Part 1 Performance Highlights. Part 2 Business Overview

Transcription

1 August

2 Part 1 Performance Highlights Part 2 Business Overview Part 3 Financial Review Part 4 Outlook 2 Under IFRS

3 3 Part 1 Performance Highlights

4 Performance Highlights - Key Operational Metrics ATK (million) RTK (million) ATK Load Factor (%) 17, % 12, % pts ASK (million) RPK (million) Passenger Load Factor (%) 118, % 96, % pts 4

5 Performance Highlights - Key Financial Metrics In RMB and YoY changes Turnover (million) Operating Expenses (million) Jet Fuel Cost (million) 58, % 52, % 13, % Net Income of Foreign Exchange (million) Profit Before Tax (million ) Net Profit (million) 1, % 5, % 3, % 5

6 6 Part 2 Business Overview

7 Air China Total 2017Interim YoY change Domestic 2017Interim YoY change Revenue (RMB million) 36, % ASK (million) 84, % RPK (million) 68, % Load Factor (%) pts Yield (RMB/RPK) % Revenue (RMB million) 22, % ASK (million) 42, % RPK (million) 35, % Load Factor (%) pts Yield (RMB/RPK) % International 2017Interim YoY change Regional (HK, Macau and Taiwan) 2017Interim YoY change Revenue (RMB million) 12, % ASK (million) 39, % RPK (million) 30, % Load Factor (%) pts Yield (RMB/RPK) % Revenue (RMB million) 1, % ASK (million) 2, % RPK (million) 1, % Load Factor (%) pts Yield (RMB/RPK) % 7

8 8 Refined Market Strategies with a Balanced Global Network As of June 30, 2017 Air China operates 408 passenger routes across 6 continents covering 39 countries & 184 cities around the world. 287 domestic routes covering 115 domestic destinations 106 international routes covering 66 international destinations 15 regional routes covering 3 regional destinations Through Star Alliance, Air China has an extensive network covering 1,307 destinations in 191 countries.

9 Further Development of Air Transport Hubs Beijing Hub launched new routes to Zurich, Astana Championed the Shanghai international gateway, Chengdu and Shenzhen regional hub network. The route network will continue to expand, with new international and domestic routes such as, Shanghai to Barcelona, Chengdu to Shihezi to Yining. Update as of v2 9

10 Leading the industry in yield management Effective execution of price priority strategy with a commanding competitive advantage in domestic yield Increased wide-body aircraft deployment to major domestic markets drives overall domestic yield increase Optimized premium classes pricing of domestic flights, developed the breadth and depth of customers resource and further enhanced overall yield Commenced collaboration with Lufthansa on joint route operations Expanded international to international transit products to achieve a steady increase in passenger traffic. 10

11 A Passenger Base that is Most Valuable PhoenixMiles Members As of end of June 2017, members reached million. The number of active members exceeded 20% increase compare to same period last year. Income from Frequent Flyers Grew 23% YoY Income % from Frequent Flyers Grew 5 pts YoY RMB 100 Million H2016 1H % 56% 44% 40 61% 0 1H2016 1H2017 Income % 常旅客收入占比 from frequent flyers 其他 Others 11

12 A Passenger Base that is Most Valuable RMB 100 Million Revenue from Premium Classes Continued to Increase % 8% 7 0 1% 国内 Domestic International 国际 Regional 地区 1H2016 1H2017 Passenger Load Factor of Premium Classes Continued to Increase 80 % 60 9pts 8pts 4pts 国内 Domestic International 国际 Regional 地区 1H2016 1H

13 Business Model Transformation & Upgrade : Ancillary Income Ancillary Income Continued to Grow Year-on-Year RMB Ten Thousand % H2016 1H2016 1H2017 1H2017 RMB Ten Thousand 73% % Paid 付费升舱 Upgrades 1H2016 1H2017 Seat 付费选座 Selection Fees 13

14 Air China Cargo 1H2017 YoY Change AFTK (million) 5, % Freighter AFTK (million) 1, % RFTK (million) 3, % Freighter RFTK (million) 1, % Tonnage Carried (tonne) 692, % Freighter Tonnage Carried (tonne) 215, % Load Factor (%) pts Freighter Load Factor (%) pts Yield (RMB/RFTK) % 14

15 Shenzhen Airlines 1H2017 YoY Change ASK (million) 29, % RPK (million) 23, % ATK (million) 3, % As of June 30, 2017, the total fleet size of Shenzhen Airline (including Kunming Airline) was 187 aircraft, with an average age of 6.2 years. In 1H 2017, revenue reached RMB 13.3 billion, representing an increase of 7.20% compared to the same period last year RTK (million) 2, % Passenger Load Factor(%) pts Net profits attributable to equity shareholders achieved RMB 851 million, representing an increase of 10.04% compared to the same period last year ATK Load Factor(%) pts Passenger Yield (RMB/RPK) % 15

16 16 Part 3 Financial Review

17 17 Industry Leading Profitability Maintained Despite Intensified Competition RMB million 1H2017 1H2016 YoY Change Turnover 58,746 53, % Air Traffic Revenue 55,539 51, % Operating Expenses 52,939 45, % Operating Expenses ex-fuel cost 39,310 36, % Profit from Operations 5,808 7, % Finance Income 1, ,999.83% Finance Cost 1,592 3, % Net Income of Foreign Exchange 1,270-1, % Share of Profit of Associates % Profit for the Period 3,921 3, % Profit Attributable to Shareholders 3,341 3, % EPS (RMB Yuan/share) %

18 18 Interest Bearing Debt (1) (RMB million) 30 June 2017 Percentage(%) 31 December 2016 Percentage(%) USD 42, , RMB 51, , EURO JPY 1, , MOP Total 95, , Sensitivity Analysis RMB/USD 1% Fluctuation of exchange rate Impact on Net Profit: 291 million (RMB)

19 Interest Bearing Debt (2) 31 December June % 29.34% 69.80% 70.66% Short term Interest 短期带息负债 Bearing Debt Long term Interest 长期带息负债 Bearing Debt 31 December June 2017 Sensitivity Analysis 45.93% 54.07% 40.60% 59.40% Change of Interest rate- 50bp Impact on Interest Expense: 1.09 million (RMB) Fixed rate debt Floating rate debt 19

20 Enhanced Operational Efficiency, Disciplined Cost Management 1H2017 Depreciation 12.4% Take-off, landing and depot charges 13.6% Jet Fuel 25.7% Maintenance 5.9% Staff 19.9% Others 15.2% Air Catering 3.1% Sales and marketing expenses 4.1% General and administrative expenses 1.2% (RMB million) 1H2017 1H2016 YoY Change Jet Fuel 13,629 9, % Take-off, landing and depot charges 6,657 6, % Depreciation 6,538 6, % Maintenance 3,112 2, % Staff 10,526 9, % 1H2016 Depreciation 14.5% Take-off, landing and depot charges 13.4% Maintenance 5.5% Jet Fuel 21.2% Staff 20.5% Air Catering 3.4% Sales and marketing expenses 4.5% Others 16.0% General and administrative expenses 1.1% Air Catering 1,639 1, % Sales and marketing expenses General and administrative expenses 2,166 2, % % Others 8,023 7, % Total 52,939 45, % 20

21 Jet Fuel Unit Cost Increased Year-on-Year Jet Fuel Cost and Jet Fuel Surcharge RMB billion H2016 1H2017 Fuel Cost 燃油成本 Jet 燃油附加费 Fuel Surcharge Changes in Jet Fuel Purchase Price Jet Fuel Consumption Amount Ten Thousand Tonnes H2016 1H2017 Sensitivity Analysis RMB / Tonne 6,000 1H2017 4,500 3,000 1,500 1H2016 Oil Price Changes: 1USD/Barrel Impact on Jet Fuel Cost: 346 million (RMB) 0 1 Jan 月 Feb 2 月 3 Mar 月 Apr 4 月 May 5 月 May Jun 6 月 21

22 Strengthened Cost Controls Fuel Cost and Non-fuel Operating Cost Unit Cost RMB million 100,000 98,708 97,612 91,064 94,062 94,505 21,982 80,000 34,542 24,043 35,640 33,722 60,000 40,000 55,424 60,340 64,165 70,463 75,630 20,000 52,939 45,987 13,629 9,727 36,260 39,310 RMB Yuan % 100% H2016 1H2017 Fuel 燃油成本 Cost Operating 去除燃油成本的营业成本 Cost exclude Fuel Cost Cost as Percentage of Revenue 91.55% 95.81% 93.15% 85.87% 84.77% 85.19% 90.11% H2016 1H2017 可用客公里单位成本 Cost per ASK 可用吨公里单位成本 Cost per ATK Ex-fuel Unit Cost RMB Yuan % 60% 55.72% 61.46% 60.55% 64.02% 65.68% 67.17% 66.91% % H2016 1H2017 Operating Cost as % of 经营费用所占收入的比重 Revenue Ex-fuel Operating Cost as % of Revenue H2016 1H2017 可用客公里单位成本 Cost per ASK 可用吨公里单位成本 Cost per ATK 22

23 23 Healthy Financial Position Times Net Debt-to-Equity Ratio H2017 Times EBITDA Interest Coverage Ratio ,000 60,000 30,000 % RMB million Gearing Ratio Net Assets (Excluding Minority shareholder Interests) 49,944 53,757 54,274 59,748 68, H , H2016 1H H2017

24 24 Part 4 Outlook

25 2017 Outlook Passenger travel demands to grow steadily Industry competition will progressively intensify Emerging signs of growth pick-up in air cargo market Jet Fuel price continues to be volatile Stay focus on hub network strategy Upgrade business model transformation Deepen the advancement of State-owned Enterprise reform Continue to Heighten cost control 25

26 Appendix Other Financial and Operational Data 1H

27 1. Fleet - The Group Sub-total Selfowned 30 June 2017 Delivery Finance Lease Operating Lease Average Age A A320/A A A B B B B B747F B757F B777F Business Jet TOTAL *Wet lease aircraft excluded in calculation of average ages 27

28 2. Fleet - Air China Sub-total Selfowned 30 June 2017 Delivery Finance Lease Operating Lease Average Age A A320/A A A B B B B Total *Wet lease aircraft excluded in calculation of average ages 28

29 3. Profit Index 1H2017 1H2016 YoY Change EBITDA (RMB million) 12,346 14, % EBITDA Profit Margin 21.02% 27.17% -6.16pts EBITDAR (RMB million) 16,502 18, % EBITDAR Profit Margin 28.09% 33.66% -5.57pts Net Profit Margin 5.69% 6.42% -0.74pts Return on Net Assets 4.46% 5.65% -1.19pts 29

30 4. Consolidated Balance Sheet (Condensed) (RMB million) 30 June December 2016 YoY Change Non-current Assets 155, , % Current Assets 24,822 19, % - Cash and Cash Equivalents 11,135 6, % Total Assets 229, , % Current Liabilities 64,012 64, % Non-current Liabilities 75,968 83, % Total Liabilities 139, , % Total Equity Attributable to Shareholders of the Company 81,053 68, % 30

31 5. Consolidated Cash Flow Statement (Condensed) (RMB million) 1H2017 1H2016 Net cash generated from operating activities YoY Change 9,087 11, % Net cash used in investing activities 5,185 14, % Net cash used in financing activities 446 4, % Net increase in cash and cash equivalents 4, % Cash and cash equivalents at beginning of the period Effect of exchange rate changes on cash and cash equivalents Cash and cash equivalents at the end of the period 6,848 7, % % 11,135 7, % 31

32 6. Subsidiaries Air Macau 1H2017 YoY Change ASK (million) 3, % RPK (million) 2, % ATK (million) % RTK (million) % Passenger Load Factor(%) pt ATK Load Factor(%) pts Passenger Yield (RMB/RPK) % 32

33 Investor Relations-Beijing Bian Hong Tel: Fax: Fan Heyun Tel: Fax: Air China Website: Air China Mobile APP: Cao Yu Tel: Fax: