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Vietjet reports VND274 billion of after-tax profit in Q4, making profits in 2020

February 2, 2021 Financial No Comments

Vietjet Aviation Joint Stock Company (HOSE: VJC) has released its financial statements reporting VND4,430 billion (approx. US$192 million) of consolidated revenue in the fourth quarter of 2020 and a total of VND18,210 billion (approx. US$790 million) of consolidated revenue in 2020.

After-tax profit of Vietjet’s parent company was VND274 billion (approx. US$11.9 million) in Q4/2020 while its consolidated after-tax profit reached VND995 billion (approx. US$43 million). In 2020, Vietjet recorded a consolidated after-tax profit of VND70 billion (approx. US$3 million), making it one of the few airlines in the world to have no staff reduction and still make profits.

According to the statement, ancillary revenue accounted for nearly 50% of the airline’s total revenue, showcasing Vietjet’s ability to promote ancillary services to offset decreasing air travel revenue.

Vietjet’s total assets reached VND47,036 billion (approx. US$2 billion) while its owner equity was at VND17,326 billion (approx. US$746.2 million) including treasury shares.  Its debt-to-equity ratio stayed at as low as 0.66 while the liquidity ratio remained at 1.2, which is considered good performance given the current aviation industry’s situation.

Last year, Vietjet converted some of its passenger aircraft for freight transportation purpose while applying new operational methods to strengthen its cargo service capacity. The airline was the first airline in Vietnam being approved to deploy cargo operations in the passenger cabin (CIPC). It has since delivered more than 60,000 tons of cargo internationally, seeing its freight revenue leaping by 75% in Q4/2020 year-on-year. In 2020, 16% of air cargo growth was recorded. Through interline agreements, Vietjet’s cargo also landed in America and Europe for the first time, which were initially on hold for future plans.

Thanks to its outstanding cargo transportation performance, Vietjet has won the “Belly carrier of the year” and the “Low-cost carrier of the year” awards by cargo magazine Payload Asia.

In 2020, Vietjet also marked a milestone by launching Vietjet Ground Services Center (VJGS) at Noi Bai International Airport (Hanoi), which has helped the airline better manage its operating costs while improving the brand recognition and service quality.

The airline has also introduced a series of new products and services to improve the convenience for passengers, which includes the unlimited Power Pass, the upgraded Power Pass Skyboss or SkyBoss and Deluxe classes with better flying privileges.

Vietjet has made drastic cuts to operating expenses by optimizing fleet operations with a 10% cost reduction, negotiating a 20%-25% discounts with suppliers while bringing down at least 10% of daily operating costs. The airline also successfully hedged jet fuel in May 2020, helping to save 25% of fuel costs compared to buying at the market price.

Vietjet has decided to transfer its investment portfolio and a number of assets accumulated beforehand to gather capital and cash and nurture its resources for a strong recovery once the aviation industry bounces back.

The airline has conducted 78,462 flights with 120,093 safe flight hours, flying more than 15 million passengers last year. Vietjet has strictly abided the disease prevention regulations of the WHO and the authorities, all of which made Vietjet’s employees and passengers safe in 2020.

Vietjet has also reported positive operating indexes last year, for example where its load factor was at over 80% while on-time performance rate stayed at 90%, one of the highest in the world. Vietjet’s technical reliability rate stood at 99.64% and received the highest safety ranking of 7 stars. It was also listed in the top 10 safest and best low-cost airlines in the world in 2020 by Airlineratings.

Apart from commercial activities, Vietjet has participated in several charity activities to support its passengers and the community, spreading the ‘living well, living nicely’ spirit of Vietjet people to the community. Vietjet President and CEO Nguyen Thi Phuong Thao has been honored as one of the top 110 figures in Asia in terms of philanthropic activities by Tatler publications.

Vietjet has so far resumed its entire domestic network of more than 47 routes. The airline has received support from the Government for tax discounts, tax-payment extensions and reductions in landing/take-off fee, ground services fee and air control fee, and is being considered for the government’s financial aid proposal for local airlines. Taking those into account, Vietjet, with its outstanding cost and operation management while leading innovation in the industry, is deemed strong enough to bounce back in 2021, bringing flying opportunity at flexible but low prices and diverse services to the customers.

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