get caught.
Chief financial officer Keith Williams has laid bare Virgin Atlantic’s financial results in his BA News weekly column, saying the results were not as spectacular as they might seem.
Keith writes: “Since Virgin Atlantic is a private company, it enjoys the luxury of limited disclosure, so tells us only what it wants. But because the airline is 49 per cent owned by Singapore Airlines – which, as a publicly listed company, has to use international financial reporting standards – we get a much clearer picture.”
According to Chan Hon Chew, senior vice-president finance at Singapore, the group’s fourth quarter losses of £45.9m “largely” come from its share of losses at Virgin. And Keith writes: “It was pleasing that yesterday’s broadsheet media identified this lurch into Virgin accounting territory.
“When we look at the figures, Virgin’s profit is attributable to one accounting item. They bought some dollars last year to cover off the dollar expenses that they will incur this year. Given that the dollar strengthened, they booked this as operating profit – £68m out of the total £68.4m profit.
“At February 2009 – Virgin’s accounting date – it was only a paper profit.
Whether it turns out to be a real profit or not will depend on the dollar rate when the expenses are incurred. And given the recent weakening of the dollar, it may have largely reversed this year.
“If we remove the profit they made on currency exchange, Virgin actually broke even during the 12-month period, and on the same basis made a loss of £42m at the operating level on turnover of £2578m – an operating margin of minus 1.6 per cent.”
Pretty much supporting Da Dog's quotation.