Merged: Virgin Blue Share Price - how low can it go and for how long?
Join Date: Aug 2007
Location: rice bowl
Posts: 113
Likes: 0
Received 0 Likes
on
0 Posts
what recession?
I guess BG whining about 'tough conditions' could be perceived as contradicting the bearded, grinning idiot. ie Recession, what recession? 
But wait, what about keeping the air fair?
But wait, what about keeping the air fair?
Join Date: Jan 2008
Location: australia
Age: 42
Posts: 39
Likes: 0
Received 0 Likes
on
0 Posts
Even with all the support @ 25c, VBA has made a new all time low currently 24c hate to see what it will go to when the support gives up and just lets the market have its way!
Join Date: Jan 2006
Location: Sydney
Posts: 191
Likes: 0
Received 0 Likes
on
0 Posts
400 jobs could go
http://www.asx.com.au/asxpdf/2009021...6bd7235l5g.pdf
Parking of 5 aircraft and reduciton in domestic flying of 8%
http://www.asx.com.au/asxpdf/2009021...6bd7235l5g.pdf
Parking of 5 aircraft and reduciton in domestic flying of 8%
Join Date: Jul 2007
Location: BAO
Posts: 0
Likes: 0
Received 0 Likes
on
0 Posts
Currently at 23 to 23.5 cents.
article ex the Courier Mail/AAP:
article ex the Courier Mail/AAP:
Virgin Blue posts $100m loss
Article from: AAP
February 23, 2009 10:05am
BUDGET airline Virgin Blue reported a first-half net loss of $101.4 million as the company took charges for investment in trans-Pacific partner V Australia and reversals of currency and fuel hedges.
The airline's net loss for the six months to December 31, 2008 compared with the net profit of $113.3 million reported for the same period the year before, the Brisbane-based company said in a statement on Monday.
Virgin said it won't pay a first-half dividend.
Revenue for the first half grew 12 per cent to $1.35 billion.
The bad news follows reports the Richard Branson-owned airline was to cut 400 jobs.
Article from: AAP
February 23, 2009 10:05am
BUDGET airline Virgin Blue reported a first-half net loss of $101.4 million as the company took charges for investment in trans-Pacific partner V Australia and reversals of currency and fuel hedges.
The airline's net loss for the six months to December 31, 2008 compared with the net profit of $113.3 million reported for the same period the year before, the Brisbane-based company said in a statement on Monday.
Virgin said it won't pay a first-half dividend.
Revenue for the first half grew 12 per cent to $1.35 billion.
The bad news follows reports the Richard Branson-owned airline was to cut 400 jobs.
The net loss reported is almost $4M per week over the half year to 31 Dec 2008. Back on 25 Oct 2008 I reported DJ lost $5+ for the whole of Sep 2008 and were on track to loosing more for Oct 2008. A few contributors such as 7378FE. porch monkey, OZangel and ANstar made a few comments at the time canning me. I guess there is no substitute for inside information and B... S... walks.
Join Date: Oct 2008
Location: Sydney
Posts: 76
Likes: 0
Received 0 Likes
on
0 Posts
Not good.
The real issue for VB at the moment is CASH.
Of the current 526 mil in cash, approximately 300 mil is not available to be spent as it is locked as cash reserves required by the groups financiers.
That leaves around 120 mil liquid cash reserves.
The total cash position decreased from 772 million to 526 million over the previous 12 months. This is a decrease of 246 million or 4.7 million per week.
If that rate of cash burn is maintained, there is only 26 weeks of operational cash remaining.
In addition to the current rate of cash burn, the debt position has worsened in the last 2 months and is set to deteriorate even further over the next 6-12 months. An additional 1.4 billion in debt will be added during this period.
The dry leasing cost for 1 x 777 is in the vicinity of $45000 per day. Each additional aircraft will be placing an increasing burden on an already depleted and decaying cash position.
Unless there is a dramatic about turn in passenger numbers and yield in the next 26 weeks, VB will either need to raise capital or take some other action to survive.
Of the current 526 mil in cash, approximately 300 mil is not available to be spent as it is locked as cash reserves required by the groups financiers.
That leaves around 120 mil liquid cash reserves.
The total cash position decreased from 772 million to 526 million over the previous 12 months. This is a decrease of 246 million or 4.7 million per week.
If that rate of cash burn is maintained, there is only 26 weeks of operational cash remaining.
In addition to the current rate of cash burn, the debt position has worsened in the last 2 months and is set to deteriorate even further over the next 6-12 months. An additional 1.4 billion in debt will be added during this period.
The dry leasing cost for 1 x 777 is in the vicinity of $45000 per day. Each additional aircraft will be placing an increasing burden on an already depleted and decaying cash position.
Unless there is a dramatic about turn in passenger numbers and yield in the next 26 weeks, VB will either need to raise capital or take some other action to survive.
tsalta - where does $772m figure come from ??? I thought the last reported cash reserves were just over $600m. and your maths does seem to be bit out!
$526m - $300m = $126m...hmmmm
Dry lease of a B777 at $45000 per day??? That equates to 13.5 million a month!!!!!
I think you are out by an order of magnitude at least!!
$526m - $300m = $126m...hmmmm
Dry lease of a B777 at $45000 per day??? That equates to 13.5 million a month!!!!!
I think you are out by an order of magnitude at least!!
Join Date: Feb 2009
Location: deutschland
Posts: 72
Likes: 0
Received 0 Likes
on
0 Posts
Slice -
The cash assets from the published reports FY 2007 was indeed 772 m.
The latest published cash position in the 6 months to 06/2008 was $ 603 m and the next 6 months to 12/2008 was $ 526 m. This is a decrease of $ 246 m over 78 weeks or approx. $ 3.5 m per week. Some of this is attributable to the 777 start up costs.
Cash security deposits for fleet financing are technically "untouchable" and effectively do have to come off the company's "spare" cash available. Any move to use these funds would be a breach of the leasing contracts. Would the lessor act ? - who knows.
IF the $ 45000 per day for 773 dry lease is correct, this amounts to $ 1.35 m per 30 day month. 3 aircraft is $ 4.05 m per 30 day month or approx $ 1.0 m per week
Anyway you look at it, Virgin Blue Holdings with 3 x 773 aircraft in it's fleet will suffer considerable losses that will have to be met using cash. It's debt position after 12 months will be significantly worse.
That is just not a position that lends itself to VBA surviving in its' current form. There will have to be some sort of cash injection.
The cash assets from the published reports FY 2007 was indeed 772 m.
The latest published cash position in the 6 months to 06/2008 was $ 603 m and the next 6 months to 12/2008 was $ 526 m. This is a decrease of $ 246 m over 78 weeks or approx. $ 3.5 m per week. Some of this is attributable to the 777 start up costs.
Cash security deposits for fleet financing are technically "untouchable" and effectively do have to come off the company's "spare" cash available. Any move to use these funds would be a breach of the leasing contracts. Would the lessor act ? - who knows.
IF the $ 45000 per day for 773 dry lease is correct, this amounts to $ 1.35 m per 30 day month. 3 aircraft is $ 4.05 m per 30 day month or approx $ 1.0 m per week
Anyway you look at it, Virgin Blue Holdings with 3 x 773 aircraft in it's fleet will suffer considerable losses that will have to be met using cash. It's debt position after 12 months will be significantly worse.
That is just not a position that lends itself to VBA surviving in its' current form. There will have to be some sort of cash injection.
Join Date: Oct 2008
Location: Sydney
Posts: 76
Likes: 0
Received 0 Likes
on
0 Posts
Not good.
Con Catenator,
Pretty much correct mate however:
The reported cash position at 31 Dec 07 was 771 million.
The reported cash position at 31 Dec 08 was 526 million.
The reserved cash as required by the leasing agreements is 300 million.
The reserved cash is locked by the leasing covenant and is not able to be spent.
526 million less 300 million = 126 million.
The cash burn is over the 52 week calendar year 08 and is 4.7 million per week.
Slice,
Take your shoes off and do the math again.
Given the poor credit rating of VB, it is likely the leasing cost is higher. I obtained the figure from a research paper of an MBA grad.
Pretty much correct mate however:
The reported cash position at 31 Dec 07 was 771 million.
The reported cash position at 31 Dec 08 was 526 million.
The reserved cash as required by the leasing agreements is 300 million.
The reserved cash is locked by the leasing covenant and is not able to be spent.
526 million less 300 million = 126 million.
The cash burn is over the 52 week calendar year 08 and is 4.7 million per week.
Slice,
Take your shoes off and do the math again.
Given the poor credit rating of VB, it is likely the leasing cost is higher. I obtained the figure from a research paper of an MBA grad.
Last edited by tsalta; 24th Feb 2009 at 01:18. Reason: grammar
Join Date: Nov 2006
Location: Sydney
Posts: 159
Likes: 0
Received 0 Likes
on
0 Posts
tsalta
Slow down take a deep breath and recheck your maths you are beginning to embarrass yourself.
Where do you get the information that the Lease facilities have a cash coverage componenet
Slow down take a deep breath and recheck your maths you are beginning to embarrass yourself.
Where do you get the information that the Lease facilities have a cash coverage componenet
Join Date: Oct 2008
Location: Sydney
Posts: 76
Likes: 0
Received 0 Likes
on
0 Posts
Along with a whole boat load of other really interesting information, you will find the restricted cash detailed in the notes to the annual financial accounts.
The notes are where you will find all the good stuff they are trying to bury.
As of Jun 30 2008 the restricted cash was 201.5 million. With the addition of debt since, the restricted cash is now set at approximately 300 million and will climb further in the next 6 months.
Me embarrassed? Yes, I can't seem to drive the calculator.
Make that 526 - 300 = 226 or 48 weeks at the current cash burn. My bad.
Still not a flash position for VB.
tsalta
The notes are where you will find all the good stuff they are trying to bury.
As of Jun 30 2008 the restricted cash was 201.5 million. With the addition of debt since, the restricted cash is now set at approximately 300 million and will climb further in the next 6 months.
Me embarrassed? Yes, I can't seem to drive the calculator.
Make that 526 - 300 = 226 or 48 weeks at the current cash burn. My bad.
Still not a flash position for VB.
tsalta
Last edited by tsalta; 24th Feb 2009 at 01:52. Reason: clarity and I'm stoopid
It may not be a good position, but only assuming they do nothing. As Godfrey said, they're taking steps to hoard cash over the next 2 years which is what they've built as their expected time until the market heads north again. I take that to mean that they'll take the measures necessary, such as cutting capacity (as already foreshadowed) and managing the workforce to cut the expenditure as needed.
But, hey I guess time will tell
But, hey I guess time will tell
Join Date: Oct 2008
Location: Sydney
Posts: 76
Likes: 0
Received 0 Likes
on
0 Posts
Hi EBT,
Sure, if they manage to change enough to escape then great. However, what concerns me is where they are taking action to exacerbate the situation, i.e. VA.
Anyone giving the results more than a cursory glance will see how they have tried to use the results delivery and presentation prose to make the results seem better than they are.
No one could foresee what is happening now financially. What was initially a great move is now going to cost dearly.
My main fear is from about mid year, the real financial pain will begin and what little profit is generated domestically will evaporate.
If that happens, then VA will be the Kryptonite necklace around VB's neck.
I look forward to being proven wrong (and that is often the case) but I believe that VB in their current form are VSF.
tsalta
Sure, if they manage to change enough to escape then great. However, what concerns me is where they are taking action to exacerbate the situation, i.e. VA.
Anyone giving the results more than a cursory glance will see how they have tried to use the results delivery and presentation prose to make the results seem better than they are.
No one could foresee what is happening now financially. What was initially a great move is now going to cost dearly.
My main fear is from about mid year, the real financial pain will begin and what little profit is generated domestically will evaporate.
If that happens, then VA will be the Kryptonite necklace around VB's neck.
I look forward to being proven wrong (and that is often the case) but I believe that VB in their current form are VSF.
tsalta
Join Date: Sep 2005
Location: australia
Age: 59
Posts: 425
Likes: 0
Received 0 Likes
on
0 Posts
va is not vb. vb will have a cash burn max. when or if it is reached va, a separate company with separate debts/assets it would be cut loose, i.e. wound up or sold (singapore !!!). vb will still exist buts its image somewhat tarnished
Join Date: Oct 2008
Location: Sydney
Posts: 76
Likes: 0
Received 0 Likes
on
0 Posts
deluded
Dude,
if you think that is the case..................good luck to you.
VB is VA.
VA is VB.
end of story.
There is no separation, they are cross colatoralised.
VA's assets are secured by VB's.
Think about it. If you were a lender, and going to extend a startup organisation 300m for a plane, wouldn't you want some more security other than the plane which is now only worth 250m because it is second hand?
The basic sniff test always works in the end.
tsalta
if you think that is the case..................good luck to you.
VB is VA.
VA is VB.
end of story.
There is no separation, they are cross colatoralised.
VA's assets are secured by VB's.
Think about it. If you were a lender, and going to extend a startup organisation 300m for a plane, wouldn't you want some more security other than the plane which is now only worth 250m because it is second hand?
The basic sniff test always works in the end.
tsalta
indamiddle
va, a separate company with separate debts/assets it would be cut loose, i.e. wound up or sold (singapore !!!).
va, a separate company with separate debts/assets it would be cut loose, i.e. wound up or sold (singapore !!!).