3rd Quarter Results-Third Quarterly Report 2014

RNS Number : 5575V

Air China Ld

29 October 2014

 



Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

Air China Limited

(a joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 00753)

THIRD QUARTERLY REPOPT 2014

This announcement is made pursuant to Rule 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

The board of directors (the "Board") of Air China Limited (the "Company") hereby announces that a meeting of the Board was held on 28 October 2014 and the Board, among others, passed the resolution approving the quarterly report of the Company for the third quarter of 2014 prepared in accordance with the PRC Accounting Standards.

1.      IMPORTANT NOTICE

1.1      The Board, the supervisory committee, as well as the directors, supervisors and senior management of the Company hereby warrant that the contents of this quarterly report are true, accurate and complete and there are no false representations, misleading statements or material omissions in this report, and jointly and severally accept full legal responsibility for this report.

1.2      Directors' absence from the meeting

Name of absent director		Position of absent director		Reason(s) for absence		Name of proxy
Fan Cheng		Director		Business engagement		Song Zhiyong

1.3      Cai Jianjiang (legal representative of the Company), Xiao Feng (person in charge of accounting function), and Zhan Zhong (person in charge of accounting department (accounting superintendent)) hereby declare that the financial statements set out in this quarterly report are true, accurate and complete.

1.4      The financial statements set out in the third quarterly report of the Company are not audited.

2.      MAJOR FINANCIAL DATA OF THE COMPANY AND CHANGES IN SHAREHOLDERS

2.1      Major financial data

Unit: RMB'000

		At the end of the reporting period		At the end of the previous year		Increase/decrease at the end of the reporting period as compared to the end of the previous year
						(%)
Total assets		207,714,699		205,361,883		1.15
Net asset attributable to shareholders  of the listed company		56,519,763		54,154,190		4.37

		For the period from the beginning of the year to the end of the reporting period (January to September)		For the  corresponding period of the previous year  (January to September)		Increase/ decrease as compared to the corresponding period of the previous year
						(%)
Net cash flows from operating activities		14,729,780		14,607,638		0.84
Revenue		78,911,498		73,786,988		6.95
Net profit attributable to shareholders of the listed company		3,157,021		4,061,019		-22.26
Net profit attributable to shareholders of the listed company after deducting non-recurring profits and losses		2,597,360		3,810,504		-31.84
Weighted average return on net assets (%)		5.69		7.68		Decreased by  1.99 ppt
Basic earnings per share (RMB)		0.26		0.33		-21.21
Diluted earnings per share (RMB)		N/A		N/A		N/A

Non-recurring profits and losses:

Unit: RMB'000

		Amounts for the period (July to September)		From the beginning  of the year  to the end of the reporting period (January to September)		Remarks
Items
Gains/(losses) from disposal of non-current assets		-30,428		-45,734
Government grants included in the profits and losses for the current period (except for those that are closely related  to the Company's normal operating business and qualified under national policy to continually receive certain standard amount and quantities)		68,069		886,038
Gain/(loss) from changes in fair value of financial assets/liabilities held for trading and investment gains from disposal of financial assets/ liabilities held for trading and available-for-sale financial assets (except for hedging activities related to the Company's normal operating business)		4,481		2,986
Reversal of provision for impairment of receivables which are individually tested for impairment		111,502		112,072
Other non-operating income and expenses not covered above		9,538		34,456
Effect of income tax		-11,932		-219,068
Effect on minority interest (after tax)		-73,666		-211,089
Total		77,564		559,661

2.2 Total number of shareholders, the top 10 shareholders and the top 10 shareholders not subject to selling restrictions as at the end of the reporting period

Total number of shareholders

265,373 (including 4,384 registered  H Share shareholders)

Particulars of the top 10 shareholdersUnit: share

Name of shareholder  (full name)	Changes during the reporting period	Shares held at the end of period	Shareholding percentage (%)	Shares held subject to selling restrictions	Shares pledged or frozen		Nature of shareholder
					Status	Number
China National Aviation Holding   Company	0	5,427,546,093	41.48	192,796,331	Frozen	127,445,536	State
Cathay Pacific Airways Limited	0	2,633,725,455	20.13	0	Nil		Foreign legal person
HKSCC NOMINEES LIMITED	427,900	1,678,009,975	12.82	0	Unknown		Foreign legal person
China National Aviation Corporation (Group) Limited	0	1,556,334,920	11.89	0	Frozen	36,454,464	Foreign legal person
China National Aviation Fuel Group      Corporation	0	86,300,000	0.66	0	Unknown		State-owned legal   person
Sinotrans Air Transportation   Development Co., Ltd.	0	75,800,000	0.58	0	Unknown		State-owned legal   person
New China Life Insurance Company   Ltd. - Bonus - Personal   Bonus - 018L - FH002 Shanghai	-5,716,419	62,661,799	0.48	0	Unknown		Unknown
Agricultural Bank of China -   Baoying Strategic Growth Stock   Securities Investment Fund	40,000,000	40,000,000	0.31	0	Unknown		Unknown
Bank of China Limited - Harvest   Research Selected Equity Fund	39,165,045	39,165,045	0.30	0	Unknown		Unknown
Bank of China Limited - Baoying   Core Competence Flexible   Allocation Balanced Securities   Investment Fund	20,000,000	20,000,000	0.15	0	Unknown		Unknown

Particulars of the top 10 shareholders not subject to selling restrictions

Name of shareholder of shares	Number of tradable shares held not subject to selling restrictions		Class and number
			Class	Number
China National Aviation Holding Company	5,234,749,762		RMB ordinary shares	5,234,749,762
Cathay Pacific Airways Limited	2,633,725,455		Overseas listed foreign shares	2,633,725,455
HKSCC NOMINEES LIMITED	1,678,009,975		Overseas listed foreign shares	1,678,009,975
China National Aviation Corporation    (Group) Limited	1,556,334,920		RMB ordinary shares	1,332,482,920
			Overseas listed foreign shares	223,852,000
China National Aviation Fuel Group Corporation	86,300,000		RMB ordinary shares	86,300,000
Sinotrans Air Transportation Development Co., Ltd.	75,800,000		RMB ordinary shares	75,800,000
New China Life Insurance Company Ltd. - Bonus - Personal Bonus - 018L - FH002 Shanghai	62,661,799		RMB ordinary shares	62,661,799
Agricultural Bank of China - Baoying Strategic Growth Stock Securities Investment Fund	40,000,000		RMB ordinary shares	40,000,000
Bank of China Limited - Harvest Research Selected Equity Fund	39,165,045		RMB ordinary shares	39,165,045
Bank of China Limited - Baoying Core Competence Flexible Allocation Balanced Securities Investment Fund	20,000,000		RMB ordinary shares	20,000,000
Explanations on connected relationship or action in concert among the above shareholders	China National Aviation Corporation (Group) Limited is a wholly-owned subsidiary of China National Aviation Holding Company. Accordingly, China National Aviation Holding Company is directly and indirectly interested in 53.37% shares of the Company.

Notes:

1.      HKSCC NOMINEES LIMITED is a subsidiary of The Stock Exchange of Hong Kong Limited and its principal business is acting as nominee for and on behalf of other corporate shareholders or individual shareholders. The 1,678,009,975 H Shares held by it in the Company does not include the 166,852,000 Shares held by it as nominee of China National Aviation Corporation (Group) Limited.

2.      According to the "Implementation Measures on Partial Transfer of State-owned Shares to the National Social Security Fund in the Domestic Securities Market" (Cai Qi [2009] No. 94) (《境內證券市場轉持部分國有股充實全國社會保障基金實施辦 法》(財企[2009]94號)) and the Notice ([2009] No. 63) jointly issued by the Ministry of Finance, the State-owned Assets Supervision and Administration Commission of the State Council, China Securities Regulatory Commission and the National Council for Social Security Fund, 127,445,536 shares and 36,454,464 shares held by China National Aviation Holding Company and China National Aviation Corporation (Group) Limited respectively, the controlling shareholder of the Company, are frozen at present.

3.      SIGNIFICANT EVENTS

3.1      Particulars of, and reasons for, significant changes in major items in the accounting statements and key financial indicators of the Company

√ Applicable □ Not applicable

The total profit of the Group for the period from January to September in 2014 was RMB4.275 billion, representing a decrease of 24.48% as compared to the corresponding period of the previous year; net profit attributable to the shareholders of the listed company was RMB3.157 billion, representing a decrease of 22.26% as compared to the corresponding period of the previous year. The decrease in both total profit of the Group and net profit attributable to the shareholders of the listed company was mainly due to net foreign exchange losses arising from the depreciation of RMB, resulting in a decrease of profit by RMB2.267 billion as compared to the corresponding period of the previous year. During the reporting period, operating profit after deducting foreign exchange gains and losses increased by RMB410 million as compared to the corresponding period of the previous year, mainly due to the combined effects of improved utilization efficiency of transportation capacity, as well as lower fuel price as compared to that of the corresponding period of the previous year.

Unit: RMB'000

Items in consolidated balance sheet		As of  30 September 2014		As of  31 December 2013 (Adjusted)		Amount of Change		Percentage		Reasons for Change
Cash and bank balances		10,588,476		15,507,677		-4,919,201		-31.72%		Mainly due to more repayments of debts due for repayment financed by the Group's own funds during the reporting period.
Prepayments		951,694		679,962		271,732		39.96%		Mainly due to the increase in jet fuel prepayments and aircraft lease prepayments under operating lease.
Non-current assets held for sale		233,418		994,413		-760,995		-76.53%		Mainly due to the decrease in the number of aircraft held for sale as at the end of the reporting period.
Other current assets		2,292,316		1,236,939		1,055,377		85.32%		Mainly due to the increase in deductible input VAT as at the end of the reporting period.
Available-for- sale financial assets		162,387		47,968		114,419		238.53%		Mainly due to the change in the fair value of available-for-sale financial assets during the reporting period.
Short-term bonds payable				700,000		-700,000		-100.00%		Repayment of short-term commercial papers of RMB700 million during the reporting period.
Bills payable		441,234				441,234		100.00%		Increase in settlement by bills payable during the period.
Taxes payable		937,477		711,649		225,828		31.73%		Mainly due to the increase in enterprise income tax payable by the parent company.
Non-current liabilities due within one year		13,112,926		20,507,235		-7,394,309		-36.06%		Mainly due to the decrease in long-term borrowings due within one year.
Long-term borrowings		30,344,571		23,266,406		7,078,165		30.42%		Mainly due to certain new long- term borrowings raised under the capital expenditure scheme and financing scheme of the Company.

Items in consolidated income statement		For the period from the beginning of the year to the end of the reporting period		For the corresponding period of the previous year		Amount of Change		Percentage		Reasons for Change
Business taxes and other levies		141,343		258,278		-116,935		-45.27%		Mainly due to timing differences for the implementation of value-added tax to replace business tax in various regions leading to different taxation policies as compared to the corresponding period of the previous year.
Finance expenses		3,020,576		498,895		2,521,681		505.45%		Due to net foreign exchange loss recognized during the reporting period as a result of the appreciation of US$ against RMB, as compared to net foreign exchange gain of the corresponding period of the previous year.
Impairment loss of assets		-104,299		18,491		-122,790		-664.05%		Mainly due to the reversal of the bad debt provision for other receivables in prior years by a subsidiary of the Group during the reporting period.
Non-operating income		963,743		462,760		500,983		108.26%		Mainly due to the increase in subsidy income received during the reporting period as compared to the corresponding period of the previous year.
Non-operating expenses		88,983		59,046		29,937		50.70%		Mainly due to the increase in loss on disposal of fixed assets.
Net profits attributable to non- controlling interests		224,280		330,911		-106,631		-32.22%		Mainly due to the decrease in total profit of non-wholly owned subsidiary of the Group for the reporting period as compared to the corresponding period of the previous year.

Items in consolidated statement of cash flows		For the period from the beginning of the year to the end of the reporting period		For the corresponding period of the previous year		Amount of Change		Percentage		Reasons for Change
Other cash received relating to operating activities		2,321,067		1,510,584		810,483		53.65%		Mainly due to the increase in non- operating income during the reporting period as compared to the corresponding period of the previous year.
Cash received from investment income		334,851		216,825		118,026		54.43%		Increase in dividends received from investees during the reporting period.
Net cash proceeds from disposal of fixed assets, intangible assets and other long- term assets		1,571,984		975,168		596,816		61.20%		Increase in aircraft disposals completed in this reporting period as compared to the corresponding period of the previous year.
Other cash received relating to investment activities		875,087		429,771		445,316		103.62%		Mainly due to the greater change in the balance of secured deposits during the reporting period as compared to the corresponding period of the previous year.
Cash paid for purchase of fixed assets, intangible assets and other long- term assets		10,262,602		15,668,864		-5,406,262		-34.50%		Decrease in prepayments for the purchase of aircraft and payment of the balance of purchase prices upon the delivery of aircraft during the reporting period as compared to the corresponding period of the previous year.
Other cash paid relating to investing activities		44,354		124,827		-80,473		-64.47%		Mainly due to the decrease in the loss on derivative settlement as compared to the corresponding period of the previous year.
Cash received from capital injection				1,044,449		-1,044,449		-100.00%		The Company privately issued ordinary shares  (A shares) to the parent company during the corresponding period of the previous year.
Cash received from issue of debentures				10,000,000		-10,000,000		-100.00%		The Company issued corporate bonds during the corresponding period of the previous year.
Cash paid for repayment of borrowings		36,224,773		23,904,226		12,320,547		51.54%		The Company made greater payments of debts due for repayment during the reporting period as compared to the corresponding period of the previous year.

3.2      Analysis and explanation on the progress of significant events and their impact and resolutions

□ Applicable √ Not applicable

3.3      Performance of undertakings given by the Company and the shareholders holding more than 5% of the shares of the Company

√ Applicable □ Not applicable

Background of undertakings

Type of undertakings

The party making the undertakings

Contents of undertakings

Date and duration of undertakings

Is there performance duration?

Are they timely and strictly performed?

Undertakings in relation to  refinancing

Related party transactions

CNAHC

China National Aviation Holding Company ("CNAHC") made the undertakings in respect of matters relating to deposits and loans business between the Company and China National Aviation Finance Co., Ltd. ("CNAF"), a subsidiary of CNAHC, as follows:  (1) CNAF is a duly incorporated enterprise group finance company pursuant to the Administrative Measures for Enterprise Groups Finance Companies and other relevant rules and regulations, and sets up sound internal control and financial accounting systems. The operations of CNAF are in compliance with the requirements of the relevant rules and regulations and it is running very well, therefore the Company's deposits placed with and loans from CNAF are definitely secure. In the future, CNAF will continue to operate in strict compliance with the requirements of the relevant rules and regulations;  (2) As the Company is independent from CNAHC in respect of its assets, businesses, personnel, finance and organizations, CNAHC will continue to ensure independence of the Company and fully respect the rights of the Company to determine its own operations. The deposits and loans business activities between the Company and CNAF are decided by the Company in its sole discretion in accordance with the relevant regulatory requirements and actual operating needs, and the internal procedures are to be performed according to the relevant laws and regulations and the articles of association of the Company. CNAHC will not intervene the decisions of the Company;

Background of undertakings

Type of undertakings

The party making the undertakings

Contents of undertakings

Date and duration of undertakings

Is there performance duration?

Are they timely and strictly performed?

(3) According to the Administrative Measures for Enterprise Groups Finance Companies, in the event of crisis involving payment difficulties of CNAF, CNAHC will increase the capital of CNAF to the extent required for resolving such payment difficulties, so as to ensure the security of the Company's deposits placed with CNAF.

The undertakings were made on  12 August 2010

No

Yes

Undertakings in relation to refinancing

Related party transactions

The Company

Under the framework of the financial services agreement signed by the Company and CNAF on 20 November 2012, it is assured that the maximum daily balance of deposits placed by the Company and its holding subsidiaries with CNAF shall be less than the maximum daily balance of loans and other credit services granted by CNAF to the Company and its holding subsidiaries, and the average daily balance of deposits placed by the Company and its holding subsidiaries with CNAF in each accounting year shall be less than the average daily balance of loans and other credit services actually granted by CNAF to the Company and its holding subsidiaries in the relevant year.

The undertakings were made on 17 October 2012 and shall be fulfilled on or before 31 December 2015

Yes

Yes

Other undertakings

Shares sale restriction

CNAHC

On 20 December 2013, CNAHC increased its shareholdings in the Company by 760,000 A shares via the trading system of the Shanghai Stock Exchange, representing 0.01% of the total issued share capital of the Company (the "First Share Acquisition"). CNAHC intends to continue to increase its shareholdings in the Company, either in its own name or through parties acting in concert with it, via the secondary market within 12 months from 20 December 2013 up to an aggregated amount not exceeding 2% of the total issued share capital of the Company (including the increased shareholdings in the First Share Acquisition). CNAHC undertakes that it will not sell any shares it holds in the Company during the period of the implementation of the acquisition plan and within the statutory period.

The undertakings were made on 21 December 2013 and shall be fulfilled on or before 19 June 2015

Yes

Yes

3.4      Warning in respect of forecast of possible net loss from the beginning of the year to the end of the next reporting period or warning in respect of any significant changes in net profit as compared with that of the corresponding period of previous year and the underlying reasons

□ Applicable √ Not applicable

3.5      Effect of implementation of new accounting standards on consolidated financial statements

The Company had prospectively implemented five new standards (Accounting Standard for Business Enterprises No. 9 - Employee benefits, Accounting Standard for Business Enterprises No. 30 - Presentation of financial statements, Accounting Standard for Business Enterprises No. 33 - Consolidated financial statements, Accounting Standard for Business Enterprises No. 39 - Fair value measurement and Accounting Standard for Business Enterprises No. 40 - Joint arrangement) in its 2013 Annual Report. Except for retrospective reduction made on consolidated long-term equity investments of RMB292 million, capital reserve of RMB207 million and retained earnings of RMB85 million as at the beginning of 2013 in accordance with Accounting Standard for Business Enterprises No. 9 - Employee benefits, the other four standards did not affect the data presented in the financial statements of the Company. The remaining two new standards were implemented from 1 July 2014. In accordance with Accounting Standard for Business Enterprises No. 2 - Long-term equity investments, retrospective reduction was made on consolidated long- term equity investments of RMB48 million, and retrospective increase was made on available-for-sale financial assets of RMB48 million as at the beginning of 2014. Accounting Standard for Business Enterprises No. 41 - Disclosure of interests in other entities did not affect the data presented in the financial statements of the Company.

3.5.1      Effect of change in standard on long-term equity investments on consolidated financial report (I)

Unit: RMB'000

Investees		Basic information of the transaction		1 January 2013		31 December 2013
				Equity attributable to shareholders of the Company (+/-)		Long-term  equity investments (+/-)		Available-for-sale financial  assets (+/-)		Equity  attributable to shareholders of the  Company (+/-)
Shenzhen Civil Aviation Cares Co., Ltd.						-2,588		2,588
Hainan Civil Aviation Cares Co., Ltd.						-512		512
Aviation Data Communication Corporation						-1,331		1,331
Guangzhou Baiyun International Airport Ground Handling Service Company Limited						-18,744		18,744
China National Aviation Investment Holding Company						0		0
TravelSky Technology Limited						-9,600		9,600
Wuxi Airport Co., Ltd.						-15,193		15,193
Xibei Leasing Co., Ltd.						0		0
Henan Airlines Co., Ltd.						0		0
Jade Cargo International Airlines Co., Ltd.						0		0
Total						-47,968		47,968

Explanation on effect of change in standard on long-term equity investments on consolidated financial report (I)

In accordance with the standard, the investees on which the Company has no control, joint control or significant influence shall be accounted for as available-for-sale financial assets.

Air China Limited Legal representative: Cai Jianjiang 28 October 2014

4.      APPENDIX

4.1      Financial Statements

Consolidated Balance Sheet
30 September 2014

Prepared by Air China Limited

Unit: RMB'000 (Unaudited)

Items		Balance at  the end of  period		Balance at  the beginning of the year
CURRENT ASSETS:
Cash and bank balances		10,588,476		15,507,677
Provisions on payables
Contributions made
Financial assets at fair value through profit or loss		24,064		11,350
Bills receivable		381		131
Accounts receivable		3,153,136		3,100,584
Prepayments		951,694		679,962
Premium receivable
Receivables on reinsurance
Provisions for reinsurance contracts
Interest receivable
Dividend receivable
Other receivables		2,880,572		2,849,938
Purchase of financial assets resold
Inventories		1,094,874		1,044,617
Non-current assets due within a year
Fixed assets held for sale		233,418		994,413
Other current assets		2,292,316		1,236,939
Total current assets		21,218,931		25,425,611
NON-CURRENT ASSETS:
Loans and advances
Available-for-sale financial assets		162,387		47,968
Held-to-maturity investments
Long-term receivables		537,309		451,404
Long-term equity investments		16,062,078		15,939,840
Investment properties		237,826		246,291
Fixed assets		133,307,160		123,988,709
Construction in progress		28,448,363		31,772,505
Construction materials
Disposal of fixed assets
Biological assets for production
Oil and gas assets
Intangible assets		3,245,262		2,864,299
Development expenses
Goodwill		1,102,185		1,102,185
Long-term deferred expenses		381,096		363,536
Deferred tax assets		3,012,102		3,159,535
Other non-current assets
Total non-current assets		186,495,768		179,936,272
Total assets		207,714,699		205,361,883
CURRENT LIABILITIES:
Short-term loans		21,600,118		22,821,013
Short-term bonds payable				700,000
Borrowings from central bank
Deposits from clients and placements  from other banks
Contributions received
Financial liabilities at fair value through profit or loss		13,430		24,070
Bills payable		441,234
Accounts payable		12,557,360		11,828,973
Domestic air traffic liabilities		1,745,811		1,785,306
International air traffic liabilities		2,950,280		2,676,142
Receipts in advance		110,866		133,112
Sale of financial assets repurchased
Fees and commissions payable
Salaries and wages payable		1,569,233		2,239,516
Taxes payable		937,477		711,649
Interest payable		779,441		712,165

Items		Balance at  the end of  period		Balance at  the beginning of the year
Dividend payable
Other payables		5,166,087		5,505,080
Amounts payable on reinsurance
Reserves on insurance contracts
Brokerage payable
Underwriting fees payable
Non-current liabilities due within a year		13,112,926		20,507,235
Other current liabilities
Total current liabilities		60,984,263		69,644,261
NON-CURRENT LIABILITIES:
Long-term borrowings		30,344,571		23,266,406
Debentures payable		16,000,000		19,000,000
Long-term payables		3,402,724		3,376,552
Obligations under finance leases payable		29,741,503		25,972,715
Specific payables
Estimated liabilities		370,251		376,601
Deferred income		4,158,681		3,767,948
Deferred income tax liabilities		2,252,409		2,014,407
Other non-current liabilities
Total non-current liabilities		86,270,139		77,774,629
Total liabilities		147,254,402		147,418,890
OWNER'S EQUITY (OR SHAREHOLDERS' EQUITY):
Issued capital		13,084,751		13,084,751
Capital reserve		17,957,748		18,318,568
Less: Treasury shares
Specific reserves
Surplus reserves		5,481,256		5,233,245
General risk provisions
Profit available for appropriation		23,560,484		21,245,364
Foreign exchange translation reserve		-3,564,476		-3,727,738
Total owner's equity attributable to shareholders of the Company		56,519,763		54,154,190
Non-controlling interests		3,940,534		3,788,803
Total owner's equity		60,460,297		57,942,993
Total liabilities and owner's equity		207,714,699		205,361,883

Legal representative: Cai Jianjiang
Person in charge of accounting function: Xiao Feng
Person in charge of accounting department: Zhan Zhong

Balance Sheet of the Parent Company
30 September 2014

Prepared by Air China Limited

Unit: RMB'000 (Unaudited)

Items		Balance at  the end of  the period		Balance at  the beginning of the year
CURRENT ASSETS:
Cash and bank balances		3,738,797		6,587,506
Held-for-trading financial assets
Bills receivable
Accounts receivable		4,223,657		3,432,286
Prepayments		489,092		394,823
Interest receivable
Dividend receivable
Other receivables		3,006,956		2,841,241
Inventories		656,140		619,845
Entrusted loans		1,020,000
Non-current assets due within a year
Fixed assets held for sale		233,419		577,627
Other current assets		1,760,961		1,022,022
Total current assets		15,129,022		15,475,350
NON-CURRENT ASSETS:
Available-for-sale financial assets		22,784		22,784
Held-to-maturity investments
Long-term receivables		337,680		260,921
Long-term equity investments		23,226,620		22,663,811
Investment properties
Fixed assets		93,325,868		92,051,664
Construction in progress		19,122,493		20,292,144
Construction materials
Disposal of fixed assets
Biological assets for production
Oil and gas assets
Intangible assets		2,088,213		2,121,602
Development expenses
Goodwill
Long-term deferred expenses		177,755		127,045
Deferred tax assets		1,748,449		2,102,909
Other non-current assets
Total non-current assets		140,049,862		139,642,880
Total assets		155,178,884		155,118,230
CURRENT LIABILITIES:
Short-term loans		13,314,115		11,681,204
Financial liabilities at fair value through profit or loss				3,819
Bills payable
Accounts payable		9,036,881		8,548,547
Domestic air traffic liabilities		1,306,740		1,297,248
International air traffic liabilities		2,712,839		2,402,980
Receipts in advance		94,202		78,145
Salaries and wages payable		591,354		1,192,412
Taxes payable		670,538		368,760
Interest payable		681,269		631,840
Dividend payable
Other payables		3,509,760		1,897,005

Items		Balance at  the end of  the period		Balance at  the beginning of the year
Non-current liabilities due within a year		9,712,472		17,661,914
Other current liabilities
Total current liabilities		41,630,170		45,763,874
NON-CURRENT LIABILITIES:
Long-term borrowings		15,494,241		10,937,026
Debentures payable		16,000,000		19,000,000
Long-term payables		1,631,528		1,656,739
Obligations under finance leases payable		23,604,463		23,444,512
Specific payables
Estimated liabilities		28,592		34,942
Deferred income		3,133,755		2,621,292
Deferred income tax liabilities		119,313		244,745
Other non-current liabilities
Total non-current liabilities		60,011,892		57,939,256
Total liabilities		101,642,062		103,703,130
OWNER'S EQUITY (OR SHAREHOLDERS' EQUITY):
Issued capital		13,084,751		13,084,751
Capital reserve		20,988,932		20,963,029
Less: Treasury shares
Specific reserves
Surplus reserves		5,481,256		5,233,245
General risk provisions
Profit available for appropriation		13,981,883		12,134,075
Total owner's equity (or shareholders' equity)		53,536,822		51,415,100
Total liabilities and owner's equity  (or shareholders' equity)		155,178,884		155,118,230

Legal representative: Cai Jianjiang
Person in charge of accounting function: Xiao Feng
Person in charge of accounting department: Zhan Zhong

Consolidated Income Statement

Prepared by Air China Limited

Unit: RMB'000 (Unaudited)

Items		Amounts for the period (July to September)		Amounts  for the corresponding period of the previous year  (July to  September)		Amounts for the period from the beginning of the year to the end of the reporting period  (January to September)		Amounts for the period from the beginning of the previous year to the end of the last reporting period (January to September)
I.      Revenue from operations		29,794,197		27,928,675		78,911,498		73,786,988
Including: Operating income		29,794,197		27,928,675		78,911,498		73,786,988
Interest income
Premium earned
Fees and commission income
II.      Total operating costs		26,488,767		24,317,952		76,168,272		69,110,000
Including: Operating costs		23,018,492		21,254,349		65,317,714		60,785,053
Interest expenses
Fees and commission expenses
Returned premium
Net reimbursement paid
Net amounts of  provisions on insurance contracts drawn
Bonus paid on  insurance policy
Reinsurance premium
Business taxes and other levies		56,936		81,707		141,343		258,278
Selling expenses		1,900,250		1,937,006		5,497,335		5,334,748
Administrative expenses		799,298		763,969		2,295,603		2,214,535
Finance expenses		825,330		280,574		3,020,576		498,895
Impairment loss of assets		-111,539		347		-104,299		18,491
Add: Gains from changes in fair value  (loss is represented by "-"  sign)		4,758		-2,091		4,335		-3,045
Investment income (loss is represented by "-" sign)		406,026		412,552		652,875		583,053
Including: Gains arising from  investments in  associated  companies and  joint ventures		404,093		411,273		648,723		579,884
Exchange gains (loss is represented by "-" sign)
III.      Profit from operations  (loss is represented by "-" sign)		3,716,214		4,021,184		3,400,436		5,256,996
Add: Non-operating income		86,104		145,817		963,743		462,760
Less: Non-operating expenses		38,926		18,373		88,983		59,046

Items		Amounts for the period (July to September)		Amounts  for the corresponding period of the previous year  (July to  September)		Amounts for the period from the beginning of the year to the end of the reporting period  (January to September)		Amounts for the period from the beginning of the previous year to the end of the last reporting period (January to September)
Including: Loss arising from  disposal of non-current assets		32,661		5,919		70,630		26,946
IV.      Total profit (total loss is  represented by "-" sign)		3,763,392		4,148,628		4,275,196		5,660,710
Less: Income tax expenses		803,629		882,197		893,895		1,268,780
V.      Net profit (net loss is represented  by "-" sign)		2,959,763		3,266,431		3,381,301		4,391,930
Net profits attributable to shareholders of the listed company		2,682,640		2,942,127		3,157,021		4,061,019
Net profits attributable to non- controlling interests		277,123		324,304		224,280		330,911
VI.      Earnings per share:
(I)      Basic		0.22		0.24		0.26		0.33
(II)      Diluted		N/A		N/A		N/A		N/A
VII.      Other consolidated gains		78,122		-92,744		-153,070		47,459
VIII.      Total consolidated gains		3,037,885		3,173,687		3,228,231		4,439,389
Total consolidated gains attributable to shareholders of the listed company		2,720,887		2,851,796		2,959,463		4,118,278
Total consolidated gains attributable to Non-controlling interests		316,998		321,891		268,768		321,111

Legal representative of the Company: Cai Jianjiang
Person in charge of accounting function: Xiao Feng
Person in charge of accounting department: Zhan Zhong

Income Statement of the Parent Company

Prepared by Air China Limited

Unit: RMB'000 (Unaudited)

Items		Amounts for the period (July to September)		Amounts  for the corresponding period of the previous year (July to September)		Amounts for the period from the beginning of the year to the end of the reporting period (January to September)		Amounts for the period from the beginning of the previous year to the end of the last reporting period (January to September)
I.      Revenue from operations		21,206,303		19,842,160		56,040,674		52,335,145
Less: Operating cost		16,052,793		15,006,593		45,711,385		42,936,494
Business taxes and other levies		24,319		29,139		68,637		97,432
Selling expenses		1,493,473		1,446,421		4,292,309		4,122,034
Administrative expenses		442,985		430,031		1,253,562		1,234,608
Finance expenses		599,041		172,937		2,212,885		197,245
Impairment loss of assets						5,482		18,242
Add: Gains from changes in fair value  (loss is represented  by "-"sign)				71				1,470
Investment income (loss is represented by "-" sign)		184,488		219,015		375,235		449,087
Including: Gains arising from  investments in  associated  companies and joint ventures		182,350		219,015		250,687		330,312
II.      Profit from operations (loss is represented by "-" sign)		2,778,180		2,976,125		2,871,649		4,179,647
Add: Non-operating income		138,085		44,337		629,585		231,683
Less: Non-operating expenses		33,635		11,779		80,204		36,189
Including: Loss arising from  disposal of non- current assets		30,690		5,118		68,069		14,772
III.      Total profit (total loss is represented by "-" sign)		2,882,630		3,008,683		3,421,030		4,375,141
Less: Income tax expenses		656,903		636,375		732,341		896,210
IV.      Net profit (net loss is represented  by "-" sign)		2,225,727		2,372,308		2,688,689		3,478,931
V.      Earnings per share:
(I)      Basic (RMB)
(II)      Diluted (RMB)
VI.      Other consolidated gains		24,806				25,903		89
VII.      Total consolidated gains		2,250,533		2,372,308		2,714,592		3,479,020

Legal representative of the Company: Cai Jianjiang
Person in charge of accounting function: Xiao Feng
Person in charge of accounting department: Zhan Zhong

Consolidated Cash Flow Statement
January to September 2014

Prepared by Air China Limited

Unit: RMB'000 (Unaudited)

Items		Amounts for the period from the beginning of the year to the end of the reporting period (January to September)		Amounts for the period from the beginning of the previous year to the end of the last reporting period (January to September)
I.      Cash flows from operating activities:
Cash received from sales of goods and provision of services		82,863,244		77,950,954
Net increase in deposits from clients and placements from other banks
Net increase in borrowings from central bank
Net increase in contributions made to other financial institutions
Cash received from premiums of original insurance contracts
Net cash receipt from reinsurance operations
Net increase in reserve of the insured and investment
Net increase in disposal of held-for-trading financial assets
Cash received from interests, fees and commission
Net increase in contributions received
Net increase in cash from repurchase operations
Refund of tax and levy		16,795		12,300
Other cash received relating to operating activities		2,321,067		1,510,584
Subtotal of cash inflows of operating activities		85,201,106		79,473,838
Cash paid for goods purchased and services received		49,285,841		46,067,549
Net increase in loans and advances to clients
Net increase in deposits in central bank and to other banks
Cash paid in respect of claims under original insurance contracts
Cash paid for interests, fees and commission
Cash paid for bonus paid on insurance policy
Cash paid to or on behalf of employees		11,566,230		9,739,148
Tax and levies paid		2,927,019		2,433,170
Other cash paid relating to operating activities		6,692,236		6,626,333
Subtotal of cash outflows from operating activities		70,471,326		64,866,200
Net cash flows from operating activities		14,729,780		14,607,638
II.      Cash flows from investment activities:
Cash received from sales and redemption of investments
Cash received from investment income		334,851		216,825
Net cash proceeds from disposal of fixed assets, intangible assets and other long-term assets		1,571,984		975,168
Net cash proceeds from disposal of subsidiaries and other business units
Other cash received relating to investment activities		875,087		429,771
Subtotal of cash inflows from investment activities		2,781,922		1,621,764
Cash paid for purchase of fixed assets, intangible assets and other long-term assets		10,262,602		15,668,864
Cash paid for investments				10,403

Items		Amounts for the period from the beginning of the year to the end of the reporting period (January to September)		Amounts for the period from the beginning of the previous year to the end of the last reporting period (January to September)
Net increase in secured loans
Net cash payments for acquisition of subsidiaries and other business units
Other cash paid relating to investment activities		44,354		124,827
Subtotal of cash outflows from investment activities		10,306,956		15,804,094
Net cash flows from investment activities		-7,525,034		-14,182,330
III.      Cash flows from financing activities:
Cash received from capital injection				1,044,449
Including: Cash received from capital injection of  minority shareholders in subsidiaries
Cash received from borrowings		31,163,598		24,271,543
Cash received from issue of debentures				10,000,000
Other cash received relating to financing activities
Subtotal of cash inflows from financing activities		31,163,598		35,315,992
Cash paid for repayment of borrowings		36,224,773		23,904,226
Cash paid for distribution of dividends, profits or payment of interest expenses		2,968,713		2,707,301
Including: Dividends and profit paid to minority shareholders by subsidiaries		117,037		114,998
Other cash paid relating to financing activities		3,482,801		2,996,558
Subtotal of cash outflows from financing activities		42,676,287		29,608,085
Net cash flows from financing activities		-11,512,689		5,707,907
IV.      Effect of exchange rate changes on cash and cash equivalents		16,226		-142,022
V.      Net increase in cash and cash equivalents		-4,291,717		5,991,193
Add: Balance of cash and cash equivalents as at the beginning of the period		14,761,830		11,787,943
VI.      Balance of cash and cash equivalents as at the end of the period		10,470,113		17,779,136

Legal representative of the Company: Cai Jianjiang
Person in charge of accounting function: Xiao Feng
Person in charge of accounting department: Zhan Zhong

Cash Flow Statement of the Parent Company
January to September 2014

Prepared by Air China Limited

Unit: RMB'000 (Unaudited)

Items		Amounts for the period from the beginning of the year to the end of the reporting period (January to September)		Amounts for the period from the beginning of the previous year to the end of the last reporting period (January to September)
I.      Cash flows from operating activities:
Cash received from sales of goods and provision of services		58,058,101		55,448,326
Refund of tax and levy		4,965		4,805
Other cash received relating to operating activities		1,819,260		1,214,673
Subtotal of cash inflows from operating activities		59,882,326		56,667,804
Cash paid for goods purchased and services received		35,997,536		33,290,008
Cash paid to and on behalf of employees		6,476,507		5,398,547
Taxes and levies paid		2,023,452		1,351,502
Other cash paid relating to operating activities		5,204,011		4,752,123
Subtotal of cash outflows from operating activities		49,701,506		44,792,180
Net cash flows from operating activities		10,180,820		11,875,624
II.      Cash flows from investment activities:
Cash received from sales and redemption of investments
Cash received from investment income		227,835		236,066
Net cash proceeds from disposal of fixed assets, intangible assets and other long-term assets		924,903		261,589
Net cash proceeds from disposal of subsidiaries and other business units
Other cash received relating to investment activities		788,479		87,940
Subtotal of cash inflows from investment activities		1,941,217		585,595
Cash paid for purchase of fixed assets, intangible assets and other long-term assets		4,928,332		10,428,323
Cash paid for investments				9,403
Net cash payments for acquisition of subsidiaries and other business units		431,743		147,824
Other cash paid relating to investment activities		1,023,819		66,762
Subtotal of cash outflows from investment activities		6,383,894		10,652,312
Net cash flows from investment activities		-4,442,677		-10,066,717
III.      Cash flows from financing activities:
Cash received from capital injection				1,044,449
Cash received from borrowings		20,076,997		13,348,903
Cash received from issue of debentures				10,000,000
Other cash received relating to financing activities
Subtotal of cash inflows from financing activities		20,076,997		24,393,352
Cash paid for repayment of borrowings		23,165,199		16,535,304
Cash paid for distribution of dividends, profits or payment of interest expenses		2,115,306		1,799,926
Other cash paid relating to financing activities		2,716,087		2,680,608

Items		Amounts for the period from the beginning of the year to the end of the reporting period (January to September)		Amounts for the period from the beginning of the previous year to the end of the last reporting period (January to September)
Subtotal of cash outflows from financing activities		27,996,592		21,015,838
Net cash flows from financing activities		-7,919,595		3,377,514
IV.      Effect of exchange rate changes on cash and cash equivalents		-3,940		-22,047
V.      Net increase in cash and cash equivalents		-2,185,392		5,164,374
Add: Balance of cash and cash equivalents as at the beginning of the period		5,924,189		3,900,178
VI.      Balance of cash and cash equivalents as at the end of the period		3,738,797		9,064,552

Legal representative of the Company: Cai Jianjiang
Person in charge of accounting function: Xiao Feng
Person in charge of accounting department: Zhan Zhong

4.2      Audit report

If the quarterly report is audited by the Certified Public Accountant, the appendix should disclose the text of the audit report.

□ Applicable √ Not applicable

By order of the Board Air China Limited Rao Xinyu Tam Shuit Mui Joint Company Secretaries

Beijing, the PRC, 28 October 2014

As at the date of this announcement, the directors of the Company are Mr. Cai Jianjiang, Ms. Wang Yinxiang, Mr. Cao Jianxiong, Mr. Feng Gang, Mr. John Robert Slosar, Mr. Ian Sai Cheung Shiu, Mr. Song Zhiyong, Mr. Fan Cheng, Mr. Fu Yang*, Mr. Yang Yuzhong*, Mr. Pan Xiaojiang* and Mr. Simon To Chi Keung*.

* Independent non-executive Director of the Company

 

END

 

 

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