Air China Ld

Interim / Quarterly Report • Apr 29, 2022

National Storage Mechanism | Additional information

RNS Number : 8592J

Air China Ld

29 April 2022

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.

中國國際航空股份有限公司

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 OF 2022

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 28 April 2022 and passed the resolution approving the first quarterly report of 2022 of the Company for the period ended 31 March 2022 (the "Reporting Period" or "Period") prepared in accordance with the PRC Accounting Standards for Business Enterprises.

IMPORTANT NOTICE

The Board and the supervisory committee of the Company together with the directors, supervisors and the senior management of the Company guarantee that the contents of the quarterly report are true, accurate and complete and do not contain any false representation, misleading statement or material omission, and shall jointly and severally accept legal liability.

The person in charge of the Company, person in charge of accounting function and person in charge of accounting department (accounting superintendent) hereby guarantee that the financial statements set out in this quarterly report are true, accurate and complete.

Whether the first quarterly report of the Company is audited

Yes          X  No

I.       MAJOR FINANCIAL DATA

(1)     MAJOR ACCOUNTING DATA AND FINANCIAL INDICATORS

Unit: RMB'000

Items	During the Reporting Period	Increase/decrease as compared to the same period of the previous year (%)
Revenue	12,917,577	-11.41
Net profit attributable to shareholders of the listed company	-8,899,923	N/A
Net profit attributable to shareholders of the listed company after deducting non- recurring profits and losses	-8,962,346	N/A
Net cash flows from operating activities	-7,658,829	N/A
Basic earnings per share (RMB per share)	-0.65	N/A
Diluted earnings per share (RMB per share)	N/A	N/A
Weighted average return on net assets (%)	-15.64	Decreased by 7.31 percentage points

	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	293,138,034	298,415,152	-1.77
Owners' equity attributable to shareholders of the listed company	52,375,762	61,402,519	-14.70

(2)     Items and amount of non-recurring profits and losses

Unit: RMB'000

Items	Amount for the Period
Gains or losses on disposal of non-current assets	-4,081
Government subsidies recorded in the income statement for the current period (excluding those closely related to the Company's normal business and continuously entitled to in fixed amounts or quotas in accordance with the requirements of the state policy)	73,932
Gain or loss from change in fair value by holding tradable financial assets, derivative financial assets, tradable financial liabilities and derivative financial liabilities, and investment income from disposal of tradable financial assets, derivative financial assets, tradable financial liabilities and derivative financial liabilities as well as other debt investments, excluding the effective hedging businesses related with the normal operations of the Company	-657
Switch-back of impairment provisions of accounts receivable and contract assets that have undergone impairment test alone	2,892
Other non-operating income and expenses besides the above items	14,539
Less: Effect of income tax	13,589
Effect of non-controlling interests (after tax)	10,613
Total	62,423

Explanation of non-recurring profits and losses items listed in the "Interpretative Announcement for Information Disclosure of Companies That Issue Securities to the Public

No.1 - Non-recurring Profits and Losses" (《公開發行證券的公司信息披露解釋性公告

第1號－非經常性損益》) which are defined as recurring profits and losses items

Applicable           X Not applicable

(3)     Particulars of, and reasons for, changes in major accounting data and financial indicators

3   Applicable            Not applicable

Items	Percentage of Change (%)	Major Reasons
Net profit attributable to shareholders of the listed company	N/A	Mainly due to the combined effects of the domestic sporadic outbreak of the pandemic and the rising aviation fuel price
Net profit attributable to shareholders of the listed company after deducting non-recurring profits and losses	N/A	Mainly due to the combined effects of the domestic sporadic outbreak of the pandemic and the rising aviation fuel price
Net cash flows from operating activities	N/A	Mainly due to the effect of the decrease of deposits received by the finance company under the Group during the Period
Basic earnings per share (RMB per share)	N/A	Mainly due to the combined effects of the domestic sporadic outbreak of the pandemic and the rising aviation fuel price

II.      INFORMATION OF SHAREHOLDERS

(1)     Total number of holders of ordinary shares, the number of holders of preference shares with restored voting rights and the particulars of the top 10 shareholders

Unit: share

Total number of holders of ordinary shares as at the end of the Reporting Period	111,662 accounts, of which 3,022 were registered shareholders of H shares	Total number of holders of preference shares with restored voting rights as at the end of the Reporting Period (account, if any)	/

Particulars of the top 10 shareholders
Name of shareholder	Nature of shareholder	Number of shares held	Shareholding percentage	Number of shares held subject to selling restrictions	Shares pledged, marked or frozen
Status	Number
			(%)
China National Aviation Holding Corporation Limited	State-owned legal person	5,952,236,697	40.98	0	Frozen	127,445,536
Cathay Pacific Airways Limited	Foreign legal person	2,633,725,455	18.13	0	Nil	0
HKSCC NOMINEES LIMITED	Foreign legal person	1,688,204,365	11.62	0	Nil	0
China National Aviation Corporation (Group) Limited	Foreign legal person	1,556,334,920	10.72	0	Frozen	36,454,464

Particulars of the top 10 shareholders
Name of shareholder	Nature of shareholder	Number of shares held	Shareholding percentage	Number of shares held subject to selling restrictions	Shares pledged, marked or frozen
Status	Number
			(%)
China National Aviation Fuel Group Corporation	State-owned legal person	324,541,025	2.23	0	Nil	0
China Securities Finance Corporation Limited	State-owned legal person	311,302,365	2.14	0	Nil	0
Hong Kong Securities Clearing Company Ltd.	Foreign legal person	82,153,262	0.57	0	Nil	0
Agricultural Bank of China Limited - GF Balanced Preferred Hybrid Securities Investment Fund (中國農業銀行股份有限公司-廣發均衡優選混 合型證券投資基金)	Domestic non-state-owned legal person	58,402,229	0.40	0	Nil	0
Bank of China - YFD Stable Income Bond Investment Fund (中國銀行-易方達穩健收益債 券型證券投資基金)	Domestic non-state-owned legal person	42,570,400	0.29	0	Nil	0
Industrial Bank Co., Ltd. - GF Stable Preferred Six-Month Holding Period Hybrid Securities Investment Fund (興業銀行股份有限公司-廣發 穩健優選六個月持有期混合型證券投資基金)	Domestic non-state-owned legal person	32,184,214	0.22	0	Nil	0

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 Corporation Limited	5,952,236,697	RMB ordinary shares	5,952,236,697
Cathay Pacific Airways Limited	2,633,725,455	Overseas listed foreign shares	2,633,725,455
HKSCC NOMINEES LIMITED	1,688,204,365	Overseas listed foreign shares	1,688,204,365
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	324,541,025	RMB ordinary shares	324,541,025
China Securities Finance Corporation Limited	311,302,365	RMB ordinary shares	311,302,365
Hong Kong Securities Clearing Company Ltd.	82,153,262	RMB ordinary shares	82,153,262
Agricultural Bank of China Limited - GF Balanced Preferred Hybrid Securities Investment Fund (中國農業銀行股份有限公司-廣發均衡優選混合型證券投資基金)	58,402,229	RMB ordinary shares	58,402,229
Bank of China - YFD Stable Income Bond Investment Fund (中國銀行-易方達穩健收益債券型證券投資基金)	42,570,400	RMB ordinary shares	42,570,400
Industrial Bank Co., Ltd. - GF Stable Preferred Six-Month Holding Period Hybrid Securities Investment Fund (興業銀行股份有限公司-廣發穩健優選 六個月持有期混合型證券投資基金)	32,184,214	RMB ordinary shares	32,184,214
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 Corporation Limited. Accordingly, China National Aviation Holding Corporation Limited is directly and indirectly interested in 51.70% of the shares of the Company.
Explanation on the participation of the top 10 shareholders and the top 10 shareholders not subject to selling restrictions in margin financing and securities lending as well as margin and securities refinancing business (if any)	Nil

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 1,688,204,365 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 SASAC, China Securities Regulatory Commission and the National Council for Social Security Fund, 127,445,536 and 36,454,464 shares held by China National Aviation Holding Corporation Limited, the controlling shareholder of the Company, and China National Aviation Corporation (Group) Limited respectively are frozen at present.

III.    OTHER ALERTS

Other important information that needs to be brought to the attention of investors regarding the Company's operations during the Reporting Period

Applicable          X Not applicable

IV.    QUARTERLY FINANCIAL STATEMENTS

(1)     Type of audit opinion

Applicable          X Not applicable

(2)     Financial statements

CONSOLIDATED BALANCE SHEET

31 March 2022

Prepared by Air China Limited

Unit: RMB'000 (Unaudited)

Items	31 March 2022	31 December 2021
CURRENT ASSETS:
Cash and bank balance	11,953,983	16,709,664
Provisions on payables
Contributions made
Financial assets held-for-trading	3,500	4,157
Derivative financial assets
Bills receivable	1,193	3,591
Accounts receivable	1,565,549	2,991,037
Receivables financing
Prepayments	598,670	440,274
Premium receivable
Receivables on reinsurance
Provisions for reinsurance contracts
Other receivables	3,466,217	3,191,247
Including: Interest receivable
Dividend receivable
Purchase of financial assets resold
Inventories	2,611,116	2,050,282
Contract assets
Held-for-sale assets	111,502	333,884
Non-current assets due within a year
Other current assets	5,703,688	4,672,592
Total current assets	26,015,418	30,396,728

Items	31 March 2022	31 December 2021
NON-CURRENT ASSETS:
Loans and advances
Debt investments
Other debt investments	1,329,109	1,373,634
Long-term receivables	552,506	574,646
Long-term equity investments	11,125,478	12,081,091
Investments in other equity instruments	157,396	178,366
Other non-current financial assets
Investment properties	127,210	128,782
Fixed assets	83,721,874	85,009,447
Construction in progress	33,915,102	34,862,651
Biological assets for production
Oil and gas assets
Right-of-use assets	121,067,139	119,213,535
Intangible assets	3,502,815	3,544,175
Development expenses
Goodwill	1,102,185	1,102,185
Long-term deferred expenses	234,267	249,358
Deferred tax assets	10,287,535	9,700,554
Other non-current assets
Total non-current assets	267,122,616	268,018,424
Total assets	293,138,034	298,415,152
CURRENT LIABILITIES:
Short-term loans	19,442,120	22,001,916
Short-term financing bonds payable	11,880,363	12,332,635
Borrowings from central bank
Contributions received
Financial liabilities held-for-trading
Derivative financial liabilities
Bills payable	377,793	199,276
Accounts payable	14,405,302	13,307,360
Air traffic liabilities	1,926,792	2,116,028
Receipts in advance
Contract liabilities	1,705,498	1,479,717
Sale of financial assets repurchased
Deposits from clients and placements from other banks
Brokerage payable
Underwriting fees payable
Employee compensations payable	2,776,794	3,502,384
Taxes payable	138,485	166,085
Other payables	16,195,803	17,239,846
Including: Interest payable
Dividend payable
Fees and commissions payable
Amounts payable on reinsurance
Held-for-sale liabilities
Non-current liabilities due within a year	24,080,838	19,070,477
Other current liabilities
Total current liabilities	92,929,788	91,415,724

Items	31 March 2022	31 December 2021
NON-CURRENT LIABILITIES:
Reserves on insurance contracts
Long-term loans	48,114,323	43,620,468
Debentures payable	7,492,253	9,499,579
Including: Preference shares
Perpetual bonds
Lease liabilities	77,056,885	76,347,051
Long-term payables	5,749,470	5,656,909
Long-term employee compensation payables	220,736	218,336
Accrued liabilities	3,136,799	3,147,357
Deferred income	533,592	544,383
Deferred tax liabilities	326,954	328,063
Other non-current liabilities	1,721,906	1,772,209
Total non-current liabilities	144,352,918	141,134,355
Total liabilities	237,282,706	232,550,079
OWNERS' EQUITY (OR SHAREHOLDERS' EQUITY):
Paid-up capital (or share capital)	14,524,815	14,524,815
Other equity instruments
Including: Preference shares
Perpetual bonds
Capital reserve	26,270,841	26,270,841
Less: Treasury shares
Other comprehensive income	-532,143	-405,309
Special reserves
Surplus reserves	11,564,287	11,564,287
General risk provisions	131,916	131,916
Retained earnings	416,046	9,315,969
Total owners' equity (or shareholders' equity) attributable to the parent company	52,375,762	61,402,519
Non-controlling interests	3,479,566	4,462,554
Total owners' equity (or shareholders' equity)	55,855,328	65,865,073
Total liabilities and owners' equity (or shareholders' equity)	293,138,034	298,415,152

Person in charge of the Company: Mr. Song Zhiyong Person in charge of accounting function: Mr. Xiao Feng

Person in charge of accounting department: Mr. Zhan Zhong

CONSOLIDATED INCOME STATEMENT

January to March 2022

Prepared by Air China Limited

Unit: RMB'000 (Unaudited)

Items	First quarter of 2022	First quarter of 2021
I.       Total revenue from operations	12,917,577	14,580,678
Including: Operating income	12,917,577	14,580,678
Interest income
Premium earned
Fees and commission income
II.     Total operating cost	23,144,688	23,098,558
Including: Operating costs	19,688,533	19,241,297
Interest expenses
Fees and commission expenses
Returned premium
Net reimbursement paid
Net amounts of provisions on insurance obligations drawn
Bonus paid on insurance policy
Reinsurance premium
Taxes and other levies	52,195	58,856
Selling expenses	1,048,349	1,095,861
General and administrative expenses	1,066,408	1,056,567
R&D expenses	38,099	30,249
Finance expenses	1,251,104	1,615,728
Including: Interest expenses	1,500,782	1,313,417
Interest income	29,366	8,188
Add:         Other income	613,591	913,601
Investment income (loss is represented by "-" sign)	-842,440	-1,047,673
Including: Share of profits of associates and joint ventures	-853,876	-1,062,546
Gains on derecognition of financial assets measured at amortised cost
Exchange gains (loss is represented by "-" sign)
Gains from net exposure to hedging (loss is represented by "-" sign)
Gains from changes in fair value (loss is represented by "-" sign)	-657
Impairment loss of credit (loss is represented by "-" sign)	4,948	-5,228
Impairment loss of assets (loss is represented by "-" sign)
Gains from disposal of assets (loss is represented by "-" sign)	1,193	-914

Items	First quarter of 2022	First quarter of 2021
III.    Profit from operations (loss is represented by "-" sign)	-10,450,476	-8,658,094
Add: Non-operating income	27,255	27,204
Less: Non-operating expenses	17,989	7,119
IV.    Total profit (total loss is represented by "-" sign)	-10,441,210	-8,638,009
Less: Income tax expenses	-569,551	-1,690,959
V.      Net profit (net loss is represented by "-" sign)	-9,871,659	-6,947,050
(I)  Classified by continuity of operations
1.    Net profit from continuing operations (net loss is represented by "-" sign)	-9,871,659	-6,947,050
2.    Net profit from discontinued operation (net loss is represented by "-" sign)
(II) Classified by ownership
1.    Net profits attributable to shareholders of the parent company (net loss is represented by "-" sign)	-8,899,923	-6,207,790
2.    Profit or loss attributable to non-controlling interests (net loss is represented by "-" sign)	-971,736	-739,260
VI.    Other comprehensive income after tax, net	-138,086	82,705
(I) Other comprehensive income after tax attributable to owners of the parent company, net	-126,834	89,375
1.    Other comprehensive income that cannot be subsequently reclassified to profit or loss	-8,021	-1,854
(1) Changes arising on remeasurement of defined benefit plans
(2) Other comprehensive income accounted for using the equity method that cannot be reclassified to profit or loss
(3) Change in fair value of investments in other equity instruments	-8,021	-1,854
(4) Change in fair value of own credit risk of the Company
2.    Other comprehensive income that will be reclassified to profit or loss	-118,813	91,229
(1) Other comprehensive income accounted for using the equity method that may be reclassified to profit or loss
(2) Change in fair value of other debt investments		-1,945
(3) Amount of financial assets reclassified into other comprehensive income
(4) Provisions for credit impairment of other debt investments		-2,387
(5) Reserve for cash flow hedging
(6) Exchange difference on translation of financial statements in foreign currency	-118,813	95,561
(7) Others
(II) Other comprehensive income after tax attributable to non-controlling interests, net	-11,252	-6,670

Items	First quarter of 2022	First quarter of 2021
VII.   Total comprehensive income	-10,009,745	-6,864,345
(I) Total comprehensive income attributable to owners of the parent company	-9,026,757	-6,118,415
(II) Total comprehensive income attributable to non-controlling interests	-982,988	-745,930
VIII. Earnings per share:
(I)  Basic earnings per share (RMB per share)	-0.65	-0.45
(II) Diluted earnings per share (RMB per share)	N/A	N/A

For business combination under common control during the Period, the net profit of merged party before the business combination is Nil, and the net profit of the merged party for the last period is Nil.

Person in charge of the Company: Mr. Song Zhiyong 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 2022

Prepared by Air China Limited

Unit: RMB'000 (Unaudited)

Items	First quarter of 2022	First quarter of 2021
I.      Cash flows from operating activities:
Cash received from sales of goods and provision of services	14,657,731	14,380,541
Net increase in deposits from clients and placements from banks
Net increase in borrowings from central bank
Net increase in contributions received from 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
Cash received from interest, fees and commission
Net increase in contributions received
Net increase in cash from repurchase operations
Net cash receipt from securities trading as agent
Refund of taxes and levies	9,761	4,636
Other cash received relating to operating activities	1,204,029	1,624,412
Subtotal of cash inflows of operating activities	15,871,521	16,009,589
Cash paid for goods purchased and services received	9,480,709	8,587,763
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
Net increase in contributions made
Cash paid for interest, fees and commissions
Cash paid for bonus paid on insurance policy
Cash paid to or on behalf of employees	6,550,937	6,584,075
Taxes and levies paid	236,815	266,475
Other cash paid relating to operating activities	7,261,889	1,825,572
Subtotal of cash outflows from operating activities	23,530,350	17,263,885
Net cash flows from operating activities	-7,658,829	-1,254,296

Items	First quarter of 2022	First quarter of 2021
II.     Cash flows from investing activities:
Cash received from sale and redemption of investments	30,061	722,905
Cash received from investment income	22,064	291
Net cash proceeds from disposal of fixed assets, intangible assets and other long-term assets	233,921	8,251
Net cash proceeds from disposal of subsidiaries and other business units
Other cash received relating to investing activities	76,675	31,118
Subtotal of cash inflows from investing activities	362,721	762,565
Cash paid for purchase and construction of fixed assets, intangible assets and other long-term assets	1,466,844	562,481
Cash paid for investments	794,343	50,000
Net increase in secured loans
Net cash payments for acquisition of subsidiaries and other business units
Other cash paid relating to investing activities	1,554	6,758
Subtotal of cash outflows from investing activities	2,262,741	619,239
Net cash flows from investing activities	-1,900,020	143,326
III. Cash flows from financing activities:
Cash received from issuance of debentures	5,750,000	700,000
Cash received from capital injection		490,148
Including: Cash received from capital injection of non-controlling shareholders in subsidiaries		490,148
Cash received from borrowings	15,029,966	13,650,876
Other cash received relating to financing activities
Subtotal of cash inflows from financing activities	20,779,966	14,841,024
Cash paid for repayment of borrowings	7,581,824	4,219,254
Cash paid for repayment of debentures	3,250,000	1,000,000
Cash paid for distribution of dividends, profits or payment of interest expenses	1,588,383	1,564,579
Including: Dividends and profits paid to non-controlling shareholders by subsidiaries
Other cash paid relating to financing activities	3,516,104	3,616,317
Subtotal of cash outflows from financing activities	15,936,311	10,400,150
Net cash flows from financing activities	4,843,655	4,440,874

Items	First quarter of 2022	First quarter of 2021
IV.   Effect of exchange rate changes on cash and cash equivalents	-7,693	23,666
V.     Net increase in cash and cash equivalents	-4,722,887	3,353,570
Add: Balance of cash and cash equivalents as at the beginning of the Period	15,934,713	5,837,998
VI.   Balance of cash and cash equivalents as at the end of the Period	11,211,826	9,191,568

Person in charge of the Company: Mr. Song Zhiyong Person in charge of accounting function: Mr. Xiao Feng

Person in charge of accounting department: Mr. Zhan Zhong

Particulars in relation to adjustments made to the financial statements as at the beginning of the year for the initial implementation of New Accounting Standards since 2022

Applicable           X Not applicable

By Order of the Board

Air China Limited

Huang Bin         Huen Ho Yin

Joint Company Secretaries

Beijing, the PRC, 28 April 2022

As at the date of this announcement, the directors of the Company are Mr. Song Zhiyong, Mr. Ma Chongxian, Mr. Feng Gang, Mr. Patrick Healy, Mr. Li Fushen*, Mr. He Yun*, Mr. Xu Junxin* and Ms. Winnie Tam Wan-chi*.

*        Independent non-executive director of the Company

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