2007 First Quarterly Report
Air China Ld
30 April 2007
The Stock Exchange of Hong Kong Limited takes no responsibility for the contents
of this announcement, makes no representation as to its accuracy or completeness
and expressly disclaims any liability whatsoever for any loss whatsoever 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: 753)
Overseas Regulatory Announcement
2007 First Quarterly Report
1 IMPORTANT NOTICE
1.1 The Company's Board of Directors, Supervisory Committee, as well as
the directors, supervisors and senior management collectively and individually
warrant that the information set out in this report does not contain any
misrepresentation, misleading statement or material omission and jointly and
severally accept full responsibility as to the truthfulness, accuracy and
completeness of the content herein.
1.2 The Company's non-executive directors Wang Shixiang and Yao Weiting,
and execute director Ma Xulun did not attend the meeting due to official duties,
and they all authorized Chairman Li Jiaxiang to attend the meeting and voting on
their behalf. The Company's independent non-executive directors Hu Hung Lick,
Henry and Jia Kang did not attend the meeting due to official duties, and they
all authorized Zhang Ke to attend the meeting and voting on their behalf.
1.3 The financial statements of the Company for the first quarter were
unaudited.
1.4 Chairman Li Jiaxiang and President Cai Jianjiang (Persons in charge of
the Company), Chief Financial Officer Fan Cheng (Person in charge of accounting
function), and the General Manager of Finance Department .Li Youqiang (Person in
charge of accounting department) warrant that the First Quarterly Report is true
and complete.
2 A SUMMARY OF BASIC PARTICULARS OF THE COMPANY
2.1 Principal accounting data and financial indicators
In RMB
At the end of At the end of
the Reporting the Previous
Period Year
Total assets (RMB million) 82,796 82,002
Shareholders' equity (excluding
minority interests) (RMB million) 30,482 30,096
Net assets per share (RMB) 2.49 2.46
From the
beginning of
the year to
the end of
the Reporting
Period
Net cash flows from operating
activities (RMB million) 1,568
Net cash flows per share from
operating activities (RMB) 0.13
From the
beginning of
the year to
During the end of
the Reporting the Reporting
Period Period
Net profit (RMB million) 403 403
Basic earning per share (RMB) 0.03 0.03
Diluted earning per share (RMB) 0.03 0.03
Return on net assets (RMB) 1.39% 1.39%
Return on net assets after exceptional
gains and losses (%) 1.42% 1.42%
Amount from
the beginning of
the year to the end of
Exceptional gains and losses item the Reporting Period
(RMB)
Gain or loss arising from disposal of other
assets, other than the Company's products -104,872
Various government grants 604,876
Other non-operating income or expenses,
net of provision for impairment of assets -9,400,323
Total -8,900,320
2.2 Total number of shareholders and top 10 holders of listed shares not
subject to trading moratorium as at the end of the Reporting Period (after
completion of Share Reform Plan)
Unit: share
Total number of shareholders at the end
of the Reporting Period 181,842
Particulars of the top 10 holders of listed shares
not subject to trading moratorium
Number of listed
shares not subject to
trading moratorium
Name of shareholders held as at the end
(full name) of the period Class of shares
HKSCC NOMINEES LIMITED 2,241,052,899 Overseas listed
foreign shares
CATHAY PACIFIC 2,124,818,455 Overseas listed
AIRWAYS LIMITED foreign shares
Bank of China-Jiashi 64,340,000 RMB ordinary
Selected Mix Securities shares
Investment Fund
Haitong-Bank of Communications 25,082,400 RMB ordinary
- Nikko Asset Management shares
Co., Ltd. - Nikko AM China
Renminbi-denominated A Shares
Parent Fund (- Bank of
Communications - )
China Construciton Bank - Boshi Value 24,999,999 RMB ordinary
Growth No. 2 Securities Investment Fund shares
Industrial and Commercial Bank of China 23,506,043 RMB ordinary
- Jiashi Strategic Growth Mix shares
Securities Investment Fund ()
Morgan Stanley Investment Management Inc 20,631,947 RMB ordinary
- Morgan Stanley China A Share Fund shares
Shanghai Electrical Appliance Group 20,000,000 RMB ordinary
Financial Co.,Ltd. ( ) shares
The Industrial and Commercial 19,999,836 RMB ordinary
Bank of China - Boshi Selective shares
Shares Securities Investment Fund
Bank of China-Tongzhi Securities 16,863,953 RMB ordinary
Investment Fund shares
3 SIGNIFICANT EVENTS
3.1 Significant changes of the principal accounting statements and financial
indicators and reasons thereof
applicable (X) not applicable
3.2 Analysis and explanation on the progress of significant events and their
impact and resolutions
(X) applicable not applicable
For more details please refer to the 'Memorandum Announcement on
Privatisation of CNAC' dated 24 January 2007 published on the 'China
Securities Journal', the 'Shanghai Securities News' and the 'Securities
Daily' by the Company.
3.3 Performance of undertakings given by the Company, shareholders and the
effective controlling person
(X) applicable not applicable
Pursuant to the 'Memorandum Announcement on Exemption by CS RC of China
National Aviation Holding Company's Obligation to Make Offer for Acquisition
of Air China Shares' and the 'Memorandum Announcement on Increasing Equity
interest in Air China by China National Aviation Holding Company ('CNAHC')'
published by the Company on the 'China Securities Journal' and the
'Shanghai Securities News' on 18 August 2006 and 22 August 2006 respectively,
CNAHC has fulfilled its undertaking to increase its shareholding by 122,870,578
A Shares in aggregate. There is no change in these A Shares as at the date
signing this Quarterly Report. CNAHC has also undertaken that it will not
transfer the aforesaid increased shares within 12 months after completion of the
shareholding increase plan.
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 last year and the reasons therefor
(X) applicable not applicable
In view of the expansion of its principal operations and the investment income
derived from Cathay Pacific Airways Ltd., with current oil prices unchanged, it
is anticipated that the Group's net profit at the end of next reporting
period will record a significant growth by more than 100% as compared with the
corresponding period of previous year.
3.5 Reasons for the differences between shareholders' equity at the
beginning of 2007 in the balance sheet of this Quartely Report and that as
stated in the 'Reconciliation statement of shareholders' equity prepared
under new and old accounting standards':
applicable (X) not applicable
Air China Limited
Authorised representative: Li Jiaxiang
28 April 2007
4 APPENDIX
Balance Sheet
31 March 2007
Prepared by Air China Limited
Unit: RMB (Unaudited)
Consolidated Company
Balance
Balance at Balance at Balance at at the
the end of the beginning the end of beginning
Items the period of the year the period of the year
CURRENT ASSETS:
Cash and bank balances 3,291 4,983 1,401 3,003
Trading financial assets 153 100 136 21
Bills receivable - - - -
Accounts receivable 2,739 2,664 2,389 2,397
Prepayments 341 299 347 262
Interests receivable - - - -
Dividend receivable - - - -
Other receivables 1,239 975 1,139 845
Inventories 711 704 648 641
Total current assets 8,474 9,725 6,060 7,169
Consolidated Company
Balance
Balance at Balance at Balance at at the
the end of the beginning the end of beginning
Items the period of the year the period of the year
NON-CURRENT ASSETS:
Available-for-sale financial assets - - - -
Held-to-maturity investment - - - -
Long-term receivables 208 186 208 186
Long-term equity investment 11,835 11,602 16,004 13,077
Investment property - - - -
Fixed assets 50,276 50,008 49,897 49,611
Construction in progress 9,697 9,309 9,694 9,307
Construction materials - - - -
Disposal of fixed assets - - - -
Intangible assets 519 527 519 527
Development expenses - - - -
Goodwill 1,322 132 - -
Deferred assets 39 - 38 -
Deferred income tax assets 426 513 448 535
Other non-current assets - - - -
Total non-current assets 74,322 72,277 76,808 73,243
Total assets 82,796 82,002 82,868 80,412
CURRENT LIABILITIES:
Short-term borrowings 8,971 8,017 8,938 7,974
Trading financial liabilities 38 242 38 165
Bills payable 1,363 611 1,363 611
Accounts payable 5,805 5,957 5,415 5,693
Receipts in advance 14 15 37 1
Staff remuneration payable 241 246 237 242
International air traffic liabilities 1,298 1,147 1,202 1,034
Domestic air traffic liabilities 185 384 185 384
Taxes payable 1,335 1,701 1,329 1,692
Interests payable 167 138 167 138
Dividend payable - - - -
Other payables 1,440 1,722 1,079 1,302
Non-current liabilities due
within a year 4,830 5,205 4,830 5,205
Other current liabilities - - - -
Total Current liabilities 25,687 25,385 24,820 24,441
NON-CURRENT LIABILITIES:
Long-term borrowings 11,997 9,131 11,997 9,131
Debentures payable 3,000 3,000 3,000 3,000
Long-term payables 11,388 12,385 11,193 12,163
Specific payables - - - -
Estimated liabilities 60 - 60 -
Deferred income tax liabilities - - - -
Other non-current liabilities - - - -
Total non-current liabilities 26,445 24,516 26,250 24,294
Total liabilities 52,132 49,901 51,070 48,735
OWNER'S EQUITY (OR
SHAREHOLDERS' EQUITY):
Share capital 12,251 12,251 12,251 12,251
Capital surplus 14,292 14,292 14,292 14,292
Less: treasury shares 1,247 1,247 - -
Surplus reserves 725 720 707 707
Profit available for appropriation 4,654 4,283 4,751 4,630
Currency translation differences -193 -203 -203 -203
Total equities attributable
to owners of parent company 30,482 30,096 31,798 31,677
Minority interests 182 2,005 - -
Total owners' equity 30,664 32,101 31,798 31,677
Total liabilities and owners' equity 82,796 82,002 82,868 80,412
Legal Representative of the Company: Li Jiaxiang
Person in charge of accounting function: Accountant Fan Cheng
Person in charge of accounting department: General Manager of Finance
Department Li Youqiang
Income Statement
31 March 2007
Unit: RMB million (Unaudited)
Consolidated Company
Amounts for Amounts for
the same the same
Amounts for period of Amounts for period of
Items the period last year the period last year
I.Total revenue from operation 10,471 9,849
Including: Air traffic revenue 10,200 9,620
II. Total operation cost 10,435 9,763
Including: (I) Operation cost 9,123 8,491
(II) Business taxes and
other surcharges 254 252
(III) Sale expenses 586 569
(IV) Administrative expenses 255 216
(V) Finance expenses 217 235
(VI)Impairment loss of assets
Add: (I) Gain from change
in fair value (loss is
represented by '-' sign) 257 242
(II) Investment gain (loss is
represented by '-' sign) 221 -106
III. Profit from operations
(loss is represented by '-' sign) 514 222
Add: (I) Non-operating income 1 1
Less: (II) Non-operating expenses 15 15
IV. Total profit (loss is represented
by '-' sign) 500 208
Less: Income tax expenses 97 87
V.Net profit (loss is represented by '-' sign) 403 121
Net profits attributable to owners
of parent company 423 121
* Minority interests -20
VI. Earnings per share:
(I) Basic (RMB) 0.03 0.01
(II) Diluted (RMB) 0.03 0.01
Legal Representative of the Company: Li Jiaxiang
Person in charge of accounting function: Accountant Fan Cheng
Person in charge of accounting department: General Manager of Finance
Department Li Youqiang
Cash flow statement
January-March 2007
Prepared by Air China Limited
Unit: RMB million (Unaudited)
Consolidated Company
Amounts for Amounts for
Items the period the period
I.Cash flows from operating activities:
Cash received from sales of goods, services rendered 10,189 9,711
Refund of tax and levy
Other cash received relating to operating activities 169 155
Subtotal of cash inflows of operating activities 10,358 9,866
Cash paid for goods purchased, services acquired 5,945 5,582
Cash paid to or on behalf of employees 946 827
Tax paid 810 795
Other cash paid in relation to operating activities 1,089 992
Subtotal of cash outflows of operating activities 8,790 8,196
Net cash flows from operating activities 1,568 1,670
II. Cash flows from investing activities:
Cash received from investments
Cash from investment income 35 15
Net cash from disposal of fixed assets,
intangible assets and other long-term assets 17 16
Net cash from disposal of subsidiaries
and other business units
Other cash received from investing activities 62 31
Subtotal of cash inflows of investment activities 114 62
Cash paid to purchase of fixed assets, intangible assets
and other long-term assets 2,305 2,305
Cash paid to investments 3,032 3,032
Net cash from subsidiaries and other business unit
Cash payments relating to other investments
Subtotal of cash outflows of investment activities 5,337 5,337
Net cash flows from investing activities -5,223 -5,275
III. Cash flows from financing activities:
Cash from absorbing investments
Cash received from borrowings 6,572 6,562
Other cash relating to financing activities
Subtotal of cash inflows of financing activities 6,572 6,562
Cash repaid to amounts borrowed 4,091 4,071
Cash payments for distribution of dividends,
profits or interest expenses 465 465
Other cash payments relating to financing activities
Subtotal of cash outflows of financing activities 4,556 4,536
Net cash flows from financing activities 2,016 2,026
IV.Effect of exchange rate changes on cash -16 -1
V.Net increase in cash and cash equivalents -1,655 -1,580
Add: Balance of cash and cash equivalents
at the beginning of the period 3,201 2,500
VI. Balance of cash and cash equivalents
at the end of the period 1,546 920
Legal Representative of the Company: Li Jiaxiang
Person in charge of accounting function: Accountant Fan Cheng
Person in charge of accounting department: General Manager of Finance
Department Li Youqiang
By order of the Board
Air China Limited
Zheng Baoan Li Man Kit
Joint Company Secretaries
Beijing, 30 April 2007
As at the date of this announcement, the Directors of the Company are Messrs Li
Jiaxiang, Kong Dong, Wang Shixiang, Yao Weiting, Christopher Dale Pratt, Ma
Xulun, Cai Jianjiang, Fan Cheng, Hu Hung Lick, Henry*, Wu Zhipan*, Zhang Ke* and
Jia Kang*.
* Independent non-executive Director of the Company
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