AIR CHINA FIRST QUARTERLY REPORT 2017

RNS Number : 6311D

Air China Ld

28 April 2017

 

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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)

FIRST QUARTERLY REPORT 2017

This announcement is made pursuant to Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) and Rule 13.09 and 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") held a meeting of the Board on 27 April 2017 and passed the resolution approving the first quarterly report 2017 of the Company for the first quarter ended 31 March 2017 (the "Reporting Period") 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 confirm that there are no misrepresentation or misleading statements contained in or material omissions from this quarterly report, and jointly and severally accept full responsibility for the truthfulness, accuracy and completeness of the contents of this quarterly report.

1.2     Particulars of absent directors

Name of absent director	Position of absent director	Reason(s) for absence	Name of proxy
Feng Gang	Director	Business engagement	Cai Jianjiang
John Robert Slosar	Director	Business engagement	-

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

1.4     The first quarterly report of the Company is unaudited.

2.       BASIC INFORMATION OF THE COMPANY

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	233,352,304	224,128,192	4.12
Net asset attributable to shareholders of the listed company	81,388,740	68,876,496	18.17

	For the period from the beginning of the year to the end of the Reporting Period	For the corresponding period of the previous year	Increase/ decrease as compared to the corresponding period of the previous year
			(%)
Revenue	28,968,982	26,388,811	9.78
Net profit attributable to shareholders of the listed company	1,466,400	2,435,293	-39.79
Net profit attributable to shareholders of the listed company after deducting non-recurring profits and losses	1,439,366	2,384,011	-39.62
Weighted average return on net assets (%)	2.03	3.99	Decrease by 1.96 ppts
Basic earnings per share (RMB per share)	0.11	0.20	-46.06
Diluted earnings per share (RMB per share)	N/A	N/A	N/A

Non-recurring profits and losses

  Applicable    Not applicable

Unit: RMB'000

Items	Amounts for the Reporting Period
Gains or losses on disposal of non-current assets	-1,490
Government subsidies recorded in the income statement for the current period (exclusive of government subsidies which are closely related to the business of the Company and entitled pursuant to unified standard quota or amount under the government policy)	45,904
Gains or losses 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)	25
Other non-operating income and expenses not covered by the above	3,197
Effect of minority shareholders' interests (after tax)	-8,366
Effect of income tax	-12,236
Total	27,034

2.2     Total number of shareholders, the top 10 shareholders and the top 10 holders of tradable shares (or shares not subject to selling restrictions) as at the end of the Reporting Period

Total number of shareholders	176,882
	Unit: share

Particulars of the top 10 shareholders
Name of shareholder (full name)	Number of shares held as at the end of the period	Shareholding percentage	Number of  shares held subject to selling restrictions	Shares pledged or frozen		Nature of shareholder
				Status	Number
		(%)
China National Aviation Holding Company	5,952,236,697	40.98	513,478,818	Frozen	127,445,536	State
Cathay Pacific Airways Limited	2,633,725,455	18.13		Nil		Foreign legal person
HKSCC NOMINEES LIMITED	1,683,174,520	11.59		Nil		Foreign legal person
China National Aviation Corporation (Group) Limited	1,556,334,920	10.72		Frozen	36,454,464	Foreign legal person
China National Aviation Fuel Group Corporation	471,409,114	3.25	385,109,114	Nil		State-owned legal person
Zhongyuan Equity Investment Management Co., Ltd.	262,569,409	1.81	256,739,409	Unknown	262,569,405	State-owned legal person
China Structural Reform Fund Co., Ltd.	231,065,468	1.59	231,065,468	Nil		State-owned legal person
China Securities Finance Corporation Limited	224,397,428	1.54		Nil		State-owned legal person
Sinotrans Air Transportation Development Co., Ltd.	75,800,000	0.52		Nil		State-owned legal person
National Social Security Fund 118	49,219,106	0.34		Nil		Unknown

Particulars of the top 10 shareholders not subject to selling restrictions
Name of shareholder	Number of tradable shares held not subject to selling restrictions	Class and number of shares
		Class	Number
China National Aviation Holding Company	5,438,757,879	RMB ordinary shares	5,438,757,879
Cathay Pacific Airways Limited	2,633,725,455	Overseas listed foreign shares	2,633,725,455
HKSCC NOMINEES LIMITED	1,683,174,520	Overseas listed foreign shares	1,683,174,520
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 Securities Finance Corporation Limited	224,397,428	RMB ordinary shares	224,397,428
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
National Social Security Fund 118	49,219,106	RMB ordinary shares	49,219,106
China Merchants Securities Co., Ltd.	34,848,900	RMB ordinary shares	34,848,900
Tianan Property Insurance Co.,  Ltd- BAO YING NO. 1	23,918,908	RMB ordinary shares	23,918,908
Explanation 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 51.70% of the shares of the Company.
Explanation of holders of preference shares with restored voting rights and number of shares held	Nil

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 1,683,174,520 H shares held by it in the Company do 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, the controlling shareholder of the Company, and China National Aviation Corporation (Group) Limited respectively are frozen at present.

2.3     Total number of holders of preference shares, the top 10 holders of preference shares and the top 10 holders of preference shares not subject to selling restrictions as at the end of the Reporting Period

  Applicable    Not applicable

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

Total profit of the Group for the first quarter of 2017 was RMB2,420 million, representing a year-on-year decrease of RMB1,258 million; net profit attributable to the Company was RMB1,466 million, representing a year-on-year decrease of RMB969 million, which was mainly due to the increase in oil price, substantial increase in the cost of aviation fuel and substantial decrease in investment income.

Unit: RMB'000

Items in consolidated balance sheet	Balance at the end of the Reporting Period	Balance at the beginning of the year	Amount of Change	Percentage	Reasons for Change
Cash and bank	15,680,112	7,322,356	8,357,756	114.14%	Mainly due to the impact of fund raising through the non-public issue of A shares during the Reporting Period.
Prepayments	3,038,397	1,136,826	1,901,571	167.27%	Increase in prepayment of aviation oil during the Reporting Period.
Held-for-sale assets	538,598	918,587	-379,989	-41.37%	Disposal of some aircraft held for sale during the Reporting Period.
Other current assets	2,102,876	3,053,370	-950,494	-31.13%	Decrease in the financial assets held by China National Aviation Finance Co., Ltd., a subsidiary of the Group, at the end of the Reporting Period.
Domestic air traffic liabilities	1,639,834	2,933,845	-1,294,011	-44.11%	Decrease in outstanding air traffic tickets at the end of the Reporting Period.
Capital reserve	26,270,841	16,509,531	9,761,310	59.13%	Mainly due to the impact of the non-public issue of A shares during the Reporting Period.

Items in Consolidated income statement	Amounts for the Reporting Period	Amounts for the corresponding period of the previous year	Amount of Change	Percentage	Reasons for Change
Investment income	-141,592	330,690	-472,282	-142.82%	Decrease in investment income from joint ventures and associates recognized during the Reporting Period as compared to the corresponding period of the previous year.

Items in consolidate cash flow statement	Amounts for the  Reporting Period	Amounts for the corresponding period of the previous year	Amount of Change	Percentage	Reasons for Change
Other cash received relating to operating activities	725,989	1,449,552	-723,563	-49.92%	Mainly due to net decrease in deposits from clients by China National Aviation Finance Co., Ltd., a subsidiary of the Group, during the Reporting Period as compared to the corresponding period of the previous year.
Cash paid for goods purchased and services received	18,515,079	13,413,663	5,101,416	38.03%	Increase in operating costs and prepayments for aviation fuel during the Reporting Period.
Net cash proceeds from disposal of fixed assets and intangible assets	372,961	126,093	246,868	195.78%	Increase in disposal amount received from disposal of aircraft held for sale during the Reporting Period as compared to the corresponding period of the previous year.
Other cash received relating to investment activities	34,144	283,413	-249,269	-87.95%	Mainly due to decrease in the balance of secured deposits during the Reporting Period is less than that of the corresponding period of the previous year.
Cash paid for purchase of fixed assets and other long-term assets	3,332,804	6,995,326	-3,662,522	-52.36%	Decrease in prepayments for the purchase of aircraft and payment of the balance of purchase prices of aircraft during the Reporting Period as compared to the corresponding period of the previous year.
Cash received from issue of debentures	-	4,800,000	-4,800,000	-100.00%	Mainly due to that the Group issued short-term bonds in the corresponding period of the previous year.
Cash received from capital injection	11,201,374	-	11,201,374	100.00%	Raising capital by non-public issue of shares during the Reporting Period.
Cash paid for repayment of debentures	1,200,000	600,000	600,000	100.00%	Increase in repayment of short-term bonds by a subsidiary of the Group 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

Considered and approved by the 39th meeting of the fourth session of the Board, the 2017 first extraordinary general meeting of the Company, and the 2017 first A shareholders' class meeting, the validity period of resolution relating to the non-public A share issue of the Company was extended until 30 April 2017, and the validity period of the authorisation granted to the Board and the Board's authorised person(s) to handle all relevant matters relating to the non-public A share issue was extended for a 12-month period from the date of approval of relevant resolution at the 2017 first extraordinary general meeting. Please refer to the announcements published by the Company on 24 January 2017 on the website of Shanghai Stock Exchange (http://www.sse.com.cn/) and the China Securities Journal, Shanghai Securities News and Securities Daily.

On 10 March 2017, the Company completed the non-public issue of 1,440,064,181 A shares, at the issue price of RMB7.79 per share, to China National Aviation Holding Company, China Structural Reform Fund Co., Ltd., Zhongyuan Equity Investment Management Co., Ltd., China National Aviation Fuel Group Corporation, Caitong Fund Management Co., Ltd., CIB Asset Management Co., Ltd., Horizon Asset Management Co., Ltd., and E Fund Management Co., Ltd. The shares subscribed by China National Aviation Holding Company shall not be transferred within 36 months from the completion date of the issuance, and those shares subscribed by other investors shall not be transferred within 12 months from the completion date of the issuance. After the non-public A share issue, China National Aviation Holding Company holds directly and indirectly 7,508,571,617 shares of the Company, representing 51.70% of the total issued share capital of the Company, and remains the controlling shareholder of the Company. Please refer to the announcement published by the Company on 14 March 2017 on the website of Shanghai Stock Exchange (http://www.sse.com.cn/) and the China Securities Journal, Shanghai Securities News and Securities Daily.

3.3     Undertakings that were failed to fulfill as scheduled during the Reporting Period

  Applicable    Not applicable

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

Company name		Air China Limited
Legal representative		Cai Jianjiang
Date		27 April 2017

4.       APPENDIX

4.1     Financial Statements

Consolidated Balance Sheet

31 March 2017

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	15,680,112	7,322,356
Provisions on payables
Contributions made
Financial assets at fair value through profit or loss	10,229	222
Derivative financial assets
Bills receivable	598	837
Accounts receivable	3,443,407	3,286,091
Other receivables	1,754,976	1,923,459
Prepayments	3,038,397	1,136,826
Premium receivable
Receivables on reinsurance
Provisions for reinsurance contracts
Interest receivable
Dividend receivable
Other receivables
Purchase of financial assets resold
Inventories	1,976,963	1,680,633
Held-for-sale assets	538,598	918,587
Non-current assets due within a year
Other current assets	2,102,876	3,053,370
Total current assets	28,546,156	19,322,381

Items	Balance at the end of the period	Balance at the beginning of the year
NON-CURRENT ASSETS:
Loans and advances
Available-for-sale financial assets	1,244,368	1,152,704
Held-to-maturity investments	10,000	10,000
Long-term receivables	889,383	898,845
Long-term equity investments	14,899,551	15,168,760
Investment properties	333,354	337,551
Fixed assets	146,604,258	148,910,057
Construction in progress	31,886,669	29,320,914
Construction materials
Disposal of fixed assets
Biological assets for production
Oil and gas assets
Intangible assets	4,221,131	4,252,314
Development expenses
Goodwill	1,102,185	1,102,185
Long-term deferred expenses	653,431	669,414
Deferred tax assets	2,961,818	2,983,067
Other non-current assets
Total non-current assets	204,806,148	204,805,811
Total assets	233,352,304	224,128,192

Items	Balance at the end of the period	Balance at the beginning of the year
CURRENT LIABILITIES:
Short-term loans	18,130,395	14,488,948
Short-term bonds payable	3,948,509	5,147,083
Borrowings from central bank
Deposits from clients and placements from other banks
Contributions received
Financial liabilities at fair value through profit or loss
Derivative financial liabilities
Bills payable
Accounts payable	12,711,929	11,775,901
Domestic air traffic liabilities	1,639,834	2,933,845
International air traffic liabilities	3,142,805	3,380,091
Receipts in advance	187,963	181,050
Sale of financial assets repurchased
Fees and commissions payable
Employee compensations payable	1,698,136	2,191,248
Taxes payable	1,469,326	1,361,742
Interest payable	791,252	761,913
Dividend payable
Other payables	7,426,389	8,480,453
Amounts payable on reinsurance
Reserves on insurance contracts
Brokerage payable
Underwriting fees payable
Held-for-sale liabilities
Non-current liabilities due within a year	13,056,730	13,144,160
Other current liabilities
Total current liabilities	64,203,268	63,846,434

Items	Balance at the end of the period	Balance at the beginning of the year
NON-CURRENT LIABILITIES:
Long-term loans	10,359,272	12,835,222
Debentures payable	24,998,274	24,998,024
Including: Preference shares
Perpetual bonds
Long-term payables	3,705,022	3,546,586
Obligations under finance leases	34,502,027	36,295,471
Defined benefit obligations	269,742	269,742
Specific payables
Accrued liabilities	341,919	341,919
Deferred income	3,272,472	3,092,841
Deferred tax liabilities	2,374,211	2,428,313
Other non-current liabilities
Total non-current liabilities	79,822,939	83,808,118
Total liabilities	144,026,207	147,654,552
OWNER'S EQUITY
Issued capital	14,524,815	13,084,751
Other equity instruments
Including: Preference shares
Perpetual bonds
Capital reserve	26,270,841	16,509,531
Less: Treasury shares
Other comprehensive income	-2,218,128	-2,062,598
Specific reserves
Surplus reserves	7,829,643	7,829,643
General risk provisions	66,709	66,709
Retained earnings	34,914,860	33,448,460
Total owner's equity attributable to equity shareholders of the Company	81,388,740	68,876,496
Non-controlling interests	7,937,357	7,597,144
Total owner's equity	89,326,097	76,473,640
Total liabilities and owner's equity	233,352,304	224,128,192

Legal representative: Mr. Cai Jianjiang

Person in charge of accounting function: Mr. Xiao Feng

Person in charge of accounting department: Mr. Zhan Zhong

Balance Sheet of the Company

31 March 2017

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	10,872,576	2,221,952
Financial assets at fair value through profit or loss
Derivative financial assets
Bills receivable
Accounts receivable	3,313,576	3,028,488
Prepayments	2,685,437	683,229
Interest receivable
Dividend receivable
Other receivables	2,296,572	2,449,640
Inventories	135,330	130,941
Held-for-sale assets	537,147	917,136
Non-current assets due within a year
Other current assets	746,566	829,828
Total current assets	20,587,204	10,261,214

Items	Balance at the end of the period	Balance at the beginning of the year
NON-CURRENT ASSETS:
Available-for-sale financial assets	22,783	22,784
Entrusted loans	1,020,000	1,020,000
Held-to-maturity investments
Long-term receivables	467,961	470,648
Long-term equity investments	26,994,096	26,909,004
Investment properties
Fixed assets	95,357,124	97,170,211
Construction in progress	24,962,770	22,939,247
Construction materials
Disposal of fixed assets
Biological assets for production
Oil and gas assets
Intangible assets	2,531,605	2,555,719
Development expenses
Goodwill
Long-term deferred expenses	318,981	338,712
Deferred tax assets	1,910,934	1,865,409
Other non-current assets
Total non-current assets	153,586,254	153,291,734
Total assets	174,173,458	163,552,948

Items	Balance at the end of the period	Balance at the beginning of the year
CURRENT LIABILITIES:
Short-term loans	15,508,504	13,637,422
Financial liabilities at fair value through profit or loss
Derivative financial liabilities
Bills payable
Accounts payable	11,050,630	10,286,723
Domestic air traffic liabilities	1,106,739	1,904,317
International air traffic liabilities	2,826,330	3,005,001
Receipts in advance	71,432	87,372
Employee compensations payable	502,272	644,294
Taxes payable	718,050	857,313
Interest payable	640,812	644,030
Dividend payable
Other payables	6,702,314	6,975,454
Held-for-sale liabilities
Non-current liabilities due within a year	7,737,271	7,769,333
Other current liabilities
Total current liabilities	46,864,354	45,811,259
NON-CURRENT LIABILITIES:
Long-term loans	1,271,472	3,025,373
Debentures payable	24,000,000	24,000,000
Including:    Preference shares
Perpetual bonds
Long-term payables	1,876,461	1,821,218
Obligations under finance leases	21,060,039	22,519,793
Defined benefit obligations
Specific payables
Accrued liabilities	7,760	7,760
Deferred income	2,808,092	2,614,384
Deferred tax liabilities	102,654	102,654
Other non-current liabilities
Total non-current liabilities	51,126,478	54,091,182
Total liabilities	97,990,832	99,902,441

Items	Balance at the end of the period	Balance at the beginning of the year
OWNER'S EQUITY:
Issued capital	14,524,815	13,084,751
Other equity instruments
Including:    Preference shares
Perpetual bonds
Capital reserve	30,618,680	20,857,370
Less: Treasury shares
Other comprehensive income	198,728	198,728
Specific reserves
Surplus reserves	7,792,537	7,792,537
Retained earnings	23,047,866	21,717,121
Total owner's equity	76,182,626	63,650,507
Total liabilities and owner's equity	174,173,458	163,552,948

Legal representative: Mr. Cai Jianjiang

Person in charge of accounting function: Mr. Xiao Feng

Person in charge of accounting department: Mr. Zhan Zhong

Consolidated Income Statement

January to March 2017

Prepared by Air China Limited

Unit: RMB'000 (Unaudited)

Items	Amounts for the period	Amounts for the corresponding period of the previous year
I.       Revenue from operations	28,968,982	26,388,811
Including: Revenue
Interest income
Premium earned
Fees and commission income
II.      Total operating costs
Including: Operating costs	23,435,307	20,031,270
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	62,818	77,502
Selling expenses	1,528,115	1,453,115
General and Administrative expenses	925,965	963,807
Finance expenses	496,915	616,743
Impairment loss of assets	6,141	6,632
Add:  Gains from changes in fair value  (loss is represented by "-" sign)	82	78
Investment income (loss is  represented by "-" sign)	-141,592	330,690
Including: Share of profits less losses of associates       and joint ventures	-153,770	315,674
Exchange gains (loss is represented by "-" sign)

Items	Amounts for the period	Amounts for the corresponding period of the previous year
III.    Profit from operations (loss is represented by "-" sign)	2,372,211	3,570,510
Add:  Non-operating income	53,977	114,855
Including: Gains arising from disposal       of non-current assets	145	196
Less:  Non-operating expenses	6,366	7,590
Including: Loss arising from disposal       of non-current assets	1,635	1,664
IV.    Total profit (total loss is represented by "-" sign)	2,419,822	3,677,775
Less:  Income Taxation	610,832	795,430
V.      Net profit (net loss is represented by "-" sign)	1,808,990	2,882,345
Net profits attributable to shareholders of the Company	1,466,400	2,435,293
Net profits attributable to non-controlling interests	342,590	447,052
VI.    Other comprehensive income after taxation	-157,907	-115,201
Other comprehensive income after taxation attributable to shareholders of the Company	-155,530	-114,759
(I)      Other comprehensive income that cannot be subsequently reclassified to profit or loss
1.                Change arising from re-measurement of net  liabilities or net assets in defined benefit plans
2.                Share of other comprehensive income of the  investees accounted for using the equity  method that cannot be reclassified to profit or loss
(II)     Other comprehensive income that will be subsequently reclassified to profit or loss	-155,530	-114,759
1.                Share of other comprehensive income of the  investees accounted for using the equity method  that will be subsequently reclassified to  profit or loss
2.                Gains or losses arising from changes in fair  value of available-for-sale financial assets	2,389	1,661
3.                Gains or losses arising from reclassification of  held-to-maturity investments to available-for-sale  financial assets
4.                Effective portion of profit or loss on cash flow hedge
5.      Exchange difference on translation of financial  statements in foreign currency	-157,919	-116,420
6.                Others
Other comprehensive income after taxation attributable to non-controlling interests	-2,377	-442
VII.   Total comprehensive income	1,651,083	2,767,144
Total comprehensive income attributable to shareholders of the Company	1,310,870	2,320,534
Total comprehensive income attributable to non-controlling interests	340,213	446,610
VIII. Earnings per share:
(I)      Basic earnings per share (RMB)	0.11	0.20
(II)     Diluted earnings per share (RMB)	N/A	N/A

Legal representative: Mr. Cai Jianjiang

Person in charge of accounting function: Mr. Xiao Feng

Person in charge of accounting department: Mr. Zhan Zhong

Income Statement of the Company

January to March 2017

Prepared by Air China Limited

Unit: RMB'000 (Unaudited)

Items	Amounts for the period	Amounts for the corresponding period of the previous year
I.       Revenue from operations	19,511,606	17,873,234
Less:  Operating costs	15,958,142	13,743,590
Business taxes and other levies	18,601	27,659
Selling expenses	1,153,433	1,075,197
General and Administrative expenses	363,780	366,783
Finance expenses	400,399	529,088
Impairment loss of assets
Add:  Gains from changes in fair value  (loss is represented by "-" sign)
Investment income (loss is represented by "-" sign)	85,092	172,900
Including:       Share of profits less losses of associates  and joint ventures	85,092	172,900
II.      Profit from operations (loss is represented by "-" sign)	1,702,343	2,303,817
Add:  Non-operating income	15,553	30,743
Including:       Gains arising from disposal of    non-current assets	13	52
Less:  Non-operating expenses	2,683	4,195
Including:       Loss arising from disposal of    non-current assets	0	333
III.    Total profit (total loss is represented by "-" sign)	1,715,213	2,330,365
Less: Income Taxation	384,468	512,159
IV.    Net profit (net loss is represented by "-" sign)	1,330,745	1,818,206
V.      Other comprehensive income after taxation
(I)      Other comprehensive income that cannot be subsequently reclassified to profit or loss
1.  Change arising from re-measurement of net  liabilities or net assets in defined benefit plans
2.  Share of other comprehensive income of the  investees accounted for using the equity  method that cannot be reclassified to  profit or loss
(II)     Other comprehensive income that will be subsequently reclassified to profit or loss
1.  Share of other comprehensive income of the  investees accounted for using the equity  method that will be subsequently reclassified  to profit or loss
2.  Gains or losses arising from changes in fair  value of available-for-sale financial assets
3.  Gains or losses arising from reclassification of  held-to-maturity investments to  available-for-sale financial assets
4.  Effective portion of profit or loss on  cash flow hedge
5.  Exchange difference on translation of  financial statements in foreign currency
6.  Others
VI.    Total comprehensive income	1,330,745	1,818,206
VII.   Earnings per share:
(I)      Basic earnings per share (RMB per share)
(II)     Diluted earnings per share (RMB per share)

Legal representative: Mr. Cai Jianjiang

Person in charge of accounting function: Mr. Xiao Feng

Person in charge of accounting department: Mr. Zhan Zhong

Consolidated Cash Flow Statement

January to March 2017

Prepared by Air China Limited

Unit: RMB'000 (Unaudited)

Items	Amounts for the period	Amounts for the corresponding period of the previous year
I.       Cash flows from operating activities:
Cash received from sales of goods and provision of services	29,017,429	26,625,375
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 financial assets at fair value through profit or loss
Cash received from interests, fees and commission
Net increase in contributions received
Net increase in cash from repurchase operations
Refund of tax and levy	7,267	4,719
Other cash received relating to operating activities	725,989	1,449,552
Subtotal of cash inflows of operating activities	29,750,685	28,079,646
Cash paid for goods purchased and services received	18,515,079	13,413,663
Net increase in loans and advances to clients
Net increase in deposits in central bank and 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	5,378,811	4,892,136
Tax and levies paid	1,401,135	1,086,502
Other cash paid relating to operating activities	1,983,111	1,868,151
Subtotal of cash outflows from operating activities	27,278,136	21,260,452
Net cash flows from operating activities	2,472,549	6,819,194

Items	Amounts for the period	Amounts for the corresponding period of the previous year
II.      Cash flows from investment activities:
Cash received from sales and redemption of investments
Cash received from investment income	13,031	15,990
Net cash proceeds from disposal of fixed assets, intangible assets and other long-term assets	372,961	126,093
Net cash proceeds from disposal of subsidiaries and other business units
Other cash received relating to operating activities	34,144	283,413
Subtotal of cash inflows from investment activities	420,136	425,496
Cash paid for purchase of fixed assets, intangible assets and other long-term assets	3,332,804	6,995,326
Cash paid for investments	85,551	81,296
Net increase in secured loans
Net cash payments for acquisition of subsidiaries and other business units
Other cash paid relating to investment activities	868	149
Subtotal of cash outflows from investment activities	3,419,223	7,076,771
Net cash flows from investment activities	-2,999,087	-6,651,275
III.    Cash flows from financing activities:
Cash received from capital injection	11,201,374
Including:              Cash received from capital injection of    minority shareholders in subsidiaries
Cash received from borrowings	9,558,000	7,485,382
Cash received from issue of debentures		4,800,000
Other cash received relating to financing activities
Subtotal of cash inflows from financing activities	20,759,374	12,285,382
Cash paid for repayment of borrowings	8,613,146	8,328,734
Cash paid for repayment of debentures	1,200,000	600,000
Cash paid for distribution of dividends, profits or payment of interest expenses	851,181	710,529
Including:              Dividends and profit paid to minority    shareholders by subsidiaries
Cash paid relating to finance lease	1,259,774	1,554,426
Other cash paid relating to financing activities
Subtotal of cash outflows from financing activities	11,924,101	11,193,689
Net cash flows from financing activities	8,835,273	1,091,693

Items	Amounts for the period	Amounts for the corresponding period of the previous year
IV.    Effect of exchange rate changes on cash and cash equivalents	-12,293	20,751
V.      Net increase in cash and cash equivalents	8,296,442	1,280,363
Add:  Balance of cash and cash equivalents  as at the beginning of the period	6,848,018	7,138,098
VI.    Balance of cash and cash equivalents as  at the end of the period	15,144,460	8,418,461

Legal representative: Mr. Cai Jianjiang

Person in charge of accounting function: Mr. Xiao Feng

Person in charge of accounting department: Mr. Zhan Zhong

Cash Flow Statement of the Company

January to March 2017

Prepared by Air China Limited

Unit: RMB'000 (Unaudited)

Items	Amounts for the period	Amounts for the corresponding period of the previous year
I.       Cash flows from operating activities:
Cash received from sales of goods and provision of services	19,071,678	17,638,277
Refund of tax and levies
Other cash received relating to operating activities	560,776	404,165
Subtotal of cash inflows of operating activities	19,632,454	18,042,442
Cash paid for goods purchased and services received	13,981,210	9,575,772
Cash paid to or on behalf of employees	2,152,973	2,140,424
Tax and levies paid	936,328	666,973
Other cash paid relating to operating activities	1,573,503	1,599,806
Subtotal of cash outflows from operating activities	18,644,014	13,982,975
Net cash flows from operating activities	988,440	4,059,467
II.      Cash flows from investment activities:
Cash received from sales and redemption of investments
Cash received from investment income	86,818	975
Net cash proceeds from disposal of fixed assets, intangible assets and other long-term assets	362,761	7,523
Net cash proceeds from disposal of subsidiaries and other business units
Other cash received relating to investment activities	14,420	13,263
Subtotal of cash inflows from investment activities	463,999	21,761
Cash paid for purchase of fixed assets, intangible assets and other long-term assets	2,252,618	5,896,293
Cash paid for investments
Net cash payments for acquisition of subsidiaries and other business units
Other cash paid relating to investment activities
Subtotal of cash outflows from investment activities	2,252,618	5,896,293
Net cash flows from investment activities	-1,788,619	-5,874,532

Items	Amounts for the period	Amounts for the corresponding period of the previous year
III.    Cash flows from financing activities:
Cash received from capital injection	11,201,374
Cash received from borrowings	7,673,000	7,227,898
Cash received from issue of debentures	-	3,000,000
Other cash received relating to financing activities
Subtotal of cash inflows from financing activities	18,874,374	10,227,898
Cash paid for repayment of borrowings	7,757,232	7,521,736
Cash paid relating to finance lease	603,237	488,412
Cash paid for distribution of dividends, profits or payment of interest expenses	1,067,048	1,263,049
Other cash paid relating to financing activities
Subtotal of cash outflows from financing activities	9,427,517	9,273,197
Net cash flows from financing activities	9,446,857	954,701
IV.    Effect of exchange rate changes on cash  and cash equivalents	3,946	5,510
V.      Net increase in cash and cash equivalents	8,650,624	-854,854
Add:  Balance of cash and cash equivalents  as at the beginning of the period	2,221,952	3,223,977
VI.    Balance of cash and cash equivalents  as at the end of the period	10,872,576	2,369,123

Legal representative: Mr. Cai Jianjiang

Person in charge of accounting function: Mr. Xiao Feng

Person in charge of accounting department: Mr. Zhan Zhong

4.2     Auditor's Report

  Applicable    Not applicable

By order of the Board

Air China Limited

Rao Xinyu Tam Shuit Mui

Joint Company Secretaries

Beijing, the PRC, 27 April 2017

As at the date of this announcement, the directors of the Company are Mr. Cai Jianjiang, Mr. Song Zhiyong, Mr. Cao Jianxiong, Mr. Feng Gang, Mr. John Robert Slosar, Mr. Ian Sai Cheung Shiu, Mr. Pan Xiaojiang*, Mr. Simon To Chi Keung*, Mr. Stanley Hui Hon-chung* and Mr. Li Dajin*.

*  Independent non-executive Director of the Company

 

END

 

 

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