Indicate by check mark whether the registrant files or will
file annual reports under cover of Form 20-F or Form 40-F:
x
Form 20-F
¨
Form
40-F
Indicate by check mark if the registrant is submitting the Form
6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
¨
Indicate by check mark if the registrant is submitting the Form
6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
¨
Indicate by check mark whether the registrant by furnishing
the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b)
under the Securities Exchange Act of 1934:
¨
Yes
x
No
If "Yes" is marked, indicate below the file number
assigned to the registrant in connection with Rule 12g3-2(b):
n/a
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
China Eastern Airlines Corporation
Limited (the “
Company
”), a joint stock company limited by shares, was incorporated in the People’s Republic
of China (the “
PRC
”) on 14 April 1995. The address of the Company’s registered office is 66 Airport Street,
Pudong International Airport, Shanghai, the PRC. The Company and its subsidiaries (together, the “
Group
”) are
principally engaged in the operation of civil aviation, including the provision of passenger, cargo, mail delivery, tour operations
and other extended transportation services.
The Company is majority owned
by China Eastern Air Holding Company (“
CEA Holding
”), a state- owned enterprise incorporated in the PRC.
The Company’s shares are
traded on The Shanghai Stock Exchange, The Stock Exchange of Hong Kong Limited and The New York Stock Exchange.
This condensed consolidated interim financial
information was approved for issue by the Company’s Board on 30 August 2013.
This condensed consolidated interim financial
information has not been audited.
This unaudited condensed consolidated
interim financial information for the six months ended 30 June 2013 has been prepared in accordance with International Accounting
Standard (“
IAS
”) 34 “Interim Financial Reporting”. The unaudited condensed consolidated interim
financial information should be read in conjunction with the annual financial statements for the year ended 31 December 2012,
which have been prepared in accordance with International Financial Reporting Standards (“
IFRS
”) as issued
by the International Accounting Standard Board (“
IASB
”).
In preparing the interim financial information,
the Directors have given careful consideration to the going concern status of the Group in the context of the Group’s current
working capital deficit.
As at 30 June 2013, the Group’s accumulated
losses were approximately RMB4.35 billion; its current liabilities exceeded its current assets by approximately RMB33.56 billion.
CHINA EASTERN AIRLINES
CORPORATION LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
|
|
2.
|
BASIS
OF PREPARATION
(cont’d)
|
Against this background, the Directors
have taken active steps to seek additional sources of finance and improve the Group’s liquidity position. As at 30 June 2013,
the Group had total unutilised credit facilities of approximately RMB20.48 billion from certain banks.
With the credit facilities and based on
the Group’s history of obtaining finance and its relationships with its bankers and creditors, the Board considers that the
Group will be able to obtain sufficient financing to enable it to operate, as well as to meet its liabilities as and when they
become due, and the capital expenditure requirements. Accordingly, the Board believes that it is appropriate to prepare these financial
information on a going concern basis without including any adjustments that would be required should the Company and the Group
fail to continue as a going concern.
The accounting policies adopted in the
preparation of the condensed consolidated interim financial information are consistent with those followed in the preparation of
the Group’s annual consolidated financial statements for the year ended 31 December 2012, except for the adoption of new
standards and interpretations effective as of 1 January 2013.
The Group applies, for the
first time, certain standards and amendments that require restatement of previous financial statements. These include IFRS 10
Consolidated Financial Statements, IFRS 11 Joint Arrangements, IAS 19 (Revised 2011) Employee Benefits, IFRS 13 Fair Value
Measurement and amendments to IAS 1 Presentation of Financial Statements. As required by IAS 34, the nature and the effect of
these changes are disclosed below. In addition, the application of IFRS 12 Disclosure of Interest in Other Entities would
result in additional disclosures in the annual consolidated financial statements.
Several other new standards and amendments
apply for the first time in 2013. However, they do not impact the annual consolidated financial statements of the Group or the
interim condensed consolidated financial statements of the Group.
INTERIM REPORT 2013
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
|
|
3.
|
ACCOUNTING
POLICIES
(cont’d)
|
The nature and the impact of each new
standard/amendment is described below:
IAS 1 Presentation of Items
of Other Comprehensive Income – Amendments to IAS 1
The amendments to IAS 1 introduce a grouping
of items presented in other comprehensive income (OCI). Items that could be reclassified (or recycled) to profit or loss at a future
point in time (e.g. net movement on cash flow hedges and net loss or gain on available-for-sale financial assets) now have to be
presented separately from items that will never be reclassified (e.g., actuarial gains and losses on defined benefit plans). The
amendment affected presentation only and had no impact on the Group’s financial position or performance.
IAS 1 Clarification of the
Requirement for Comparative Information (Amendment)
The amendment to IAS 1
clarifies the difference between voluntary additional comparative information and the minimum required comparative
information. An entity must include comparative information in the related notes to the financial statements when it
voluntarily provides comparative information beyond the minimum required comparative period. The additional voluntarily
comparative information does not need to be presented in a complete set of financial statements.
An opening statement of financial position
(known as the ‘third balance sheet’) must be presented when an entity applies an accounting policy retrospectively,
makes retrospective restatements, or reclassifies items in its financial statements, provided any of those changes has a material
effect on the statement of financial position at the beginning of the preceding period. The amendment clarifies that a third balance
sheet does not have to be accompanied by comparative information in the related notes. Under IAS 34, the minimum items required
for interim condensed financial statements do not include a third balance sheet.
IAS 32 Tax Effects of Distributions
to Holders of Equity Instruments (Amendment)
The amendment to IAS 32 Financial Instruments: Presentation clarifies that
income taxes arising from distributions to equity holders are accounted for in accordance with IAS 12 Income Taxes. The
amendment removes existing income tax requirements from IAS 32 and requires entities to apply the requirements in IAS 12 to
any income tax arising from distributions to equity holders. The amendment did not have an impact on the interim condensed
consolidated financial statements for the Group, as there is no tax consequences attached to cash or non-cash
distribution.
CHINA EASTERN AIRLINES
CORPORATION LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
|
|
3.
|
ACCOUNTING
POLICIES
(cont’d)
|
IAS 34 Interim Financial
Reporting and Segment Information for Total Assets and Liabilities (Amendment)
The amendment clarifies the
requirements in IAS 34 relating to segment information for total assets and liabilities for each reportable segment to
enhance consistency with the requirements in IFRS 8 Operating Segments. Total assets and liabilities for a reportable segment
need to be disclosed only when the amounts are regularly provided to the chief operating decision maker and there has been a
material change in the total amount disclosed in the entity’s previous annual consolidated financial statements for
that reportable segment.
IAS 19 Employee Benefits
(Revised 2011) (IAS 19R)
IAS 19R includes a number of amendments
to the accounting for defined benefit plans, including actuarial gains and losses that are now recognised in other comprehensive
income (OCI) and permanently excluded from profit and loss; expected returns on plan assets that are no longer recognised in profit
or loss, instead, there is a requirement to recognise interest on the net defined benefit liability (asset) in profit or loss,
calculated using the discount rate used to measure the defined benefit obligation, and; unvested past service costs are now recognised
in profit or loss at the earlier of when the amendment occurs or when the related restructuring or termination costs are recognised.
Other amendments include new disclosures, such as quantitative sensitivity disclosures.
The effect of the adoption of IAS 19R is
explained in Note 21.
IFRS 7 Financial Instruments:
Disclosures Offsetting Financial Assets and Financial Liabilities – Amendments to IFRS 7
The amendment requires an entity to disclose
information about rights to set-off financial instruments and related arrangements (e.g., collateral agreements). The disclosures
would provide users with information that is useful in evaluating the effect of netting arrangements on an entity’s financial
position. The new disclosures are required for all recognised financial instruments that are set off in accordance with IAS 32.
The disclosures also apply to recognised financial instruments that are subject to an enforceable master netting arrangement or
similar agreement, irrespective of whether the financial instruments are set off in accordance with IAS 32. As the Group is not
setting off financial instruments in accordance with IAS 32 and does not have relevant offsetting arrangements, the amendment does
not have an impact on the Group.
INTERIM REPORT 2013
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
|
|
3.
|
ACCOUNTING
POLICIES
(cont’d)
|
IFRS 10 Consolidated Financial
Statements and IAS 27 Separate Financial Statements
IFRS 10 establishes a single control model
that applies to all entities including special purpose entities. IFRS 10 replaces the parts of previously existing IAS 27 Consolidated
and Separate Financial Statements that dealt with consolidated financial statements and SIC-12 Consolidation – Special Purpose
Entities. IFRS 10 changes the definition of control such that an investor controls an investee when it is exposed, or has rights,
to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the
investee. To meet the definition of control in IFRS 10, all three criteria must be met, including: (a) an investor has power over
an investee; (b) the investor has exposure, or rights, to variable returns from its involvement with the investee; and (c) the
investor has the ability to use its power over the investee to affect the amount of the investor’s returns. IFRS 10 had no
impact on the consolidation of investments held by the Group.
IFRS 11 Joint Arrangements
and IAS 28 Investment in Associates and Joint Ventures
IFRS 11 replaces IAS 31 Interests in Joint
Ventures and SIC-13 Jointly-controlled Entities – Non- monetary Contributions by Venturers. IFRS 11 removes the option to
account for jointly controlled entities (JCEs) using proportionate consolidation. Instead, JCEs that meet the definition of a joint
venture under IFRS 11 must be accounted for using the equity method. IFRS 11 had no impact on the Group’s or the Company’s
financial statements.
IFRS 12 Disclosure of Interests
in Other Entities
IFRS 12 sets out the requirements for disclosures
relating to an entity’s interests in subsidiaries, joint arrangements, associates and structured entities. None of these
disclosure requirements are applicable for interim condensed consolidated financial statements, unless significant events and transactions
in the interim period require that they are provided. Accordingly, the Group has not made such disclosures.
CHINA EASTERN AIRLINES CORPORATION LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
|
|
3.
|
ACCOUNTING
POLICIES
(cont’d)
|
IFRS 13 Fair Value Measurement
IFRS 13 establishes a
single source of guidance under IFRS for all fair value measurements. IFRS 13 does not change when an entity is required to
use fair value, but rather provides guidance on how to measure fair value under IFRS when fair value is required or
permitted. The application of IFRS 13 has not materially impacted the fair value measurements carried out by the Group.
IFRS 13 also requires specific disclosures
on fair values, some of which replace existing disclosure requirements in other standards, including IFRS 7 Financial Instruments:
Disclosures. Some of these disclosures are specifically required for financial instruments by IAS 34.16A(j), thereby affecting
the interim condensed consolidated financial statements period.
In addition to the above-mentioned amendments
and new standards, IFRS 1 First-time Adoption of International Financial Reporting Standards was amended with effect for reporting
periods starting on or after 1 January 2013. The Group is not a first-time adopter of IFRS; therefore, this amendment is not relevant
to the Group.
The Group has not early adopted any other
standard, interpretation or amendment that has been issued but is not yet effective.
The preparation of interim financial information
requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
In preparing these condensed consolidated
interim financial information, the significant judgments made by management in applying the Group’s accounting policies and
the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the
year ended 31 December 2012.
INTERIM REPORT 2013
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
Changes in accounting estimate
The Group monitors the sales advance of
carriage on a periodic basis and recognises the traffic revenue once the related transportation responsibility is eliminated. Based
on the enhanced monitoring on the international air traffic liabilities, it appears there is remote possibility for the Group to
render the international transportation services for the unused tickets for more than two years. Consequently, the Group decided
to change the point of time to recognise the traffic revenue for unused tickets relating to international transportation services.
Before the change, the Group recognises the traffic revenue for unused tickets relating to international transportation services
for more than three years. After the change, the Group recognises the traffic revenue for unused tickets relating to international
transportation services for more than two years. The change of accounting estimate is prospectively applied in April 2013.
The main effects of changes in accounting
estimate on the condensed consolidated interim financial information as at 30 June 2013 are as follows:
As at June 2013
|
|
|
|
|
|
Changes in
|
|
|
|
|
|
|
|
Before
|
|
|
accounting
|
|
|
After
|
|
|
|
|
changes
|
|
|
estimate
|
|
|
changes
|
|
|
|
|
Ending
|
|
|
Recognition
|
|
|
Ending
|
|
|
|
|
balance/
|
|
|
of unused
|
|
|
balance/
|
|
|
|
|
Transaction
|
|
|
tickets
|
|
|
Transaction
|
|
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales in advance of carriage
|
|
|
3,056,757
|
|
|
|
(59,870
|
)
|
|
|
2,996,887
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
– traffic revenues
|
|
|
38,136,558
|
|
|
|
59,870
|
|
|
|
38,196,428
|
|
CHINA EASTERN AIRLINES
CORPORATION LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
|
|
5.
|
FINANCIAL RISK
MANAGEMENT
|
|
|
(a)
|
Financial
risk factors
|
The Group’s activities expose it
to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk
and fuel price risk), credit risk and liquidity risk.
The interim condensed consolidated financial
information do not include all financial risk management information and disclosures required in the annual financial statements,
and should be read in conjunction with the Group’s annual financial statements for the year ended 31 December 2012.
There have been no changes in the risk
management department since year end or in any risk management policies.
The Group’s primary cash requirements
have been for day-to-day operations, additions of and upgrades to aircraft, engines and flight equipment and repayments of related
borrowings. The Group finances its working capital requirements through a combination of funds generated from operations and bank
loans (both short-term and long-term). The Group generally finances the acquisition of aircraft through long-term finance leases
or bank loans.
The Group operates with a working capital
deficit. As at 30 June 2013, the Group’s net current liabilities amounted to RMB33,562 million (2012: RMB35,948 million).
For the six months ended 30 June 2013, the Group recorded a net cash inflow from operating activities of RMB3,780 million (2012:
inflow of RMB5,847 million), a net cash outflow from investing activities and financing activities of RMB2,612 million (2012: outflow
of RMB4,350 million), and an increase in cash and cash equivalents of RMB1,168 million (2012: increase of RMB1,497 million).
The Directors of the Company believe that
cash from operations and bank loans will be sufficient to meet the Group’s operating cash flow requirements. Due to the dynamic
nature of the underlying businesses, the Group’s treasury policy aims at maintaining flexibility in funding by keeping credit
lines available. The Directors of the Company believe that the Group has obtained sufficient general credit facilities from PRC
banks for financing future capital commitments and for working capital purposes.
INTERIM REPORT 2013
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
|
|
5.
|
FINANCIAL
RISK MANAGEMENT
(cont’d)
|
|
|
(b)
|
Liquidity
risk
(cont’d)
|
The table below analyses the Group’s
financial liabilities that will be settled into relevant maturity groupings based on the remaining period at the balance sheet
to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due
within 12 months equal their carrying balances, as the impact of discounting is not significant.
|
|
|
Less than
|
|
|
Between
|
|
|
Between
|
|
|
Over
|
|
|
|
|
1 year
|
|
|
1 and 2 years
|
|
|
2 and 5 years
|
|
|
5 years
|
|
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
At 30 June 2013 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings
|
|
|
24,025,885
|
|
|
|
7,358,744
|
|
|
|
13,350,079
|
|
|
|
12,945,603
|
|
|
Derivative financial instruments
|
|
|
25,738
|
|
|
|
–
|
|
|
|
120,617
|
|
|
|
7,065
|
|
|
Obligations under finance leases
|
|
|
2,944,580
|
|
|
|
3,046,317
|
|
|
|
8,239,488
|
|
|
|
7,700,153
|
|
|
Trade and other payables
|
|
|
19,679,993
|
|
|
|
73,328
|
|
|
|
339,680
|
|
|
|
60,390
|
|
|
Provision for return condition checks for aircraft under operating lease
|
|
|
968,116
|
|
|
|
1,126,427
|
|
|
|
1,270,482
|
|
|
|
536,180
|
|
|
Other long term liabilities
|
|
|
–
|
|
|
|
27,350
|
|
|
|
75,922
|
|
|
|
75,538
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
47,644,312
|
|
|
|
11,632,166
|
|
|
|
23,396,268
|
|
|
|
21,324,929
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2012 (Audited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings
|
|
|
23,690,528
|
|
|
|
7,780,344
|
|
|
|
8,846,834
|
|
|
|
8,736,557
|
|
|
Derivative financial instruments
|
|
|
504
|
|
|
|
–
|
|
|
|
122,751
|
|
|
|
216,895
|
|
|
Obligations under finance leases
|
|
|
3,004,452
|
|
|
|
3,059,744
|
|
|
|
8,685,669
|
|
|
|
9,027,940
|
|
|
Trade and other payables
|
|
|
18,871,661
|
|
|
|
71,236
|
|
|
|
329,988
|
|
|
|
58,665
|
|
|
Provision for return condition checks for aircraft under operating lease
|
|
|
734,205
|
|
|
|
818,199
|
|
|
|
1,381,893
|
|
|
|
864,465
|
|
|
Other long term liabilities
|
|
|
26,500
|
|
|
|
26,988
|
|
|
|
76,610
|
|
|
|
79,629
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
46,327,850
|
|
|
|
11,756,511
|
|
|
|
19,443,745
|
|
|
|
18,984,151
|
|
CHINA EASTERN AIRLINES CORPORATION LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
|
|
5.
|
FINANCIAL
RISK MANAGEMENT
(cont’d)
|
|
|
(c)
|
Fair value measurement
|
Except for the following, the carrying amounts of the financial
instruments approximate to their fair values.
|
|
|
30 June 2013
|
|
|
|
|
Carrying
|
|
|
Fair
|
|
|
|
|
amounts
|
|
|
values
|
|
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
|
Borrowings
|
|
|
|
|
|
|
|
|
|
– long-term bank borrowings
|
|
|
|
|
|
|
|
|
|
(including current portion)
|
|
|
28,450,941
|
|
|
|
29,966,927
|
|
|
Obligations under finance leases
|
|
|
|
|
|
|
|
|
|
(including current portion)
|
|
|
20,136,880
|
|
|
|
21,126,749
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
48,587,821
|
|
|
|
51,093,676
|
|
The Group enters into derivative financial
instruments with various counterparties. Derivative financial instruments, including forward currency contracts and interest rate
swaps, are measured using valuation techniques similar to forward pricing and swap models, using present value calculations. The
models incorporate various market observable inputs including the credit quality of counterparties, foreign exchange spot and forward
rates and interest rate curves. The carrying amounts of forward currency contracts and interest rate swaps are the same as their
fair values.
INTERIM REPORT 2013
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
|
|
5.
|
FINANCIAL
RISK MANAGEMENT
(cont’d)
|
The Group uses the following hierarchy for determining and disclosing
the fair values of financial instruments:
|
|
Level 1:
|
fair values measured based on quoted prices (unadjusted)
in active markets for identical assets or liabilities
|
|
|
|
|
|
|
Level 2:
|
fair values measured based on valuation techniques for
which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly
|
|
|
|
|
|
|
Level 3:
|
fair values measured based on valuation techniques for
which any inputs which have a significant effect on the recorded fair value are not based on observable market data (unobservable
inputs)
|
Assets measured at fair value
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
At 30 June 2013 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
– Equity investments
|
|
|
1,955
|
|
|
|
–
|
|
|
|
279,820
|
|
|
|
281,775
|
|
|
Derivative financial instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
– Interest rate swaps
|
|
|
–
|
|
|
|
55,907
|
|
|
|
–
|
|
|
|
55,907
|
|
|
– Forward foreign exchange contracts
|
|
|
–
|
|
|
|
1,485
|
|
|
|
–
|
|
|
|
1,485
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
1,955
|
|
|
|
57,392
|
|
|
|
279,820
|
|
|
|
339,167
|
|
CHINA EASTERN AIRLINES CORPORATION LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
|
|
5.
|
FINANCIAL
RISK MANAGEMENT
(cont’d)
|
|
|
(d)
|
Fair value hierarchy
(cont’d)
|
Assets measured at fair value (cont’d)
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
At 31 December 2012 (Audited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
– Equity investments
|
|
|
1,955
|
|
|
|
–
|
|
|
|
232,735
|
|
|
|
234,690
|
|
|
Derivative financial instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
– Forward foreign exchange contracts
|
|
|
–
|
|
|
|
18,074
|
|
|
|
–
|
|
|
|
18,074
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
1,955
|
|
|
|
18,074
|
|
|
|
232,735
|
|
|
|
252,764
|
|
The movements in fair value measurements in Level 3 during the
period are as follows:
|
|
|
RMB’000
|
|
|
Available-for-sale investments:
|
|
|
|
|
|
At 1 January 2013
|
|
|
232,735
|
|
|
Purchases
|
|
|
47,085
|
|
|
|
|
|
|
|
|
At 30 June 2013
|
|
|
279,820
|
|
During the period, there were no transfers of fair
value measurements between Level 1 and Level 2 and no transfers into or out of Level 3 (2012: Nil).
INTERIM REPORT 2013
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION
|
|
5.
|
FINANCIAL
RISK MANAGEMENT
(cont’d)
|
|
|
(d)
|
Fair value hierarchy
(cont’d)
|
Liabilities measured at
fair value
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
At 30 June 2013 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
– Interest rate swaps
|
|
|
–
|
|
|
|
153,420
|
|
|
|
–
|
|
|
|
153,420
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
–
|
|
|
|
153,420
|
|
|
|
–
|
|
|
|
153,420
|
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
At 31 December 2012 (Audited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
– Interest rate swaps
|
|
|
–
|
|
|
|
295,005
|
|
|
|
–
|
|
|
|
295,005
|
|
|
– Forward foreign exchange contracts
|
|
|
–
|
|
|
|
45,146
|
|
|
|
–
|
|
|
|
45,146
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
–
|
|
|
|
340,151
|
|
|
|
–
|
|
|
|
340,151
|
|
CHINA EASTERN AIRLINES CORPORATION LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION
The Group is principally engaged in the operation of
civil aviation, including the provision of passenger, cargo, mail delivery, tour operations and other extended transportation services.
|
|
|
(Unaudited)
|
|
|
|
|
Six months ended 30 June
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
|
|
|
|
|
|
|
|
Traffic revenues
|
|
|
|
|
|
|
|
– Passenger
|
|
|
34,665,298
|
|
|
|
33,565,785
|
|
|
– Cargo and mail
|
|
|
3,531,130
|
|
|
|
4,003,592
|
|
|
Tour operations income
|
|
|
1,475,906
|
|
|
|
984,813
|
|
|
Ground service income
|
|
|
979,109
|
|
|
|
906,058
|
|
|
Cargo handling income
|
|
|
116,779
|
|
|
|
89,041
|
|
|
Commission income
|
|
|
34,780
|
|
|
|
42,099
|
|
|
Others
|
|
|
821,392
|
|
|
|
621,966
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
41,624,394
|
|
|
|
40,213,354
|
|
|
|
(a)
|
CODM, office of the General Manager, reviews the Group’s
internal reporting in order to assess performance and allocate resources.
|
The Group has one reportable
operating segment, reported as “airline transportation operations”, which comprises the provision of passenger, cargo,
mail delivery and ground service.
Other services including tour
operations, aviation training, air catering and other miscellaneous services are not included within the airline transportation
operations segment, as their internal reports are separately provided to the CODM. The results of these operations are included
in the “other segments” column.
Inter-segment transactions are
entered into under normal commercial terms and conditions that would be available to unrelated third parties.
INTERIM REPORT 2013
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
|
|
7.
|
SEGMENT
INFORMATION
(cont’d)
|
In accordance with IFRS 8,
segment disclosure has been presented in a manner that is consistent with the information used by the Group’s CODM. The Group’s
CODM monitors the results, assets and liabilities attributable to each reportable segment based on financial results prepared under
the PRC Accounting Standards for Business Enterprises (the “
PRC Accounting Standards
”), which differ from IFRS
in certain aspects. The amount of each material reconciling items from the Group’s reportable segment revenue, profit, assets
and liabilities arising from different accounting policies are set out in Note 7(c) below.
The segment results for the
six months ended 30 June 2013 are as follows:
|
|
|
(Unaudited)
|
|
|
|
|
Airline
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
transportation
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
operations
|
|
|
segments
|
|
|
Elimination
|
|
|
Unallocated*
|
|
|
Total
|
|
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reportable segment revenue from external customers
|
|
|
39,860,318
|
|
|
|
1,618,936
|
|
|
|
–
|
|
|
|
–
|
|
|
|
41,479,254
|
|
|
Inter-segment sales
|
|
|
–
|
|
|
|
106,194
|
|
|
|
(106,194
|
)
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reportable segment revenue
|
|
|
39,860,318
|
|
|
|
1,725,130
|
|
|
|
(106,194
|
)
|
|
|
–
|
|
|
|
41,479,254
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reportable segment profit before income tax
|
|
|
600,889
|
|
|
|
137,781
|
|
|
|
–
|
|
|
|
11,051
|
|
|
|
749,721
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other segment information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
4,200,374
|
|
|
|
63,642
|
|
|
|
–
|
|
|
|
–
|
|
|
|
4,264,016
|
|
|
Impairment losses
|
|
|
19,282
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
19,282
|
|
|
Capital expenditure
|
|
|
10,599,504
|
|
|
|
102,767
|
|
|
|
–
|
|
|
|
–
|
|
|
|
10,702,271
|
|
CHINA EASTERN AIRLINES CORPORATION LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
|
|
7.
|
SEGMENT
INFORMATION
(cont’d)
|
The segment results for the six months ended 30 June
2012 are as follows:
|
|
|
(Unaudited)
|
|
|
|
|
Airline
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
transportation
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
operations
|
|
|
segments
|
|
|
Elimination
|
|
|
Unallocated*
|
|
|
Total
|
|
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
Reportable segment revenue from external customers
|
|
|
39,321,780
|
|
|
|
1,081,000
|
|
|
|
–
|
|
|
|
–
|
|
|
|
40,402,780
|
|
|
Inter-segment sales
|
|
|
–
|
|
|
|
113,518
|
|
|
|
(113,518
|
)
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reportable segment revenue
|
|
|
39,321,780
|
|
|
|
1,194,518
|
|
|
|
(113,518
|
)
|
|
|
–
|
|
|
|
40,402,780
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reportable segment profit before income tax
|
|
|
938,839
|
|
|
|
63,176
|
|
|
|
–
|
|
|
|
65,546
|
|
|
|
1,067,561
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other segment information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
3,792,726
|
|
|
|
53,769
|
|
|
|
–
|
|
|
|
–
|
|
|
|
3,846,495
|
|
|
Impairment losses
|
|
|
(21,219
|
)
|
|
|
200
|
|
|
|
–
|
|
|
|
–
|
|
|
|
(21,019
|
)
|
|
Capital expenditure
|
|
|
8,031,713
|
|
|
|
86,875
|
|
|
|
–
|
|
|
|
–
|
|
|
|
8,118,588
|
|
INTERIM REPORT 2013
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
|
|
7.
|
SEGMENT
INFORMATION
(cont’d)
|
The segment assets and liabilities as at 30 June
2013 and 31 December 2012 are as follows:
|
|
|
(Unaudited)
|
|
|
|
|
Airline
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
transportation
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
operations
|
|
|
segments
|
|
|
Elimination
|
|
|
Unallocated*
|
|
|
Total
|
|
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
At 30 June 2013 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reportable segment assets
|
|
|
124,585,860
|
|
|
|
7,548,051
|
|
|
|
(3,016,772
|
)
|
|
|
1,712,656
|
|
|
|
130,829,795
|
|
|
Reportable segment liabilities
|
|
|
97,782,601
|
|
|
|
6,550,630
|
|
|
|
(3,016,772
|
)
|
|
|
–
|
|
|
|
101,316,459
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2012 (Audited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reportable segment assets
|
|
|
116,461,666
|
|
|
|
4,706,382
|
|
|
|
(1,691,890
|
)
|
|
|
1,486,321
|
|
|
|
120,962,479
|
|
|
Reportable segment liabilities
|
|
|
94,047,698
|
|
|
|
3,564,029
|
|
|
|
(1,691,890
|
)
|
|
|
–
|
|
|
|
95,919,837
|
|
|
|
*
|
Unallocated assets primarily represent investments in
associates and joint ventures, and available-for-sale financial assets. Unallocated results primarily represent the share of results
of associates and joint ventures.
|
|
|
(b)
|
The
Group’s business segments operate
in three main geographical areas, even
though they are managed on a worldwide
basis. The Group’s revenues by geographical
areas are analysed based on the following
criteria:
|
|
|
1)
|
Traffic revenue from services within the PRC (excluding
the Hong Kong Special Administrative Region (“
Hong Kong
”), Macau Special Administrative Region (“
Macau
”)
and
Taiwan
, (collectively known as “
Regional
”)) is classified as domestic operations. Traffic revenue
from inbound and outbound services between overseas markets excluding Regional is classified as international operations.
|
CHINA EASTERN AIRLINES CORPORATION LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION
|
|
7.
|
SEGMENT
INFORMATION
(cont’d)
|
|
|
2)
|
Revenue from ticket handling services, ground services,
cargo handling service and other miscellaneous services are classified on the basis of where the services are performed.
|
|
|
|
(Unaudited)
|
|
|
|
|
Six months ended 30 June
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
Domestic (the PRC, excluding Hong Kong,
|
|
|
|
|
|
|
|
|
|
Macau and Taiwan)
|
|
|
27,829,110
|
|
|
|
27,033,403
|
|
|
International
|
|
|
11,721,512
|
|
|
|
11,579,840
|
|
|
Regional (Hong Kong, Macau and Taiwan)
|
|
|
1,928,632
|
|
|
|
1,789,537
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
41,479,254
|
|
|
|
40,402,780
|
|
The major revenue-earning assets
of the Group are its aircraft, all of which are registered in the PRC. Since the Group’s aircraft are deployed flexibly across
its route network, there is no suitable basis of allocating such assets and the related liabilities by geographic areas and hence
segment assets and capital expenditure by geographic areas have not been presented.
INTERIM REPORT 2013
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
|
|
7.
|
SEGMENT
INFORMATION
(cont’d)
|
|
|
(c)
|
Reconciliation of reportable segment revenue, profit,
assets and liabilities to the consolidated figures as reported in the consolidated financial information.
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
Six months ended 30 June
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
Note
|
|
RMB’000
|
|
|
RMB’000
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
Reportable segment revenue
|
|
|
|
|
41,479,254
|
|
|
|
40,402,780
|
|
|
– Reclassification of business tax
|
|
(i)
|
|
|
(204,860
|
)
|
|
|
(339,426
|
)
|
|
– Reclassification of expired sales in advance of carriage
|
|
(i)
|
|
|
350,000
|
|
|
|
150,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated revenue
|
|
|
|
|
41,624,394
|
|
|
|
40,213,354
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
Six months ended 30 June
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
Note
|
|
RMB’000
|
|
|
RMB’000
|
|
|
|
|
|
|
|
|
|
Restated
|
|
|
Profit before income tax
|
|
|
|
|
|
|
|
|
|
|
|
Reportable segment profit
|
|
|
|
|
749,721
|
|
|
|
1,067,561
|
|
|
– Differences in depreciation of aircraft and engines
|
|
(ii)
|
|
|
(3,504
|
)
|
|
|
(3,136
|
)
|
|
– Provision for post-retirement benefits
|
|
(iii)
|
|
|
(133,600
|
)
|
|
|
(133,991
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated profit before income tax
|
|
|
|
|
612,617
|
|
|
|
930,434
|
|
CHINA EASTERN AIRLINES CORPORATION LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
|
|
7.
|
SEGMENT
INFORMATION
(cont’d)
|
|
|
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
|
|
|
|
|
30 June
|
|
|
31 December
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
Note
|
|
RMB’000
|
|
|
RMB’000
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Reportable segment assets
|
|
|
|
|
130,829,795
|
|
|
|
120,962,479
|
|
|
– Differences in depreciation of aircraft and engines
|
|
(ii)
|
|
|
49,397
|
|
|
|
52,901
|
|
|
– Difference in intangible asset (goodwill) arising from the acquisition of Shanghai Airlines
|
|
(iv)
|
|
|
2,760,665
|
|
|
|
2,760,665
|
|
|
– Others
|
|
|
|
|
119,023
|
|
|
|
112,616
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated total assets
|
|
|
|
|
133,758,880
|
|
|
|
123,888,661
|
|
|
|
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
|
|
|
|
|
30 June
|
|
|
31 December
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
Note
|
|
RMB’000
|
|
|
RMB’000
|
|
|
|
|
|
|
|
|
|
Restated
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Reportable segment liabilities
|
|
|
|
|
101,316,459
|
|
|
|
95,919,837
|
|
|
– Provision for post-retirement benefits
|
|
(iii)
|
|
|
6,427,448
|
|
|
|
6,233,652
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated total liabilities
|
|
|
|
|
107,743,907
|
|
|
|
102,153,489
|
|
INTERIM REPORT 2013
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
|
|
7.
|
SEGMENT
INFORMATION
(cont’d)
|
Notes:
|
|
(i)
|
The difference represents the different classification of business tax and expired sales in advance
of carriage under PRC Accounting Standards and IFRS.
|
|
|
(ii)
|
The difference is attributable to the differences in the useful lives and residual values of aircraft
and engines adopted for depreciation purpose in prior years under PRC Accounting Standards and IFRS. Despite the depreciation policies
of these assets have been unified under IFRS and the PRC Accounting Standards in recent years, the changes were applied prospectively
as changes in accounting estimates which results in the differences in the carrying amounts and related depreciation charges under
IFRS and PRC Accounting Standards.
|
|
|
(iii)
|
In accordance with the PRC Accounting Standards, certain employees’ post-retirement benefits
are recognised upon actually incurred. Under IFRS, such post-retirement benefits under defined benefit schemes are required to
be recognised over the employees’ service period using projected unit credit method.
|
|
|
(iv)
|
The determination of the fair values of the acquisition costs and identifiable assets and liabilities
of Shanghai Airlines acquired is different under IFRS and the PRC Accounting Standards, which resulted in differences in the intangibles/goodwill
recognised arising from the acquisition.
|
CHINA EASTERN AIRLINES CORPORATION LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
|
|
|
(Unaudited)
|
|
|
|
|
Six months ended 30 June
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
Interest on bank borrowings
|
|
|
627,359
|
|
|
|
717,364
|
|
|
Interest relating to obligations under finance leases
|
|
|
173,038
|
|
|
|
182,393
|
|
|
Interest on bonds
|
|
|
126,620
|
|
|
|
50,000
|
|
|
Interest relating to notes payable
|
|
|
45,946
|
|
|
|
35,251
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
972,963
|
|
|
|
985,008
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: amounts capitalised into advanced payments on acquisition of aircraft
(Note)
|
|
|
(193,725
|
)
|
|
|
(138,407
|
)
|
|
amounts capitalised into property, plant and equipment
(Note)
|
|
|
(6,025
|
)
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
773,213
|
|
|
|
846,601
|
|
Note:
The average interest rate used
for interest capitalisation is 3.60%-5.90% per annum for the six months ended 30 June 2013 (2012: 3.78%).
|
|
9.
|
EXCHANGE GAINS/(LOSSES),
NET
|
The exchange gains/(losses) for
the six months ended 30 June 2013 and 2012 primarily related to the translation of the Group’s foreign currency denominated
borrowings and obligations under finance leases at period-end exchange rates.
INTERIM REPORT 2013
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
Income tax charged to the condensed consolidated
income statement is as follows:
|
|
|
(Unaudited)
|
|
|
|
|
Six months ended 30 June
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
Provision for PRC income tax
|
|
|
87,072
|
|
|
|
178,833
|
|
|
Deferred taxation
|
|
|
(7,220
|
)
|
|
|
(2,184
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
79,852
|
|
|
|
176,649
|
|
Prior to 2008, the Company and
certain of its subsidiaries (the “
Pudong Subsidiaries
”) located in Pudong District, Shanghai, were entitled
to a reduced rate of 15% pursuant to the preferential tax policy in Pudong District, Shanghai. Under the Corporate Income Tax
Law of the People’s Republic of China (the “
New CIT Law
”), which was approved by the National People’s
Congress on 16 March 2007 and became effective from 1 January 2008, the Company and the Pudong Subsidiaries are entitled to a
transitional arrangement to gradually increase the applicable corporate income tax rate to 25% over five years from 2008.
For the year ended 30 June
2013, the corporate income tax rate applicable to the Company and the Pudong Subsidiaries was 25% (2012: 25%). Other subsidiaries
of the Company, except for those incorporated in Hong Kong, which are subject to Hong Kong corporate income tax rate of 16.5% (2012:
16.5%), are generally subject to the PRC standard corporate tax rate of 25% (2012: 25%) under the New CIT Law.
CHINA EASTERN AIRLINES CORPORATION LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION
Pursuant to the “Notice
of the Ministry of Finance, the State Administration of Taxation and the General Administration of Customs on Issues Concerning
Relevant Tax Policies for Enhancing the Implementation of Western Region Development Strategy” (Cai Shui [2011] No.58),
and other series of tax regulations, the enterprises, located in the western regions and engaged in the industrial activities
as listed in the “Catalogue of Encouraged Industries in Western Regions”, will be entitled to a reduced income tax
rate of 15% from 2011 to 2020 upon approval from tax authorities. China Eastern Yunnan Airlines Co., Ltd. (“
CEA Yunnan
”),
a subsidiary of the Group, obtained approval from tax authorities and enjoys a reduced tax rate of 15% from 1 January 2011.
The Group operates international
flights to overseas destinations. There was no material overseas taxation for the six months ended 30 June 2013, as there are avoidance
of double tax treaties between the PRC and the corresponding jurisdictions (including Hong Kong) relating to aviation businesses.
The calculation of basic
earnings per share is based on the unaudited consolidated profit attributable to equity shareholders of the Company of
approximately RMB622 million (2012: RMB866 million) and the weighted average number of shares of 11,602,676,000 (2012:
11,276,539,000) in issue during the six months ended 30 June 2013.
The Company has no potentially
dilutive option or other instruments relating to ordinary shares.
The Board has not recommended
any interim dividend for the six months ended 30 June 2013 (2012: Nil).
No appropriation to the statutory
reserves has been made during the six months ended 30 June 2013. Such appropriations will be made at year end in accordance with
PRC regulations and the Articles of Association of individual group companies.
INTERIM REPORT 2013
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
|
|
|
30 June
|
|
|
31 December
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
Goodwill
(Note)
|
|
|
11,269,695
|
|
|
|
11,269,695
|
|
|
Other intangible assets
|
|
|
185,805
|
|
|
|
179,404
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,455,500
|
|
|
|
11,449,099
|
|
Note:
The balance represents goodwill
arising from the acquisition of Shanghai Airlines. Goodwill is attributable to strengthening the competitiveness of the Group’s
airlines operation business, attaining synergy through integration of the resources and providing the evolution of Shanghai international
air transportation center.
|
|
15.
|
PROPERTY, PLANT
AND EQUIPMENT
|
|
|
|
(Unaudited)
|
|
|
|
|
Six months ended 30 June 2013
|
|
|
|
|
Aircraft,
|
|
|
|
|
|
|
|
|
|
|
engines
|
|
|
|
|
|
|
|
|
|
|
and flight
|
|
|
|
|
|
|
|
|
|
|
equipment
|
|
|
Others
|
|
|
Total
|
|
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
Carrying amounts at 1 January 2013
|
|
|
73,005,271
|
|
|
|
9,513,490
|
|
|
|
82,518,761
|
|
|
Transfers from advanced payments on acquisition of aircraft
(Note 16)
|
|
|
5,231,841
|
|
|
|
–
|
|
|
|
5,231,841
|
|
|
Other additions
|
|
|
1,612,525
|
|
|
|
1,098,997
|
|
|
|
2,711,522
|
|
|
Depreciation charges
|
|
|
(3,596,708
|
)
|
|
|
(362,106
|
)
|
|
|
(3,958,814
|
)
|
|
Disposals
|
|
|
(12,551
|
)
|
|
|
(7,716
|
)
|
|
|
(20,267
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amounts at 30 June 2013
|
|
|
76,240,378
|
|
|
|
10,242,665
|
|
|
|
86,483,043
|
|
CHINA EASTERN AIRLINES CORPORATION LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
|
|
15.
|
PROPERTY,
PLANT AND EQUIPMENT
(cont’d)
|
|
|
|
(Unaudited)
|
|
|
|
|
Six months ended 30 June 2012
|
|
|
|
|
Aircraft,
|
|
|
|
|
|
|
|
|
|
|
engines
|
|
|
|
|
|
|
|
|
|
|
and flight
|
|
|
|
|
|
|
|
|
|
|
equipment
|
|
|
Others
|
|
|
Total
|
|
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
Carrying amounts at 1 January 2012
|
|
|
65,603,566
|
|
|
|
8,154,229
|
|
|
|
73,757,795
|
|
|
Transfers from advanced payments on acquisition of aircraft
(Note 16)
|
|
|
3,356,945
|
|
|
|
–
|
|
|
|
3,356,945
|
|
|
Other additions
|
|
|
3,310,715
|
|
|
|
1,524,246
|
|
|
|
4,834,961
|
|
|
Depreciation charges
|
|
|
(3,270,555
|
)
|
|
|
(323,628
|
)
|
|
|
(3,594,183
|
)
|
|
Disposals
|
|
|
(31,066
|
)
|
|
|
(45,320
|
)
|
|
|
(76,386
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amounts at 30 June 2012
|
|
|
68,969,605
|
|
|
|
9,309,527
|
|
|
|
78,279,132
|
|
|
|
16.
|
ADVANCED PAYMENTS
ON ACQUISITION OF AIRCRAFT
|
|
|
|
(Unaudited)
|
|
|
|
|
Six months ended 30 June
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
At beginning of period
|
|
|
11,894,891
|
|
|
|
10,968,344
|
|
|
Additions
|
|
|
7,313,117
|
|
|
|
2,193,244
|
|
|
Interest capitalised
(Note 8)
|
|
|
193,725
|
|
|
|
138,407
|
|
|
Transfers to property, plant and equipment
(Note 15)
|
|
|
(5,231,841
|
)
|
|
|
(3,356,945
|
)
|
|
|
|
|
|
|
|
|
|
|
|
At end of period
|
|
|
14,169,892
|
|
|
|
9,943,050
|
|
INTERIM REPORT 2013
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
The credit terms given to trade customers are determined
on an individual basis, with credit periods generally ranging from half a month to two months.
The aging analysis of trade receivables is as follows:
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
|
|
|
30 June
|
|
|
31December
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
Within 90 days
|
|
|
3,644,152
|
|
|
|
2,851,736
|
|
|
91 to 180 days
|
|
|
199,142
|
|
|
|
68,488
|
|
|
181 to 365 days
|
|
|
132,144
|
|
|
|
35,995
|
|
|
Over 365 days
|
|
|
222,084
|
|
|
|
208,770
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,197,522
|
|
|
|
3,164,989
|
|
|
Less: provision for impairment of receivables
|
|
|
(206,616
|
)
|
|
|
(202,808
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Trade receivables
|
|
|
3,990,906
|
|
|
|
2,962,181
|
|
Balances with related parties included in trade
receivables are summarised in Note 24(b)(i).
CHINA EASTERN AIRLINES CORPORATION LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION
|
|
18.
|
TRADE PAYABLES
AND NOTES PAYABLE
|
The aging analysesof trade payables and notes payable
is as follows:
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
|
|
|
30 June
|
|
|
31December
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
Within 90 days
|
|
|
1,051,713
|
|
|
|
1,473,087
|
|
|
91 to 180 days
|
|
|
893,892
|
|
|
|
397,815
|
|
|
181 to 365 days
|
|
|
688,635
|
|
|
|
675,630
|
|
|
Over 365 days
|
|
|
785,441
|
|
|
|
528,793
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade payables
|
|
|
3,419,681
|
|
|
|
3,075,325
|
|
As at 30 June 2013, trade payables and notes payable
balances of the Group included amounts due to related parties of RMB1,831 million (2012: RMB1,950 million) (Note 24 (b)(ii)).
As at 30 June 2013, notes payable amounted to RMB400
million (2012:RMB250 million), which were mainly unsecured, bore effective interests rates ranging from 3.95% to 4.2% (2012: 4.65%
to 4.68%) and are repayable within six months.
|
|
19.
|
OBLIGATIONS
UNDER FINANCE LEASES
|
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
|
|
|
30 June
|
|
|
31December
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
Within one year
|
|
|
2,589,090
|
|
|
|
2,605,269
|
|
|
In the second year
|
|
|
2,684,073
|
|
|
|
2,704,168
|
|
|
In the third to fifth year inclusive
|
|
|
7,450,695
|
|
|
|
7,924,892
|
|
|
After the fifth year
|
|
|
7,413,022
|
|
|
|
8,623,649
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
20,136,880
|
|
|
|
21,857,978
|
|
|
Less: amount repayable within one year
|
|
|
(2,589,090
|
)
|
|
|
(2,605,269
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Long-term portion
|
|
|
17,547,790
|
|
|
|
19,252,709
|
|
INTERIM REPORT 2013
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
|
|
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
|
|
|
|
|
30 June
|
|
|
31December
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
Note
|
|
RMB’000
|
|
|
RMB’000
|
|
|
Non-current
|
|
|
|
|
|
|
|
|
|
|
|
Long-term bank borrowings
|
|
|
|
|
|
|
|
|
|
|
|
– Secured
|
|
|
|
|
14,647,318
|
|
|
|
15,780,892
|
|
|
– Unsecured
|
|
|
|
|
5,469,471
|
|
|
|
4,815,271
|
|
|
Guaranteed bonds
|
|
(i)
|
|
|
9,480,239
|
|
|
|
2,500,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29,597,028
|
|
|
|
23,096,163
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
|
|
|
Current portion of long-term bank borrowings
|
|
|
|
|
|
|
|
|
|
|
|
– Secured
|
|
|
|
|
2,154,962
|
|
|
|
2,612,055
|
|
|
– Unsecured
|
|
|
|
|
6,179,190
|
|
|
|
7,147,656
|
|
|
Short-term bank borrowings
|
|
|
|
|
|
|
|
|
|
|
|
– Unsecured
|
|
|
|
|
10,350,159
|
|
|
|
8,880,244
|
|
|
Short-term bank debentures
|
|
(ii)
|
|
|
4,000,000
|
|
|
|
4,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,684,311
|
|
|
|
22,639,955
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total borrowings
|
|
|
|
|
52,281,339
|
|
|
|
45,736,118
|
|
Note:
|
|
(i)
|
For the period ended 30 June 2013, the Group issued guaranteed bonds of RMB4,800 million and RMB2,200
million with interest rates of 5.05% and 3.875% per annum, respectively. The aforesaid guaranteed bonds are due 2023 and 2016,
respectively.
|
|
|
(ii)
|
For the period ended 30 June 2013, the Group issued short-term bank debentures of RMB4,000 million
bearing the interest rate of 3.95% per annum. The aforesaid short-term bank debentures are due 2014.
|
CHINA EASTERN AIRLINES CORPORATION LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION
|
|
21.
|
POST-RETIREMENT
BENEFIT OBLIGATIONS
|
The Group operates a defined benefit
pension plan in China.
IAS 19R has been applied retrospectively
from 1 January 2012. As a result, expected returns on plan assets of defined benefit plans are not recognised in profit or loss.
Instead, interest on net defined benefit obligation is recognised in profit or loss, calculated using the discount rate used to
measure the net pension obligation or asset.
Also, unvested past service costs
can no longer be deferred and recognised over the future vesting period. Instead, all past service costs are recognised at the
earlier of when the amendment occurs and when the Group recognises related restructuring or termination costs. Until 2012, the
Group’s unvested past service costs were recognised as an expense on a straight-line basis over the average period until
the benefits become vested. Upon transition to IAS 19R, past service costs are recognised immediately if the benefits have vested
immediately following the introduction of, or changes to, a pension plan.
Impact of transition to IAS 19R:
Impact on consolidated statement
of financial position:
|
|
|
As at
|
|
|
As at
|
|
|
|
|
30 June
|
|
|
31December
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
Increase in the defined benefit plan obligation (non-current)
|
|
|
(2,896,795
|
)
|
|
|
(2,888,323
|
)
|
|
Increase in deferred tax assets
|
|
|
74,390
|
|
|
|
70,098
|
|
|
|
|
|
|
|
|
|
|
|
|
Net impact on equity
|
|
|
(2,822,405
|
)
|
|
|
(2,818,225
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Equity holders of the parent
|
|
|
(2,683,010
|
)
|
|
|
(2,690,502
|
)
|
|
Non-controlling interest
|
|
|
(139,395
|
)
|
|
|
(127,723
|
)
|
INTERIM REPORT 2013
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
INFORMATION
|
|
21.
|
POST-RETIREMENT
BENEFIT OBLIGATIONS
(cont’d)
|
Impact on consolidated income statement:
|
|
|
Six months ended 30 June
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
Decrease in wages, salaries and benefits
|
|
|
51,726
|
|
|
|
62,109
|
|
|
Increase in deferred tax expense
|
|
|
(1,059
|
)
|
|
|
(1,184
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net increase profit for the period
|
|
|
50,667
|
|
|
|
60,925
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to equity holders of the Company
|
|
|
46,504
|
|
|
|
58,728
|
|
|
Non-controlling interest
|
|
|
4,163
|
|
|
|
2,197
|
|
|
|
|
|
|
|
|
|
|
|
|
(Decrease)/increase in actuarial movements in OCI
|
|
|
(60,200
|
)
|
|
|
23,024
|
|
|
Increase/(decrease) in tax effect on actuarial movements in OCI
|
|
|
5,352
|
|
|
|
(61
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net (decrease)/increase in OCI, net of tax
|
|
|
(54,848
|
)
|
|
|
22,963
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (decrease)/increase in total comprehensive income
|
|
|
(4,181
|
)
|
|
|
83,888
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributed to equity holders of the Company
|
|
|
(2,061
|
)
|
|
|
81,577
|
|
|
Non-controlling interest
|
|
|
(2,120
|
)
|
|
|
2,311
|
|
There was no material impact on the Group’s
interim condensed consolidated statement of cash flows.
CHINA EASTERN AIRLINES CORPORATION LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
|
|
|
30 June
|
|
|
31December
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
|
|
|
|
|
|
|
|
Registered, issued and fully paid of RMB1.00 each
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A shares listed on The Shanghai Stock Exchange
(“
A
Shares
”)
|
|
|
8,481,079
|
|
|
|
7,782,214
|
|
|
– Tradable shares held by CEA Holding with trading moratorium
|
|
|
241,548
|
|
|
|
–
|
|
|
–Tradable shares held by CES Finance Holding Co., Ltd. with trading moratorium
(Note)
|
|
|
457,317
|
|
|
|
–
|
|
|
– Tradable shares without trading moratorium
|
|
|
7,782,214
|
|
|
|
7,782,214
|
|
|
|
|
|
|
|
|
|
|
|
|
H shares listed on The Stock Exchange of Hong Kong Limited (“
H Shares
”)
|
|
|
4,193,190
|
|
|
|
3,494,325
|
|
|
–Tradable shares held by CES Global Holding (Hong Kong) Limited with trading moratorium
(Note)
|
|
|
698,865
|
|
|
|
–
|
|
|
– Tradable shares without trading moratorium
|
|
|
3,494,325
|
|
|
|
3,494,325
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,674,269
|
|
|
|
11,276,539
|
|
Pursuant to articles 49 and 50 of the
Company’s Articles of Association, both the listed A shares and the listed H shares are all registered ordinary shares
and carry equal rights.
Note:
New issued shares during the six months ended 30 June
2013 are all shares with a trading moratorium.
INTERIM REPORT 2013
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
The Group had the following capital commitments:
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
|
|
|
30 June
|
|
|
31 December
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
|
|
|
|
|
|
|
|
Authorised and contracted for:
|
|
|
|
|
|
|
|
|
|
– Aircraft, engines and flight equipment
|
|
|
155,878,059
|
|
|
|
172,092,301
|
|
|
– Other property, plant and equipment
|
|
|
1,095,368
|
|
|
|
1,125,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
156,973,427
|
|
|
|
173,217,301
|
|
|
Authorised but not contracted for:
|
|
|
|
|
|
|
|
|
|
– Other property, plant and equipment
|
|
|
3,960,196
|
|
|
|
3,257,416
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
160,933,623
|
|
|
|
176,474,717
|
|
|
|
(b)
|
Operating lease commitments
|
As at the balance sheet date, the Group had commitments
under operating leases to pay future minimum lease rentals as follows:
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
|
|
|
30 June 2013
|
|
|
31 December 2012
|
|
|
|
|
Aircraft,
|
|
|
|
|
|
Aircraft,
|
|
|
|
|
|
|
|
engines
|
|
|
|
|
|
engines
|
|
|
|
|
|
|
|
and flight
|
|
|
Land and
|
|
|
and flight
|
|
|
Land and
|
|
|
|
|
equipment
|
|
|
Buildings
|
|
|
equipment
|
|
|
Buildings
|
|
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Within one year
|
|
|
3,785,984
|
|
|
|
310,179
|
|
|
|
3,833,550
|
|
|
|
240,084
|
|
|
In the second year
|
|
|
3,326,419
|
|
|
|
203,770
|
|
|
|
3,504,777
|
|
|
|
176,726
|
|
|
In the third to fifth year inclusive
|
|
|
7,809,195
|
|
|
|
464,492
|
|
|
|
7,900,135
|
|
|
|
413,229
|
|
|
After the fifth year
|
|
|
5,224,373
|
|
|
|
2,252,298
|
|
|
|
6,438,693
|
|
|
|
2,072,525
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
20,145,971
|
|
|
|
3,230,739
|
|
|
|
21,677,155
|
|
|
|
2,902,564
|
|
CHINA EASTERN AIRLINES CORPORATION LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
|
|
24.
|
RELATED PARTY
TRANSACTIONS
|
The Group is controlled by CEA
Holding, which directly owns 40.03% of the Company’s shares as at 30 June 2013 (2012: 42.84%). In addition, through CES Global
Holding (Hong Kong) Limited, a wholly owned subsidiary of CEA Holding, CEA Holding additionally owns approximately 20.72% of the
Company’s shares as at 30 June 2013 (2012: 17.09%). Through CES Finance Holding Co., Ltd., a wholly owned subsidiary of CEA
Holding, CEA Holding additionally owns approximately 3.61% of the Company’s shares as at 30 June 2013.
|
|
(a)
|
Related party transactions
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
Income/(expense or payments)
|
|
|
|
|
|
|
Six months ended 30 June
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
Nature of transactions
|
|
Related party
|
|
RMB’000
|
|
|
RMB’000
|
|
|
|
|
|
|
|
|
|
|
|
|
With CEA Holding or companies directly or indirectly held by CEA Holding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income on deposits at an average rate of 0.35% per annum (2012: 0.35% per annum)
|
|
Eastern Air Group Finance Co., Ltd. (“
Eastern Finance
”)
|
|
|
13,502
|
|
|
|
20,959
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense on loans at rate of 4.57% (2012: 4.57%) per annum
|
|
Eastern Finance
|
|
|
(17,638
|
)
|
|
|
(110,250
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commission expense on air tickets sold on behalf of the Group, at rates ranging from 3% to 9% the value of tickets sold
|
|
Shanghai Dongmei Aviation Travel Co., Ltd. (“
Shanghai Dongmei
”) and its subsidiaries
|
|
|
(4,634
|
)
|
|
|
(8,425
|
)
|
INTERIM REPORT 2013
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
|
|
24.
|
RELATED
PARTY TRANSACTIONS
(cont’d)
|
|
|
(a)
|
Related party transactions
(cont’d)
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
Income/(expense or payments)
|
|
|
|
|
|
|
Six months ended 30 June
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
Nature of transactions
|
|
Related party
|
|
RMB’000
|
|
|
RMB’000
|
|
|
|
|
|
|
|
|
|
|
|
|
Handling charges of 0.1% to 2% for purchase of aircrafts, flight equipment, flight equipment spare parts, other property, plant and flight equipment and repairs for aircraft and engines
|
|
Eastern Aviation Import & Export Co., Ltd. (“
Eastern Import & Export
”)
|
|
|
(51,278
|
)
|
|
|
(37,207
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repairs and maintenance expense for aircraft and engines
|
|
Shanghai Eastern Union Aviation Wheels & Brakes Overhaul Engineering Co., Ltd.
|
|
|
(33,311
|
)
|
|
|
(28,677
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shanghai Technologies Aerospace Co., Ltd.
|
|
|
(73,528
|
)
|
|
|
(68,767
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shanghai Pratt & Whitney Aircraft Engine Maintenance Co., Ltd. (“
Shanghai P&W
”)
|
|
|
(786,618
|
)
|
|
|
(798,290
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supply of food and beverages
|
|
Shanghai Eastern Air Catering Co., Ltd. (“
Shanghai Catering
”) and its subsidiaries
|
|
|
(430,425
|
)
|
|
|
(387,607
|
)
|
CHINA EASTERN AIRLINES CORPORATION LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
|
|
24.
|
RELATED PARTY TRANSACTIONS
(cont’d)
|
|
|
(a)
|
Related party transactions
(cont’d)
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
Income/(expense or payments)
|
|
|
|
|
|
|
Six months ended 30 June
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
Nature of transactions
|
|
Related party
|
|
RMB’000
|
|
|
RMB’000
|
|
|
|
|
|
|
|
|
|
|
|
|
Advertising expense
|
|
Eastern Aviation Advertising Services Co., Ltd.
|
|
|
(2,881
|
)
|
|
|
(6,151
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Media royalty fee
|
|
Eastern Aviation Advertising Services Co., Ltd.
|
|
|
–
|
|
|
|
6,934
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maintenance and repair services fee
|
|
CEA Development Co., Ltd.
|
|
|
(68,824
|
)
|
|
|
(58,648
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shanghai Hute Aviation Technology Co., Ltd.
|
|
|
(28,937
|
)
|
|
|
(20,301
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land and building rental
|
|
CEA Holding
|
|
|
(28,752
|
)
|
|
|
(21,751
|
)
|
INTERIM REPORT 2013
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
|
|
24.
|
RELATED PARTY TRANSACTIONS
(cont’d)
|
|
|
(b)
|
Balances with related parties
|
|
|
(i)
|
Amounts due from related parties
|
|
|
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
|
|
|
|
|
30 June
|
|
|
31 December
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
Nature
|
|
Company
|
|
RMB’000
|
|
|
RMB’000
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade receivables
|
|
Kunming Dongmei Aviation Travel Co., Ltd.
|
|
|
–
|
|
|
|
4,213
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shanghai Eastern Aviation International Travel and Transportation Co., Ltd.
|
|
|
7,956
|
|
|
|
–
|
|
|
|
|
Others
|
|
|
15,042
|
|
|
|
4,308
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,998
|
|
|
|
8,521
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other receivables
|
|
Eastern Import & Export
|
|
|
70,942
|
|
|
|
370,125
|
|
|
|
|
Eastern China Kaiya System Integration
|
|
|
16,609
|
|
|
|
19,694
|
|
|
|
|
Others
|
|
|
34,516
|
|
|
|
13,025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
122,607
|
|
|
|
402,844
|
|
All the amounts due from related parties are interest free and
unsecured, within normal credit terms given to trade customers.
CHINA EASTERN AIRLINES CORPORATION LIMITED
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
|
|
24.
|
RELATED PARTY TRANSACTIONS
(cont’d)
|
|
|
(b)
|
Balances with related parties
(cont’d)
|
|
|
(ii)
|
Amounts due to related parties
|
|
|
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
|
|
|
|
|
30 June
|
|
|
31 December
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
Nature
|
|
Company
|
|
RMB’000
|
|
|
RMB’000
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade payables and notes payable
|
|
Eastern Import & Export
|
|
|
1,207,625
|
|
|
|
1,210,603
|
|
|
|
|
Shanghai P&W
|
|
|
377,634
|
|
|
|
467,885
|
|
|
|
|
Shanghai Catering
|
|
|
141,772
|
|
|
|
134,696
|
|
|
|
|
Others
|
|
|
103,722
|
|
|
|
136,460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,830,753
|
|
|
|
1,949,644
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other payables and accrued expenses
|
|
Eastern Import & Export
|
|
|
169,960
|
|
|
|
96,861
|
|
|
|
|
CEA Holding
|
|
|
65,183
|
|
|
|
73,020
|
|
|
|
|
Others
|
|
|
99,668
|
|
|
|
25,003
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
334,811
|
|
|
|
194,884
|
|
Except for the amounts due to
CEA Holding, which are reimbursement in nature, all other amounts due to related parties are trade in nature. All note payable
amounts due to related parties are interest free and payable within normal credit terms given by trade creditors.
INTERIM REPORT 2013
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
|
|
24.
|
RELATED PARTY TRANSACTIONS
(cont’d)
|
|
|
(b)
|
Balances with related parties
(cont’d)
|
|
|
(iii)
|
Short-term deposits and borrowings with an associate and CEA Holding
|
|
|
|
Average interest rate
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
|
|
|
30 June
|
|
|
31 December
|
|
|
30 June
|
|
|
31 December
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
RMB’000
|
|
|
RMB’000
|
|
|
Short-term deposits (included in Prepayments, Deposits and Other Receivables) in Eastern Finance
|
|
|
0.61
|
%
|
|
|
0.39
|
%
|
|
|
522,771
|
|
|
|
1,451,526
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term borrowings (included in Borrowings) from Eastern Finance
|
|
|
4.52
|
%
|
|
|
4.98
|
%
|
|
|
2,319,144
|
|
|
|
675,426
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term borrowings (included in Borrowings) from Eastern Finance
|
|
|
5.76
|
%
|
|
|
5.64
|
%
|
|
|
165,000
|
|
|
|
165,000
|
|
|
|
(c)
|
Guarantees by holding company
|
As at 30 June 2013, bonds of the
Group with an aggregate amount of RMB4,800 million were guaranteed by CEA Holding. (As at 30 June 2012, bank borrowings of the
Group with an aggregate amount of RMB95 million were guaranteed by CEA Holding).
The civil aviation industry is
subject to seasonal fluctuations, with peak demand during the holiday season in the second half of the year. As such, the revenues
and results of the Group in the first half of the year are generally lower than those in the second half of the year.
CHINA EASTERN AIRLINES CORPORATION LIMITED
SUMMARY OF SELECTED OPERATING DATA
|
|
|
For the six months ended 30 June
|
|
|
|
|
2013
|
|
|
2012
|
|
|
Change
|
|
|
Capacity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ATK (available tonne – kilometres)
(millions)
|
|
|
10,403.19
|
|
|
|
9,537.29
|
|
|
|
9.08
|
%
|
|
– Domestic routes
|
|
|
5,502.45
|
|
|
|
5,019.07
|
|
|
|
9.63
|
%
|
|
– International routes
|
|
|
4,525.59
|
|
|
|
4,170.52
|
|
|
|
8.51
|
%
|
|
– Regional routes
|
|
|
375.15
|
|
|
|
347.70
|
|
|
|
7.89
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASK (available seat – kilometres)
(millions)
|
|
|
72,945.62
|
|
|
|
65,190.62
|
|
|
|
11.90
|
%
|
|
– Domestic routes
|
|
|
49,613.10
|
|
|
|
45,180.79
|
|
|
|
9.81
|
%
|
|
– International routes
|
|
|
20,692.48
|
|
|
|
17,460.55
|
|
|
|
18.51
|
%
|
|
– Regional routes
|
|
|
2,640.04
|
|
|
|
2,549.29
|
|
|
|
3.56
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFTK (available freight tonne – kilometres)
(millions)
|
|
|
3,838.08
|
|
|
|
3,670.13
|
|
|
|
4.58
|
%
|
|
– Domestic routes
|
|
|
1,037.27
|
|
|
|
952.80
|
|
|
|
8.87
|
%
|
|
– International routes
|
|
|
2,663.27
|
|
|
|
2,599.07
|
|
|
|
2.47
|
%
|
|
– Regional routes
|
|
|
137.55
|
|
|
|
118.26
|
|
|
|
16.31
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hours flown
(thousands)
|
|
|
742.20
|
|
|
|
675.40
|
|
|
|
9.89
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Traffic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RTK (revenue tonne – kilometres)
(millions)
|
|
|
7,448.45
|
|
|
|
6,860.66
|
|
|
|
8.57
|
%
|
|
– Domestic routes
|
|
|
3,960.57
|
|
|
|
3,633.80
|
|
|
|
8.99
|
%
|
|
– International routes
|
|
|
3,255.48
|
|
|
|
3,002.16
|
|
|
|
8.44
|
%
|
|
– Regional routes
|
|
|
232.40
|
|
|
|
224.70
|
|
|
|
3.43
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RPK (revenue passenger – kilometres)
(millions)
|
|
|
57,854.75
|
|
|
|
51,546.12
|
|
|
|
12.24
|
%
|
|
– Domestic routes
|
|
|
39,473.83
|
|
|
|
35,909.13
|
|
|
|
9.93
|
%
|
|
– International routes
|
|
|
16,424.72
|
|
|
|
13,737.59
|
|
|
|
19.56
|
%
|
|
– Regional routes
|
|
|
1,956.20
|
|
|
|
1,899.41
|
|
|
|
2.99
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RFTK (revenue freight tonne – kilometres)
(millions)
|
|
|
2,298.05
|
|
|
|
2,267.02
|
|
|
|
1.37
|
%
|
|
– Domestic routes
|
|
|
441.29
|
|
|
|
429.43
|
|
|
|
2.76
|
%
|
|
– International routes
|
|
|
1,797.26
|
|
|
|
1,781.11
|
|
|
|
0.91
|
%
|
|
– Regional routes
|
|
|
59.51
|
|
|
|
56.47
|
|
|
|
5.38
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of passengers carried
(thousands)
|
|
|
37,795.49
|
|
|
|
34,613.85
|
|
|
|
9.19
|
%
|
|
– Domestic routes
|
|
|
31,971.90
|
|
|
|
29,429.41
|
|
|
|
8.64
|
%
|
|
– International routes
|
|
|
4,388.08
|
|
|
|
3,813.17
|
|
|
|
15.08
|
%
|
|
– Regional routes
|
|
|
1,435.51
|
|
|
|
1,371.27
|
|
|
|
4.68
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weight of freight carried (kg)
(millions)
|
|
|
661.66
|
|
|
|
682.30
|
|
|
|
–3.03
|
%
|
|
– Domestic routes
|
|
|
319.43
|
|
|
|
317.47
|
|
|
|
0.62
|
%
|
|
– International routes
|
|
|
294.04
|
|
|
|
319.12
|
|
|
|
–7.86
|
%
|
|
– Regional routes
|
|
|
48.19
|
|
|
|
45.71
|
|
|
|
5.43
|
%
|
INTERIM REPORT 2013
SUMMARY OF SELECTED OPERATING DATA
|
|
|
For the six months ended 30 June
|
|
|
|
|
2013
|
|
|
2012
|
|
|
Change
|
|
|
Load factors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Overall load factor
(%)
|
|
|
71.60
|
%
|
|
|
71.94
|
%
|
|
|
–0.34
|
pts
|
|
– Domestic routes
|
|
|
71.98
|
%
|
|
|
72.40
|
%
|
|
|
–0.42
|
pts
|
|
– International routes
|
|
|
71.93
|
%
|
|
|
71.99
|
%
|
|
|
–0.06
|
pts
|
|
– Regional routes
|
|
|
61.95
|
%
|
|
|
64.62
|
%
|
|
|
–2.67
|
pts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Passenger load factor
(%)
|
|
|
79.31
|
%
|
|
|
79.07
|
%
|
|
|
0.24
|
pts
|
|
– Domestic routes
|
|
|
79.56
|
%
|
|
|
79.48
|
%
|
|
|
0.08
|
pts
|
|
– International routes
|
|
|
79.38
|
%
|
|
|
78.68
|
%
|
|
|
0.70
|
pts
|
|
– Regional routes
|
|
|
74.10
|
%
|
|
|
74.51
|
%
|
|
|
–0.41
|
pts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freight load factor
(%)
|
|
|
59.87
|
%
|
|
|
61.77
|
%
|
|
|
–1.90
|
pts
|
|
– Domestic routes
|
|
|
42.54
|
%
|
|
|
45.07
|
%
|
|
|
–2.53
|
pts
|
|
– International routes
|
|
|
67.48
|
%
|
|
|
68.53
|
%
|
|
|
–1.05
|
pts
|
|
– Regional routes
|
|
|
43.26
|
%
|
|
|
47.75
|
%
|
|
|
–4.49
|
pts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yields and costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue tonne – kilometres yield
(RMB)
|
|
|
5.13
|
|
|
|
5.48
|
|
|
|
–6.39
|
%
|
|
– Domestic routes
|
|
|
6.18
|
|
|
|
6.65
|
|
|
|
–7.07
|
%
|
|
– International routes
|
|
|
3.62
|
|
|
|
3.87
|
|
|
|
–6.46
|
%
|
|
– Regional routes
|
|
|
8.24
|
|
|
|
7.92
|
|
|
|
4.04
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Passenger – kilometres yield
(RMB)
|
|
|
0.60
|
|
|
|
0.65
|
|
|
|
–7.69
|
%
|
|
– Domestic routes
|
|
|
0.61
|
|
|
|
0.65
|
|
|
|
–6.15
|
%
|
|
– International routes
|
|
|
0.55
|
|
|
|
0.62
|
|
|
|
–11.29
|
%
|
|
– Regional routes
|
|
|
0.86
|
|
|
|
0.82
|
|
|
|
4.88
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freight tonne – kilometres yield
(RMB)
|
|
|
1.54
|
|
|
|
1.77
|
|
|
|
–12.99
|
%
|
|
– Domestic routes
|
|
|
1.31
|
|
|
|
1.57
|
|
|
|
–16.56
|
%
|
|
– International routes
|
|
|
1.52
|
|
|
|
1.74
|
|
|
|
–12.64
|
%
|
|
– Regional routes
|
|
|
3.88
|
|
|
|
3.92
|
|
|
|
–1.02
|
%
|
CHINA EASTERN AIRLINES CORPORATION LIMITED
SUMMARY OF SELECTED OPERATING DATA
FLEET STRUCTURE
|
|
|
|
|
Fleet structure as at 30 June 2013
|
|
|
|
|
|
|
|
|
|
Self-owned
|
|
|
Under
|
|
|
|
|
|
|
|
|
|
and under
|
|
|
operating
|
|
|
|
|
|
No.
|
|
Model
|
|
finance lease
|
|
|
lease
|
|
|
Sub-total
|
|
|
Passenger aircraft
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wide-body aircraft
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
A340-600
|
|
|
5
|
|
|
|
–
|
|
|
|
5
|
|
|
2
|
|
A330-300
|
|
|
8
|
|
|
|
7
|
|
|
|
15
|
|
|
3
|
|
A330-200
|
|
|
13
|
|
|
|
3
|
|
|
|
16
|
|
|
4
|
|
A300-600R
|
|
|
7
|
|
|
|
–
|
|
|
|
7
|
|
|
5
|
|
B767
|
|
|
6
|
|
|
|
1
|
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Narrow-body aircraft
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6
|
|
A321
|
|
|
31
|
|
|
|
–
|
|
|
|
31
|
|
|
7
|
|
A320
|
|
|
99
|
|
|
|
37
|
|
|
|
136
|
|
|
8
|
|
A319
|
|
|
13
|
|
|
|
8
|
|
|
|
21
|
|
|
9
|
|
B757-200
|
|
|
5
|
|
|
|
5
|
|
|
|
10
|
|
|
10
|
|
B737-800
|
|
|
20
|
|
|
|
58
|
|
|
|
78
|
|
|
11
|
|
B737-700
|
|
|
39
|
|
|
|
18
|
|
|
|
57
|
|
|
12
|
|
B737-300
|
|
|
16
|
|
|
|
–
|
|
|
|
16
|
|
|
13
|
|
CRJ-200
|
|
|
8
|
|
|
|
–
|
|
|
|
8
|
|
|
14
|
|
EMB-145LR
|
|
|
10
|
|
|
|
–
|
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total number of passenger aircraft
|
|
|
|
|
280
|
|
|
|
137
|
|
|
|
417
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freighter
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15
|
|
MD-11F
|
|
|
–
|
|
|
|
1
|
|
|
|
1
|
|
|
16
|
|
A300-600R
|
|
|
2
|
|
|
|
–
|
|
|
|
2
|
|
|
17
|
|
B747
|
|
|
2
|
|
|
|
3
|
|
|
|
5
|
|
|
18
|
|
B757-200F
|
|
|
–
|
|
|
|
2
|
|
|
|
2
|
|
|
19
|
|
B777F
|
|
|
–
|
|
|
|
6
|
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total number of freighters
|
|
|
|
|
4
|
|
|
|
12
|
|
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total number of passenger aircraft and freighters
|
|
|
284
|
|
|
|
149
|
|
|
|
433
|
|
INTERIM REPORT 2013
SUMMARY OF SELECTED OPERATING DATA
|
|
|
|
|
Fleet structure as at 30 June 2013
|
|
|
|
|
|
No. of
|
|
|
|
No.
|
|
Model
|
|
custody
|
|
|
|
|
|
|
|
|
|
|
|
Business aircraft
|
|
|
|
|
|
|
|
|
|
Gulfstream G550
|
|
3
|
|
|
|
|
|
Gulfstream G450
|
|
1
|
|
|
|
|
|
Gulfstream G200
|
|
1
|
|
|
|
|
|
Global Express
|
|
1
|
|
|
|
|
|
Cessna 680
|
|
1
|
|
|
|
|
|
Legacy 650
|
|
3
|
|
|
|
|
|
Hawker K-800XP
|
|
1
|
|
|
|
|
|
Challenger 300
|
|
1
|
|
|
|
|
|
Airbus A318
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
Total number of business aircraft
|
|
|
|
13
|
|
|
|
|
|
|
|
|
|
|
|
Total number of aircraft
|
|
|
|
|
|
446
|
CHINA EASTERN AIRLINES CORPORATION LIMITED
MANAGEMENT DISCUSSION AND ANALYSIS
REVIEW OF OPERATIONS
In the first half of 2013, facing the unfavourable
factors such as the sluggish global economy, slowdown of growth of the PRC domestic economy, decreased business passenger demand,
the continuously low demand for Japan routes, together with the passengers’ preference for railway over airline transportation
becoming more common and the short-term effects of the avian influenza (H7N9) in Eastern China, the Group, under the premise of
ensuring flight safety, adjusted the allocation of its flight capacity and the structure of its route network in a timely manner,
strengthened its marketing efforts and maintained stringent cost control to facilitate its strategic transformation. In the first
half of 2013, the Group achieved revenues of RMB42,276 million, representing an increase of 2.92% from the same period last year.
Net profit attributable to the equity shareholders of the Company was RMB622 million, representing a decrease of 28.16% from the
same period last year.
In the first half of 2013, in response
to the changes in demand of the air passenger market, the Group allocated its flight capacity accordingly, optimising its route
network, decreasing the flight capacity of Japan routes and allocating more flight capacity to Europe, America, Australia and South-East
Asia routes. In the first half of 2013, ASK (available seat – kilometres) was 72,946 million passenger- kilometres, representing
an increase of 11.90% from the same period last year. The Group carried 37.7955 million passengers, representing an increase of
9.19% over the same period last year, and achieved a passenger load factor of 79.31%, representing an increase of 0.24 percentage
points over the same period last year. Passenger revenue increased by 3.28% to RMB34,665 million as compared with that of the same
period last year.
In the first half of 2013, with the continued
downturn of the global freight transport market, the Group adapted to the changes in market demand by reducing its freight fleet,
focusing on facilitating the transformation of its logistic segment and developed its core business for each business sectors such
as logistic integrator and express business after the transformation. In the first half of 2013, the Group had an AFTK (available
freight tonne – kilometres) of 3,838 million tonne – kilometres, representing an increase of 4.58% from the same period
last year. Freight carried was 661.66 million kilogrammes, representing a decrease of 3.03% from the same period last year. Freight
load factor was 59.87%, representing a decrease of 1.90 percentage points from the same period last year. Freight traffic revenue
was RMB3,531 million, representing a decrease of 11.8% from the same period last year.
INTERIM REPORT 2013
MANAGEMENT DISCUSSION AND ANALYSIS
OPERATIONS
Safety Development
Based on the principle of “Ensuring
Safety and Promoting Development”, the Group further strengthened its efforts to troubleshoot hidden and potential risks,
implemented safety responsibilities, reinforced training on flying skills and strengthened the Group’s safety management
to ensure flight safety, aviation security and ground safety. In the first half of 2013, the Group recorded a total of 742,187
hours and 329,581 safe flights, representing an increase of 9.89% and 7.2%, respectively, as compared to the corresponding period
last year.
Optimisation of Fleet
In the first half of 2013, the Group introduced
a total of twenty passenger aircraft, including models such as A330 Series for long-and-medium haul, A320 Series and B737NG for
medium-and-short haul, retired three freighters including models such as MD-11 and A300-600R and added one business aircraft under
custody.
As at 30 June 2013, the Group operated
a total of 446 aircraft, including 417 passenger aircraft, 16 freighters and 13 business aircraft under custody.
Hub Development
The Group strived to further expand the
coverage of its hub network by strengthening the development of its core hub in Shanghai and regional hubs in Kunming and Xi’an.
The Group continued to optimise its express and quasi-express routes to enhance its control over the domestic route market, which
is connected to its Shanghai hub. Additional flight capacity was allocated to its hub in Kunming to establish Kunming as a portal
to South Asia, South East Asia and West Asia. Time slots for the Xi’an hub were optimised to increase the number of flights
of the Group’s branches to Northwest China via Xi’an to further strengthen this hub. In the first half of 2013, the
Group accounted for 48.8%, 37.4%, 45.0% and 31.3% of the total market share at Shanghai Hongqiao International Airport, Shanghai
Pudong International Airport, Kunming Airport and Xi’an Airport, respectively, in terms of total flight departures and arrivals,
and accounted for 47.7%, 35.5%, 41.8% and 31.4% of the total market share at Shanghai Hongqiao International Airport, Shanghai
Pudong International Airport, Kunming Airport and Xi’an Airport, respectively, in terms of passenger throughput.
CHINA EASTERN AIRLINES CORPORATION LIMITED
MANAGEMENT DISCUSSION AND ANALYSIS
Marketing Business
The Group flexibly adjusted its sales strategies
based on changes in market demand by actively exploring and expanding its marketing channels with a focus on the development of
corporate clients and continued to develop customer services. In the first half of 2013, the Group added 639 corporate clients,
for a total of 4,680 corporate clients. The Group promoted the development of frequent flyers by launching various member activities
for frequent flyers to encourage members’ participation. As at the end of June 2013, the total number of frequent flyers
members amounted to 19.85 million. The Company also stepped up its effort in direct sales. As a result, the proportion of income
from direct sales has increased significantly. The Company has also actively promoted various marketing products and developed
value-added services and products by cooperating across different industries, including an air-bus transportation product known
as “Air-Bus Service”, which was jointly launched with Shanghai Pudong International Airport. In addition, various transit
marketing products were launched by the Group, which implemented a “72-hours visa-free” policy. The Group has also
jointly promoted overseas tourism services with overseas institutions such as Tourism Australia and Tourism Queensland.
Cost Control
The Group further strengthened its centralised
management of funds and improved its capital usage efficiency; stepped up its effort in route optimisation and enhanced its efforts
on flight weight reduction and fuel savings to continuously reduce costs and improve efficiency; and continued to diversify its
financing channels. In the first half of 2013, the Company completed a non-public issuance of A shares and H shares to China Eastern
Air Holding Company (“
CEA Holding
”) (the controlling shareholder of the Company) and its subsidiaries, 東航金戎控股有限責任公司
(CES Finance Holding Co., Ltd) (“
CES Finance
”) and 東航國際控 股（香
港 ）有限公司 (CES Global Holding (Hong Kong) Limited) (“
CES Global
”),
which raised funds of approximately RMB3.582 billion, and optimised the Group’s asset and liability structure. The Company
also issued RMB corporate bonds of RMB4.8 billion, offshore RMB- denominated bonds of RMB2.2 billion and super-short-term commercial
paper of RMB4 billion, which reduced its finance costs.
Service Brand
Adhering to the philosophy of “Customer-Oriented
and Dedicated Service”, the Group optimised its service processes and enhanced its service quality, with a view to establishing
CEA’s service image of “Accurate, Dedicate, Refine and Excellent”. In the first half of 2013, the Group also
upgraded its service facilities in various aspects, including completing the change of uniform of frontline staff. It also brought
new experience to passengers by changing pre-flight boarding music and promoting the use of aromatic scents in the flight cabin.
In addition, the Group’s new VIP lounge in Hangzhou commenced operations, and ground VIP lounges in several major markets
have been renovated. Meanwhile, the Company also introduced customised service products, such as “東方尊享
(Eastern Premium)” and “Customised Cuisine”.
INTERIM REPORT 2013
MANAGEMENT DISCUSSION AND ANALYSIS
Information Technology
The Group took a proactive approach towards
the construction of e-commerce channels by upgrading both the official domestic and international websites of the Group. In response
to new trends such as mobile applications, the Company launched external service platforms such as the China Eastern Mobile website
and an official WeChat account. Meanwhile, the Group enhanced the promotion of self-services by adding self-service check-ins in
many airports in China. The Company believes that these services have provided passengers with a better experience, as they are
able to use various e-channels, including the Company’s official website, “Mobile E” mobile phone application,
SMS or WeChat platforms and Weibo.
Transformation and Development
The Group made strenuous effort to
push forward its transformation from an air passenger and freight carrier to an integrated aviation services and logistics
services provider. For the passenger transport transformation, the Company has focused on enhancing customer value,
introduced value-added service marketing products such as customised services, carried forward its research on a business
model of acting as a third party integration platform, and accelerated the development of a retail air mall. For freight
transport transformation, the integrated logistics service business of
東方航空物流有限公司 (Eastern Airlines Logistics Co., Ltd.) is
able to provide logistics solutions to nearly 60 customers, while introducing an innovative commercial business model of
“Freight Expressway + E-commerce + Trading” for its freight expressway business, which has provided a strong
platform for the construction of a public logistics system.
Alliance and Cooperation
By proactively utilising the SkyTeam Alliance
platform and route network of SkyTeam member airlines, the Company was able to expand the Group’s route network to provide
services to more than 1,000 destinations in 187 countries around the world. It has also commenced code-sharing operations with
10 SkyTeam member airlines, covering 323 routes. In addition, the Company has also extensively cooperated with SkyTeam members
to jointly operate routes and work together on frequent flyers, alliance fares, VIP services and ground support.
In the first half of 2013, the Group started
its code-sharing cooperation with 7 non-SkyTeam member airlines, covering 155 routes, including Japan Airlines Corporation and
Qantas Airways Limited (“
Qantas
”).
In addition, Jetstar Hong Kong Limited
(“
Jetstar Hong Kong
”), the joint venture low-cost airline established by the Group and Qantas in Hong Kong,
introduced Go Harvest Investments Limited (“
Shun Tak Investor
”), a wholly-owned subsidiary of Shun Tak Holdings
Limited, a local shareholder in Hong Kong and a third party, in the first half of 2013. Each of the three parties held one-third
of the equity interest of Jetstar Hong Kong, which is currently in the process of applying for an aviation services licence.
CHINA EASTERN AIRLINES CORPORATION LIMITED
MANAGEMENT DISCUSSION AND ANALYSIS
Social Responsibilities
While pursuing sustainable enterprise development,
the Group has adopted a social responsibility philosophy with respect to corporate decision making and operations, which seeks
to unify corporate development and social responsibility.
On 20 April 2013, subsequent to the earthquake
in Ya’an City, Sichuan Province, the Group immediately established a frontline command centre for earthquake relief efforts,
urgently transferred flight capacity to relieve stranded passengers, established a “dedicated channel” for search and
rescue use, and actively engaged in earthquake relief efforts.
The Group regards “Energy-Saving
and Low-Carbon for Green Growth” as a major component of its social responsibilities. Over 90% of the Group’s flights
refuelled and flew according to its “low-carbon flying” program. The Group also enhanced the environmental performance
of its fleet by eliminating and surrendering the lease of older aircraft and introducing new, more fuel-efficient aircraft. In
April 2013, the Group successfully completed a trial flight using a proprietary biological jet fuel, which was the first of its
kind in China.
The Company was awarded the National
Labor Medal, the “2012 Brand Golden Fair Award – Annual Corporate Social Responsibilities Brand”, as well
as the “Best Managed Company in China – Mid-Cap Company Award” in 2012 by Hong Kong Asia Money. It was also
recognised as one of the Top 10 Companies with the Best Corporate Social Responsibility
(企業社會責任排行榜前10強) by Fortune China
Magazine.
FINANCIAL OVERVIEW
Operating Revenues
In the first half of 2013, the Group had
revenues of RMB42,276 million, representing an increase of 2.92% from the same period last year. Of total revenues, traffic revenues
were RMB38,196 million, representing an increase of 1.67% from the same period last year. In the first half of 2013, the total
traffic volume of the Group was 7,448 million tonne-kilometres, representing an increase of 8.57% from the same period last year.
In the first half of 2013, passenger revenues
increased by 3.28%, to RMB34,665 million, compared to the same period last year, which accounted for 90.76% of the Group’s
traffic revenues. Passenger traffic volume was 57,855 million passenger kilometres, representing an increase of 12.24% from the
same period last year.
INTERIM REPORT 2013
MANAGEMENT DISCUSSION AND ANALYSIS
Passenger traffic volume on domestic routes
was 39,474 million passenger kilometres, representing an increase of 9.93% from the same period last year. Compared to the same
period last year, domestic passenger revenues increased by 1.75% to RMB23,918 million, accounting for 69% of total passenger revenues.
Passenger traffic volume on international
routes was 16,425 million passenger kilometres, representing an increase of 19.56% from the same period last year. Compared to
the same period last year, international passenger revenues increased by 6.64% to RMB9,063 million, accounting for 26.14% of total
passenger revenues.
Passenger traffic volume on regional routes
was 1,956 million passenger kilometres, representing an increase of 2.99% from the same period last year. Compared to the same
period last year, regional passenger revenues increased by 8.08% to RMB1,685 million, accounting for 4.86% of total passenger revenues.
In the first half of 2013, cargo and mail
traffic revenues were RMB3,531 million, representing a decrease of 11.80% from the same period last year, and accounted for 9.24%
of the Group’s traffic revenue. Cargo and mail traffic volume was 2,298 million tonne-kilometres, representing an increase
of 1.37% from the same period last year.
In the first half of 2013, other revenues
of the Group amounted to RMB3,428 million, representing an increase of 29.65% compared to the same period last year, which was
primarily attributable to the increase in revenue from the expansion of the business scale of certain subsidiaries of the Company.
Operating Expenses
The total operating costs of the Group
for the first half of 2013 increased by 7.43% to RMB42,141 million compared to the same period last year.
In the first half of 2013, the Group’s
expenditures on aircraft fuel was RMB14,978 million, representing an increase of 2.09% compared to the same period last year and
accounting for 35.54% of its operating costs. This increase was mainly attributable to approximately 11% increase in the aviation
fuel consumption of the Group, partially offset by a decrease of 9.18% in average fuel prices both compared to the same period
last year.
In the first half of 2013, the Group’s
take-off and landing charges were RMB4,579 million, representing an increase of 6.29% from the same period last year, which was
primarily attributable to the year-on-year increase in the number of take-offs and landings of the Group’s aircraft.
CHINA EASTERN AIRLINES CORPORATION LIMITED
MANAGEMENT DISCUSSION AND ANALYSIS
In the first half of 2013, the Group’s
depreciation and amortisation expenses were RMB3,964 million, representing an increase of 9.11% compared to the same period last
year, which was primarily attributed to the addition of new aircraft and engines by the Group, resulting in a greater base for
depreciation and amortisation.
In the first half of 2013, the Group’s
wages, salaries and benefits expenses were RMB4,649 million, representing an increase of 6.04% compared to the same period last
year. This was mainly due to the adjustment of the social security base for Group employees and an increase in flying hours.
In the first half of 2013, the Group’s
aircraft maintenance expenses were RMB2,301 million, representing an increase of 5.86% compared to the same period last year. This
increase was primarily attributable to an increase of aircraft under operating leases and an increase in flying hours which resulted
in increased per-hour fee rate of maintenance for aircraft under operating leases.
In the first half of 2013, the Group’s
food and beverages expenses were RMB1,089 million, representing an increase of 14.15% compared to the same period last year, which
was primarily attributable to the increase in number of passengers.
In the first half of 2013, the Group’s
aircraft operating lease rentals were RMB2,149 million, representing an increase of 3.95% compared to the same period last year.
This increase was primarily attributable to the increased number of aircraft under operating leases during the first half of 2013.
In the first half of 2013, the Group’s
sales and marketing expenses were RMB1,873 million, representing an increase of 8.86% compared to the same period last year. This
increase was primarily attributable to increased handling fees of agency businesses and an increase in reservation fees due to
the growth in the number of passengers.
In the first half of 2013, the amount of
civil aviation infrastructure levies payable to the Civil Aviation Administration of China was RMB751 million, representing an
increase of 11.19% compared to the same period last year. This increase was primarily due to an increase in miles flown by the
Company in 2013.
In the first half of 2013, the Group’s
other operating expenses were RMB5,192 million, representing an increase of 27.74% compared to the same period last year. This
increase was primarily attributable to an increase in costs and expenses following the expansion of the business scale of certain
subsidiaries of the Company.
INTERIM REPORT 2013
MANAGEMENT DISCUSSION AND ANALYSIS
Other Operating Income
In the first half of 2013, the Group’s
other operating income was RMB652 million, representing a decrease of 24.63% compared to the same period last year. This increase
was mainly due to a decrease in operating subsidies received from the government by the Group.
Net Exchange Gains/(Losses) and Finance
Costs
In the first half of 2013, the Group’s
net exchange gains were RMB1,174 million, representing an increase of 615.07%, which was primarily attributable to the continuing
appreciation of the Renminbi against US Dollar during the period. Finance costs amounted to RMB773 million, representing a decrease
of 8.74% as compared to the same period last year.
Profit
The net profit attributable to the equity
shareholders of the Company for the half year ended 30 June 2013 was RMB622 million, representing a decrease of 28.16%. Earnings
per share attributable to equity shareholders of the Company was RMB0.0535. The weighted average number of ordinary shares of the
Company issued and outstanding as at 30 June 2013 was 11,602,676,000 shares.
Liquidity, Source of Capital and Capital
Structure
The Group generally finances its working
capital requirements through business operations and short- term bank loans. As at 30 June 2013 and 2012, the Group’s cash
and cash equivalents amounted to RMB3,672 million and RMB5,361 million, respectively. Net cash inflow generated from the Group’s
operating activities was RMB3,780 million and RMB5,847 million, respectively, for the same periods. Other than expenditures for
operating costs, the Group’s primary cash requirements in the first half of 2013 were for acquisitions of, and improvements
in, aircraft and flight equipment, and for the payment of related indebtedness. During the period ended 30 June 2013 and 2012,
the Group’s net cash outflow from investment activities was RMB10,775 million and RMB3,862 million, respectively. During
the period ended 30 June 2013, net cash inflow from the Group’s financing activities was RMB8,163 million. During the period
ended 30 June 2012, net cash outflow from the Group’s financing activities was RMB488 million.
The Group generally operates with net current
liabilities. As at 30 June 2013, the Group’s current liabilities exceeded its current assets by RMB33,562 million. The Group
has been and believes it will continue to be capable of financing its working capital by obtaining loans from domestic and foreign
banks in China.
CHINA EASTERN AIRLINES CORPORATION
LIMITED
MANAGEMENT DISCUSSION AND ANALYSIS
The Group monitors its capital on the basis
of its debt ratio, which is calculated as total liabilities divided by total assets. As at 30 June 2013, the debt ratio of the
Group was 80.55%.
As at 30 June 2013 and 31 December 2012,
the Group’s borrowings payable within one year were RMB22,684 million and RMB22,640 million, respectively. As at 30 June
2013, the Group’s borrowings payable from one to two years, from three to five years and beyond five years were RMB4,007
million, RMB14,245 million and RMB11,345 million, respectively, as compared to RMB7,273 million, RMB7,906 million and RMB7,918
million, respectively, as at 31 December 2012.
The Group’s obligations under finance
leases as at 30 June 2013 and 31 December 2012 were RMB20,137 million and RMB21,858 million, respectively. As at 30 June 2013,
the Group’s lease obligations payable within two years, from three to five years and beyond five years were RMB5,273 million,
RMB7,451 million and RMB7,413 million, respectively, as compared to RMB5,309 million, RMB7,925 million and RMB8,624 million, respectively,
as at 31 December 2012.
As at 30 June 2013, the Group’s borrowings
comprised USD-denominated borrowings equivalent to RMB35,608 million, RMB-denominated borrowings of RMB16,413 million and JPY-denominated
borrowings of RMB260 million. Fixed-rate borrowings accounted for 27.4% of the total borrowings, and floating-rate borrowings accounted
for 72.6% of the total borrowings. As at 31 December 2012, the Group’s borrowings comprised USD-denominated borrowings equivalent
to RMB31,605 million and RMB-denominated borrowings of RMB13,827 million. Fixed-rate borrowings accounted for 22.91% of the total
borrowings, and floating-rate borrowings accounted for 77.09% of the total borrowings.
As at 30 June 2013, the Group’s obligations
under finance leases comprised USD-denominated obligations equivalent to RMB17,341 million, SGD-denominated obligations equivalent
to RMB1,121 million, HKD-denominated obligations equivalent to RMB1,116 million and JPY-denominated obligations equivalent to RMB559
million. The Group’s obligations under finance leases comprised only floating-rate obligations. As at 31 December 2012, the
Group’s obligations under finance leases comprised USD- denominated obligations equivalent to RMB18,752 million, SGD-denominated
obligations of RMB1,249 million, HKD-denominated obligations equivalent to RMB1,190 million and JPY-denominated obligations of
RMB668 million.
INTERIM REPORT 2013
MANAGEMENT DISCUSSION AND ANALYSIS
Exchange Rate Fluctuation Risk
Since 21 July 2005, the PRC government
has adjusted the Renminbi exchange rate system and established a floating exchange rate system by which the exchange rate would
be adjusted and managed based on market supply and demand, with reference to a basket of foreign currencies. The fluctuation in
the Renminbi exchange rate is affected by domestic and international economic, political conditions and general currency supply
and demand dynamics. As such, future Renminbi exchange rates may fluctuate and be materially different from current exchange rates.
The Group operates its business in many
countries and territories and generates revenues in different currencies. As such, its foreign currency liabilities are generally
much higher than its foreign currency assets. The Group’s major liability (purchases or leases of aircraft) is mainly priced
and settled in US dollars. In addition, fluctuations in foreign exchange rates will affect the Group’s costs incurred from
foreign purchases such as aircraft, flight equipment, jet fuel and take-off and landing charges in foreign airports. As at 30 June
2013, the Group’s total interest-bearing liabilities denominated in foreign currencies, equivalent to Renminbi, amounted
to RMB56,005 million, of which US dollar liabilities accounted for 94.54% of the total amount. Therefore, significant fluctuations
in foreign exchange rates could expose the Group to foreign exchange gains/losses arising from the translation of foreign currency
denominated liabilities, which will also affect the profitability and development of the Group. The Group typically uses hedging
contracts for foreign currencies to reduce the foreign exchange risks for foreign currency revenue generated from ticket sales,
and expenses to be paid in foreign currencies. The Group’s foreign currency hedging mainly involves the sales of Japanese
Yen and the purchase of US dollars at fixed exchange rates. As at 30 June 2013, foreign currency hedging contracts held by the
Group amounted to a notional amount of USD28 million (31 December 2012: USD58 million), and will expire between 2013 and 2017.
As at 30 June 2013 and 2012, the Group
recorded foreign exchange gains of RMB1,174 million and foreign exchange losses of RMB228 million, respectively.
Pledges on Assets and Contingent Liabilities
The Group generally finances the purchases
of aircraft with finance leases and bank loans, which are secured by its assets. As at 30 June 2013, the value of the Group’s
assets pledged for certain bank loans was RMB19,071 million, representing a decrease of 15.44% from RMB22,554 million as at the
end of 2012.
CHINA EASTERN AIRLINES CORPORATION LIMITED
MANAGEMENT DISCUSSION AND ANALYSIS
Employees
As at 30 June 2013, the Group had 67,298
employees, the majority of whom were located in the PRC. The wages of the Group’s employees generally consisted of basic
salaries and performance bonuses. In the first half of 2013, the Group was not involved in any major labour disputes with its employees,
nor did it experience any significant turnover of employees or encounter any difficulties in recruiting new employees.
Outlook for the Second Half of 2013
The Group would like to caution readers
of this report that this 2013 interim report contains certain forward-looking statements, including descriptions of the Group’s
future operating plans for the second half of 2013 and beyond, and a general outlook of international and domestic economies and
the aviation industry. Such forward-looking statements are subject to many uncertainties and risks that are beyond the control
of the Group. Actual events may be materially different from these forward-looking statements.
In the second half of 2013, overall demand
in the aviation market is expected to improve as compared to the first half of the year. However, the Group is expected to continue
experiencing adverse conditions, including: slowdown of macroeconomic growth; decrease in business passenger demand; continued
passengers’ preference for railway over airline transportation; and the expected lack of recovery of the Japan air routes.
In the second half of 2013, the Group will
focus on: (1) reinforcing foundations of safety management and implementing safety responsibilities to ensure continued safe operation;
(2) allocating flight capacity during peak seasons, optimising its route network to enhance its marketing with respect to passenger
and freight transport operations, while maintaining stringent cost controls; (3) based on its information technology construction,
accelerating the innovation of business models and continuing with the transformation and development of passenger and freight
transport operations; (4) strengthening its efforts to improve service management, enhancing its service assurance capabilities,
improving its service quality and upgrading the Company’s brand.
INTERIM REPORT 2013
MANAGEMENT DISCUSSION AND ANALYSIS
FLEET PLAN
The fleet of the Group in the future will
mainly comprise of models such as B777 Series for long haul, A330 Series for long-and-medium haul, and A320 Series and B737NG for
medium-and-short haul. Older aircraft models will be retired as appropriate. Details of the expected fleet plan for the second
half of the year and 2014 are as follows:
Introduction and Retirement Plan of Aircraft
for the Second Half of 2013 and 2014
|
Models
|
|
Second Half of 2013
|
|
|
2014
|
|
|
|
|
Introduction
|
|
|
Retirement
|
|
|
Introduction
|
|
|
Retirement
|
|
|
|
|
(units)
|
|
|
(units)
|
|
|
(units)
|
|
|
(units)
|
|
|
Passenger aircraft
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A320 Series
|
|
|
14
|
|
|
|
4
|
|
|
|
34
|
|
|
|
13
|
|
|
A330 Series
|
|
|
5
|
|
|
|
–
|
|
|
|
8
|
|
|
|
–
|
|
|
A340-600
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
1
|
|
|
B777 Series
|
|
|
–
|
|
|
|
–
|
|
|
|
4
|
|
|
|
–
|
|
|
B737NG
|
|
|
19
|
|
|
|
2
|
|
|
|
24
|
|
|
|
6
|
|
|
B757
|
|
|
–
|
|
|
|
3
|
|
|
|
–
|
|
|
|
1
|
|
|
B767
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
1
|
|
|
CRJ
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total number of passenger aircraft
|
|
|
38
|
|
|
|
9
|
|
|
|
70
|
|
|
|
30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freighter
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A300-600F
|
|
|
–
|
|
|
|
2
|
|
|
|
–
|
|
|
|
–
|
|
|
B747F
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
1
|
|
|
MD-11
|
|
|
–
|
|
|
|
1
|
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total number of freighters
|
|
|
–
|
|
|
|
3
|
|
|
|
–
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
38
|
|
|
|
12
|
|
|
|
70
|
|
|
|
31
|
|
CHINA EASTERN AIRLINES CORPORATION LIMITED
MANAGEMENT DISCUSSION AND ANALYSIS
MATERIAL MATTERS
The Board did not recommend a payment of any interim dividend
for the half year ended 30 June 2013.
|
|
2.
|
Share capital
structure of the Company as at 30 June 2013:
|
|
|
|
|
|
|
|
|
Approximate
|
|
|
|
|
|
|
|
|
|
percentage of
|
|
|
|
|
|
|
Total number
|
|
|
shareholding
|
|
|
|
|
|
|
of Shares
|
|
|
(%)
|
|
|
I
|
|
A shares
|
|
|
|
|
|
|
|
|
|
|
|
1. Listed shares with trading moratorium
|
|
|
698,865,000
|
|
|
|
5.514
|
|
|
|
|
2. Listed shares without trading moratorium
|
|
|
7,782,213,860
|
|
|
|
61.402
|
|
|
II
|
|
H Shares
|
|
|
|
|
|
|
|
|
|
|
|
1. Listed shares with trading moratorium
|
|
|
698,865,000
|
|
|
|
5.514
|
|
|
|
|
2. Listed shares without trading moratorium
|
|
|
3,494,325,000
|
|
|
|
27.570
|
|
|
III
|
|
Total number of Shares
|
|
|
12,674,268,860
|
|
|
|
100
|
|
|
Notes:
|
1.
|
The 698,865,000 A shares, which are listed shares with trading moratorium issued on the Shanghai Stock Exchange by the Company to its controlling shareholder, CEA Holding and its wholly-owned subsidiary, CES Finance, by way of non-public issuance on 16 April 2013, are subject to a lock-up period of 36 months. For details, please refer to the announcement of the Company dated 17 April 2013 issued in Hong Kong.
|
|
|
|
|
|
|
2.
|
The 698,865,000 H shares,
which are listed shares with trading moratorium issued on The Stock Exchange of Hong Kong Limited (the “
Hong Kong
Stock Exchange
”) by the Company to CES Global, an overseas wholly-owned subsidiary of CEA Holding,
by way of specific issuance on 21 June 2013, are subject to a lock-up period of 36 months. For details, please refer to the
announcement of the Company dated 21 June 2013 issued in Hong Kong.
|
|
|
|
|
|
|
3.
|
As at the date of this report, the Company had 698,865,000 listed A shares with trading moratorium held by CEA Holding and its wholly-owned subsidiary, CES Finance, and 7,782,213,860 listed A shares without trading moratorium. The Company also had 698,865,000 listed H shares with trading moratorium held by CES Global, an overseas wholly-owned subsidiary of CEA Holding and 3,494,325,000 listed H shares without trading moratorium. The total number of shares amounted to 12,674,268,860 shares.
|
INTERIM REPORT 2013
MANAGEMENT DISCUSSION AND ANALYSIS
|
|
3.
|
Substantial Shareholders
|
So far as the directors of the
Company (the “
Directors
”) are aware, each of the following persons, not being a Director, chief executive,
supervisor of the Company (the “
Supervisors
”) or member of the Company’s senior management, had, as at
30 June 2013, an interest and/or short position in the Company’s shares or underlying shares (as the case may be) which
would fall to be disclosed to the Company and the Hong Kong Stock Exchange under the provisions of Divisions 2 and 3 of Part XV
of the Securities and Futures Ordinance (the “
SFO
”), or was otherwise, as at 30 June 2013, interested in 5%
or more of any class of the then issued share capital of the Company, or was otherwise, as at 30 June 2013, a substantial shareholder
(as defined in the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “
Listing
Rules
”)) of the Company:
|
|
|
|
|
|
|
|
As at 30 June 2013
|
|
|
|
|
|
|
|
|
|
Percentage of
|
|
|
Percentage of
|
|
|
Percentage of
|
|
|
|
|
|
|
|
|
|
shareholding in
|
|
|
shareholding in
|
|
|
shareholding in
|
|
|
|
|
|
|
|
|
|
the Company’s
|
|
|
the Company’s
|
|
|
the Company’s
|
|
|
|
|
Type of
|
|
Number of
|
|
|
total issued
|
|
|
total issued
|
|
|
total issued
|
|
|
Name of Shareholders
|
|
shares held
|
|
shares held
|
|
|
share capital
|
|
|
A shares
|
|
|
H shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CEA Holding
(Note 1)
|
|
A shares
|
|
|
5,530,240,000
|
|
|
|
43.64
|
%
|
|
|
65.21
|
%
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CEA Holding
(Note 2)
|
|
H shares
|
|
|
2,626,240,000
|
|
|
|
20.72
|
%
|
|
|
–
|
|
|
|
62.63
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HKSCC Nominees Limited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Note 3 to 4)
|
|
H shares
|
|
|
3,479,454,299
|
|
|
|
27.45
|
%
|
|
|
–
|
|
|
|
82.98
|
%
|
Notes:
Based on the information available to the Directors as at 30
June 2013 (including such information as was available on the website of the Hong Kong Stock Exchange) and so far as they are
aware of, as at 30 June 2013:
|
|
1.
|
Among such A shares, 5,072,922,927 A shares (representing
approximately 59.81% of the Company’s then total issued A shares) were held by CEA Holding in the capacity of beneficial
owner; and 457,317,073 A shares (representing approximately 5.39% of the Company’s then total issued A shares) were held
by CES Finance in the capacity of beneficial owner, which in turn was 100% held by CEA Holding.
|
CHINA EASTERN AIRLINES CORPORATION LIMITED
MANAGEMENT DISCUSSION AND ANALYSIS
|
|
2.
|
Such H shares were held by CES Global in the capacity of beneficial owner, which in turn was 100%
held by CEA Holding.
|
|
|
3.
|
Among the 3,479,454,299 H shares held by HKSCC Nominees Limited, 1,927,375,000 H shares (representing
approximately 45.96% of the Company’s then total issued H shares) were held by CES Global in the capacity of beneficial owner,
which in turn was 100% held by CEA Holding.
|
|
|
4.
|
Among the 3,479,454,299 H shares held by HKSCC Nominees Limited, JPMorgan Chase & Co. had,
through controlled corporations, an interest in an aggregate of 285,528,752 H shares (representing approximately 6.81% of the Company’s
then total issued H shares). JPMorgan Chase & Co. had interest in the aforesaid 285,528,752 H shares of the Company in manner
as follows:
|
|
|
(a)
|
152,702,000 H shares (representing approximately 3.64%
of the Company’s then total issued H shares) were held by JF Asset Management Limited in the capacity of investment manager,
which in turn was 100% held by JPMorgan Asset Management (Asia) Inc., which in turn was 100% held by JPMorgan Asset Management
Holdings Inc., which in turn was 100% held by JPMorgan Chase & Co.;
|
|
|
(b)
|
46,264,000 H shares (representing approximately 1.10% of the Company’s then total issued
H shares) were held in lending pool by JPMorgan Chase Bank, N.A. in the capacity of custodian corporation/approved lending agent,
which in turn was 100% held by JPMorgan Chase & Co..
|
|
|
(c)
|
31,830,000 H shares (representing approximately 0.76% of the Company’s then total issued
H shares) were held by China International Fund Management Co Ltd in the capacity of investment manager, which in turn was 49%
held by JPMorgan Asset Management (UK) Limited, which in turn was 100% held by JPMorgan Asset Management Holdings (UK) Limited,
which in turn was 100% held by JPMorgan Asset Management International Limited, which in turn was 100% held by JPMorgan Asset Management
Holdings Inc., which in turn was 100% held by JPMorgan Chase & Co.; and
|
|
|
(d)
|
18,342,000 H shares (representing approximately 0.44% of the Company’s then total issued
H shares) were held by JPMorgan Asset Management (Taiwan) Limited in the capacity of investment manager, which in turn was 100%
held by JPMorgan Asset Management (Asia) Inc., which in turn was 100% held by JPMorgan Asset Management Holdings Inc., which in
turn was 100% held by JPMorgan Chase & Co.;
|
|
|
(e)
|
18,786,000 H shares (representing approximately 0.45% of the Company’s then total issued
H shares) were held by JPMorgan Asset Management (Singapore) Limited in the capacity of investment manager, which in turn was 100%
held by JPMorgan Asset Management (Asia) Inc., which in turn was 100% held by JPMorgan Asset Management Holdings Inc., which in
turn was 100% held by JPMorgan Chase & Co.;
|
INTERIM REPORT 2013
MANAGEMENT DISCUSSION AND ANALYSIS
|
|
(f)
|
7,018,050 H shares (representing approximately 0.17%
of the Company’s then total issued H shares) were held by J.P. Morgan Clearing Corp in the capacity of beneficial owner,
which in turn was 100% held by J.P. Morgan Securities LLC, which in turn was 100% held by J.P. Morgan Broker-Dealer Holdings Inc,
which in turn was 100% held by JPMorgan Chase & Co.;
|
|
|
(g)
|
8,880,000 H shares (representing approximately 0.21%
of the Company’s then total issued H shares) were held by JF International Management Inc. in the capacity of investment
manager, which in turn was 100% held by JPMorgan Asset Management (Asia) Inc., which in turn was 100% held by JPMorgan Asset Management
Holdings Inc., which in turn was 100% held by JPMorgan Chase & Co.;
|
|
|
(h)
|
1,706,702 H shares (representing approximately 0.04%
of the Company’s then total issued H shares) were held by J.P. Morgan Whitefriars Inc. in the capacity of beneficial owner,
which in turn was 100% held by J.P. Morgan Overseas Capital Corporation, which in turn was 100% held by J.P. Morgan International
Finance Limited, which in turn was 100% held by Bank One International Holdings Corporation, which in turn was 100% held by J.P.
Morgan International Inc., which in turn was 100% held by JPMorgan Chase Bank, N.A., which in turn was 100% held by JPMorgan Chase
& Co.;
|
|
|
5.
|
Among the 3,479,454,299 H shares held by HKSCC Nominees Limited, JPMorgan Chase & Co. also
had, through controlled corporations, a short position in an aggregate of 3,345,064 H shares (representing approximately 0.08%
of the Company’s then total issued H shares). Such short position of 3,345,064 H shares were held by J.P. Morgan Whitefriars
(UK) in the capacity of beneficial owner, which in turn was 99.99% held by J.P. Morgan Whitefriars Inc., which in turn was 100%
held by J.P. Morgan Overseas Capital Corporation, which in turn was 100% held by J.P. Morgan International Finance Limited, which
in turn was 100% held by Bank One International Holdings Corporation, which in turn was 100% held by J.P. Morgan International
Inc., which in turn was 100% held by JPMorgan Chase Bank, N.A., which in turn was 100% held by JPMorgan Chase & Co..
|
Save as disclosed above, based on the information
available to the Directors and so far as they are aware, as at 30 June 2013, among the 3,479,454,299 H shares held by HKSCC Nominees
Limited, no other person had any interest or short position in the Company’s shares or underlying shares (as the case may
be) which would fall to be disclosed to the Company and the Hong Kong Stock Exchange under the provisions of Divisions 2 and 3
of Part XV of the SFO.
CHINA EASTERN AIRLINES CORPORATION LIMITED
MANAGEMENT DISCUSSION AND ANALYSIS
|
|
4.
|
Shareholdings of Directors, Supervisors, Chief Executives
and Senior Management
|
Names, relevant information of and shares held by the Directors,
the Supervisors and members of senior management of the Company as at 30 June 2013 are as follows:
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
listed A shares
|
|
|
Capacity
|
|
|
|
|
|
|
of the Company
|
|
|
in which the
|
|
|
|
|
|
|
held – personal
|
|
|
A shares
|
|
|
Name
|
|
Position
|
|
interest
|
|
|
were held
|
|
|
Liu Shaoyong
|
|
Chairman
|
|
|
0
|
|
|
|
|
|
|
Ma Xulun
|
|
Vice Chairman
|
|
|
0
|
|
|
|
|
|
|
|
|
President
|
|
|
|
|
|
|
|
|
|
Xu Zhao
|
|
Director
|
|
|
0
|
|
|
|
|
|
|
Gu Jiadan
|
|
Director
|
|
|
0
|
|
|
|
|
|
|
Li Yangmin
|
|
Director
|
|
|
3,960
|
|
|
Beneficial Owner
|
|
|
|
|
Vice President
|
|
|
(Note 1)
|
|
|
|
|
|
|
Tang Bing
|
|
Director
|
|
|
0
|
|
|
|
|
|
|
|
|
Vice President
|
|
|
|
|
|
|
|
|
|
Sandy Ke-Yaw Liu
|
|
Independent non-executive
|
|
|
0
|
|
|
|
|
|
|
|
|
Director
|
|
|
|
|
|
|
|
|
|
Ji Weidong
|
|
Independent non-executive
|
|
|
0
|
|
|
|
|
|
|
|
|
Director
|
|
|
|
|
|
|
|
|
|
Shao Ruiqing
|
|
Independent non-executive
|
|
|
0
|
|
|
|
|
|
|
|
|
Director
|
|
|
|
|
|
|
|
|
|
Li Ruoshan
|
|
Independent non-executive
|
|
|
0
|
|
|
|
|
|
|
|
|
Director
|
|
|
|
|
|
|
|
|
|
Yu Faming
|
|
Chairman of the Supervisory
|
|
|
0
|
|
|
|
|
|
|
|
|
Committee
|
|
|
|
|
|
|
|
|
|
Xi Sheng
|
|
Supervisor
|
|
|
0
|
|
|
|
|
|
|
Ba Shengji
|
|
Supervisor
|
|
|
0
|
|
|
|
|
|
|
Yan Taisheng
|
|
Supervisor
|
|
|
0
|
|
|
|
|
|
|
Feng Jinxiong
|
|
Supervisor
|
|
|
0
|
|
|
|
|
|
|
Shu Mingjiang
|
|
Vice President
|
|
|
0
|
|
|
|
|
|
|
Wu Yongliang
|
|
Vice President
|
|
|
3,696
|
|
|
Beneficial Owner
|
|
|
|
|
Chief Financial Officer
|
|
|
(Note 2)
|
|
|
|
|
|
|
Tian Liuwen
|
|
Vice President
|
|
|
0
|
|
|
|
|
|
|
Wang Jian
|
|
Board Secretary, Joint Company
|
|
|
0
|
|
|
|
|
|
|
|
|
Secretary, Authorised
|
|
|
|
|
|
|
|
|
|
|
|
Representative in Hong Kong
|
|
|
|
|
|
|
|
|
INTERIM REPORT 2013
MANAGEMENT DISCUSSION AND ANALYSIS
|
|
Note 1:
|
representing approximately 0.000031% of the Company’s
total issued shares as at 30 June 2013
|
|
|
Note 2:
|
representing approximately 0.000029% of the Company’s
total issued shares as at 30 June 2013
|
H Shares Appreciation Rights
On 9 November 2012, the Company’s
general meeting approved the “H Shares Appreciation Rights Scheme of China Eastern Airlines Company Limited” with an
aim to provide medium to long term incentive to certain Directors, senior management, key technical and managerial personnel of
the Company and promote the continuous development of the business of the Group.
As at 30 June 2013, the particulars of
H shares appreciation rights granted to the Directors and senior management were as follows:
|
|
|
|
|
|
|
|
|
|
The proportion of
|
|
|
|
|
|
|
|
|
|
|
|
Number of shares
|
|
|
shares appreciation
|
|
|
The proportion of
|
|
|
|
|
|
|
|
|
appreciation
|
|
|
rights granted
|
|
|
shares appreciation
|
|
|
|
|
|
|
|
|
rights granted
|
|
|
to total issued
|
|
|
rights granted
|
|
|
|
|
|
|
|
|
(Ten thousand
|
|
|
share capital of
|
|
|
to total issued
|
|
|
|
|
Name
|
|
Position
|
|
shares)
|
|
|
the Company
|
|
|
H Shares
|
|
|
1
|
|
Liu Shaoyong
|
|
Chairman
|
|
|
100
|
|
|
|
0.0079
|
%
|
|
|
0.0238
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
Ma Xulun
|
|
Vice Chairman, President
|
|
|
100
|
|
|
|
0.0079
|
%
|
|
|
0.0238
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3
|
|
Xu Zhao
|
|
Director
|
|
|
86
|
|
|
|
0.0068
|
%
|
|
|
0.0205
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4
|
|
Gu Jiadan
|
|
Director
|
|
|
86
|
|
|
|
0.0068
|
%
|
|
|
0.0205
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5
|
|
Li Yangmin
|
|
Director, Vice President
|
|
|
86
|
|
|
|
0.0068
|
%
|
|
|
0.0205
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6
|
|
Tang Bing
|
|
Director, Vice President
|
|
|
86
|
|
|
|
0.0068
|
%
|
|
|
0.0205
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7
|
|
Shu Mingjiang
|
|
Vice President
|
|
|
71
|
|
|
|
0.0056
|
%
|
|
|
0.0169
|
%
|
CHINA EASTERN AIRLINES CORPORATION LIMITED
MANAGEMENT DISCUSSION AND ANALYSIS
|
|
|
|
|
|
|
|
|
|
The proportion of
|
|
|
|
|
|
|
|
|
|
|
|
Number of shares
|
|
|
shares appreciation
|
|
|
The proportion of
|
|
|
|
|
|
|
|
|
appreciation
|
|
|
rights granted
|
|
|
shares appreciation
|
|
|
|
|
|
|
|
|
rights granted
|
|
|
to total issued
|
|
|
rights granted
|
|
|
|
|
|
|
|
|
(Ten thousand
|
|
|
share capital of
|
|
|
to total issued
|
|
|
|
|
Name
|
|
Position
|
|
shares)
|
|
|
the Company
|
|
|
H Shares
|
|
|
8
|
|
Wu Yongliang
|
|
Vice President, Chief Financial Officer
|
|
|
71
|
|
|
|
0.0056
|
%
|
|
|
0.0169
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9
|
|
Tian Liuwen
|
|
Vice President
|
|
|
71
|
|
|
|
0.0056
|
%
|
|
|
0.0169
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10
|
|
Wang Jian
|
|
Board secretary, Joint Company Secretary
|
|
|
57
|
|
|
|
0.0045
|
%
|
|
|
0.0136
|
%
|
Save as disclosed above, as at 30 June
2013, none of the Directors, chief executive, Supervisors or members of the Company’s senior management and their respective
associates had any other interest or short position in the shares, underlying shares and/or debentures (as the case may be) of
the Company and/or any of its associated corporations (within the meaning of Part XV of the SFO) which was required to (i) be
notified to the Company and the Hong Kong Stock Exchange pursuant to the provisions of Divisions 7 and 8 of Part XV of the SFO
(including any interest or short position which were taken or deemed to have under such provisions of the SFO) ,or (ii) as recorded
in the register required to be kept by the Company pursuant to section 352 of the SFO, or (iii) which was otherwise required to
be notified to the Company and the Hong Kong Stock Exchange pursuant to the Model Code for Securities Transactions by Directors
of Listed Issuers (the “
Model Code
”) as set out in Appendix 10 to the Listing Rules (which shall be deemed
to apply to the Supervisors to the same extent as it applied to the Directors).
INTERIM REPORT 2013
MANAGEMENT DISCUSSION AND ANALYSIS
|
|
5.
|
Purchase, sale
or redemption of securities
|
During the six months ended
30 June 2013, neither the Company nor its subsidiaries purchased, sold or redeemed any of its issued securities (“
securities
”
having the meaning ascribed thereto under Section 1 of Appendix 16 to the Listing Rules) without taking into account any issue
of new securities.
During the six months ended 30 June 2013,
the Company has adopted a code of conduct on no less exacting terms than the Model Code set out in Appendix 10 of the Listing Rules
regarding the securities transactions of the Directors. Having made specific enquiries to all the Directors, it is the Company’s
understanding that the Directors have complied with the required standards of conduct as set forth in the Model Code and its code
of conduct regarding Directors’ securities transactions.
|
|
6.
|
Corporate Governance
Practices
|
The Board has reviewed the relevant provisions
and corporate governance practices under the codes of corporate governance practices adopted by the Company, and is of the view
that the Company’s corporate governance practices for the six months ended 30 June 2013 met the requirements under the code
provisions in the Corporate Governance Code and Corporate Governance Report set out in the Listing Rules.
To further strengthen the awareness of
compliance among the Directors, supervisors and senior management of the Company, and to enhance their understanding and application
of the relevant rules, in January and June 2013, the Company invited experts from securities regulatory authorities and senior
partners from renowned law firms to conduct seminars on the latest regulatory laws and regulations and relevant case studies in
relation to securities. At the same time, in order to continue strengthening the comprehensive understanding of the Directors,
supervisors and senior management of the Company on their respective duties and responsibilities, the Company has systematically
reviewed the relevant rules and regulations regarding the duties and responsibilities of directors, supervisors and senior management
of a listed company as promulgated by regulatory bodies including the China Securities Regulatory Commission, Shanghai Stock Exchange,
Hong Kong Stock Exchange and New York Stock Exchange in the past year. The Company has compiled the “Guidelines on Duties
of the Directors, Supervisors and Senior Management of China Eastern Airlines Corporation Limited (2013)”, which is based
on the “Guidelines on Duties of the Directors, Supervisors and Senior Management of China Eastern Airlines Corporation Limited”
issued last year.
CHINA EASTERN AIRLINES CORPORATION LIMITED
MANAGEMENT DISCUSSION AND ANALYSIS
|
|
7.
|
Material litigation
and arbitration
|
The family members of the 32 victims in
an aircraft accident who sued the Company in the U.S. and China (the aircraft was then owned and operated by China Eastern Air
Yunnan Company), which occurred in Baotou on 21 November 2004, have reached a settlement with the Company and has applied to the
Beijing Second Intermediate People’s Court and the U.S. District Court to withdraw their actions. On 31 May 2013, the Beijing
Second Intermediate People’s Court accepted the withdrawal, and all the proceedings in China with respect to this case have
been closed. On 9 July 2013, the Company’s trial counsel submitted an application for withdrawal to the U.S. District Court,
which will hold a hearing on this application in the near term. The Company believes that the outcome of this litigation will not
have a material adverse effect on the financial condition and operating performance of the Company.
For the period ended 30 June 2013, the
Group was not involved in any material litigation or arbitration.
|
|
8.
|
Audit and Risk
Management Committee
|
The Audit and Risk Management Committee
has reviewed the accounting principles and methods adopted by the Group with Company’s management, and has discussed with
the Board the relevant internal control and financial reporting issues, including a review of the unaudited interim financial statements
for the six months ended 30 June 2013.
The Audit and Risk Management Committee
does not have any differences in opinion on the accounting principles and methods adopted by the Group.
The 2012 annual general meeting
was held by the Company on 26 June 2013, during which the seventh session of the Board and the seventh session of the supervisory
committee of the Company (“
Supervisory Committee
”) were elected. On the same day, the first ordinary meeting
of the seventh session of the Board and the first meeting of the seventh session of the Supervisory Committee were also convened
by the Company, during which the Chairman, Vice Chairman, President, Vice President, Chief Financial Officer, Board Secretary
of the seventh session of the Board and the Chairman for the seventh session of the Supervisory Committee were elected.
INTERIM REPORT 2013
MANAGEMENT DISCUSSION AND ANALYSIS
|
Cessation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date of
|
|
|
|
|
|
Name
|
|
Cessation
|
|
Approval Organisation
|
|
Position
|
|
|
|
|
|
|
|
|
|
Luo Zhuping
|
|
26 June 2013
|
|
2012 annual general meeting
|
|
Director
|
|
Wu Xiaogen
|
|
26 June 2013
|
|
2012 annual general meeting
|
|
Independent Director
|
|
Liu Jiashun
|
|
26 June 2013
|
|
2012 annual general meeting
|
|
Supervisor
|
|
Appointment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date of
|
|
|
|
|
|
Name
|
|
Appointment
|
|
Approval Organisation
|
|
Position
|
|
|
|
|
|
|
|
|
|
Liu Shaoyong
|
|
26 June 2013
|
|
2012 annual general meeting
|
|
Chairman
|
|
|
|
|
|
1st ordinary meeting of the seventh session of the Board
|
|
|
|
Ma Xulun
|
|
26 June 2013
|
|
2012 annual general meeting
|
|
Vice Chairman,
|
|
|
|
|
|
1st ordinary meeting of the seventh session of the Board
|
|
President
|
|
Xu Zhao
|
|
26 June 2013
|
|
2012 annual general meeting
|
|
Director
|
|
Gu Jiadan
|
|
26 June 2013
|
|
2012 annual general meeting
|
|
Director
|
|
Li Yangmin
|
|
26 June 2013
|
|
2012 annual general meeting
|
|
Director, Vice President
|
|
|
|
|
|
1st ordinary meeting of the seventh session of the Board
|
|
|
|
Tang Bing
|
|
26 June 2013
|
|
2012 annual general meeting
|
|
Director, Vice President
|
|
|
|
|
|
1st ordinary meeting of the seventh session of the Board
|
|
|
|
Sandy Ke-Yaw
|
|
26 June 2013
|
|
2012 annual general meeting
|
|
Independent Director
|
|
Liu
|
|
|
|
|
|
|
|
Ji Weidong
|
|
26 June 2013
|
|
2012 annual general meeting
|
|
Independent Director
|
|
Shao Ruiqing
|
|
26 June 2013
|
|
2012 annual general meeting
|
|
Independent Director
|
|
Li Ruoshan
|
|
26 June 2013
|
|
2012 annual general meeting
|
|
Independent Director
|
CHINA EASTERN AIRLINES CORPORATION LIMITED
MANAGEMENT DISCUSSION AND ANALYSIS
|
|
|
Date of
|
|
|
|
|
|
Name
|
|
Appointment
|
|
Approval Organisation
|
|
Position
|
|
|
|
|
|
|
|
|
|
Yu Faming
|
|
26 June 2013
|
|
2012 annual general meeting
|
|
Chairman of the
|
|
|
|
|
|
1st meeting of the seventh session of the Supervisory Committee
|
|
Supervisory Committee
|
|
Xi Sheng
|
|
26 June 2013
|
|
2012 annual general meeting
|
|
Supervisor
|
|
Ba Shengji
|
|
26 June 2013
|
|
2012 annual general meeting
|
|
Supervisor
|
|
Yan Taisheng
|
|
26 June 2013
|
|
3rd group meeting in 2013 of the fifth session of the employee’s
representatives conference
|
|
Supervisor
|
|
Feng Jinxiong
|
|
26 June 2013
|
|
3rd group meeting in 2013 of the fifth session of the employee’s representatives conference
|
|
Supervisor
|
|
Shu Mingjiang
|
|
26 June 2013
|
|
1st ordinary meeting of the seventh session of the Board
|
|
Vice President
|
|
Wu Yongliang
|
|
26 June 2013
|
|
1st ordinary meeting of the seventh session of the Board
|
|
Vice President, Chief Financial Officer
|
|
Tian Liuwen
|
|
26 June 2013
|
|
1st ordinary meeting of the seventh session of the Board
|
|
Vice President
|
|
Feng Liang
|
|
27 August 2013
|
|
2nd ordinary meeting of the seventh session of the Board
|
|
Vice President
|
|
Wang Jian
|
|
26 June 2013
|
|
1st ordinary meeting of the seventh session of the Board
|
|
Board Secretary, Joint Company
|
|
|
|
|
|
|
|
Secretary, Authorised
|
|
|
|
|
|
|
|
Representative in
|
|
|
|
|
|
|
|
Hong Kong
|
|
Ngai Wai Fung
|
|
26 June 2013
|
|
1st ordinary meeting of the seventh session of the Board
|
|
Joint Company Secretary
|
INTERIM REPORT 2013
MANAGEMENT DISCUSSION AND ANALYSIS
The Company would like to highlight the following information:
|
|
1.
|
On 10 January
2013, 上海航空國際旅
遊（集團 ）有限公司
(Shanghai Airlines Tours, International (Group)
Co., Ltd.) (“
Shanghai Tours
”),
a wholly-owned subsidiary of the Company, entered
into an equity transfer agreement with 東航旅業投資（集團）有限公司
(Eastern Air Tourism Investment Group Co., Ltd)
(“
Eastern Tourism
”), a wholly-owned
subsidiary of CEA Holding, pursuant to which Shanghai
Tours agreed to purchase and Eastern Tourism agreed
to sell the entire issued share capital in 上海東航國際旅行社有限
公司 (Shanghai Eastern Air International
Travel Service Co., Ltd) (“
Eastern Travel
”)
held by Eastern Tourism (the “
Acquisition
”).
Upon completion of the Acquisition, Eastern Travel
will become an indirect wholly-owned subsidiary
of the Company. The Acquisition constitutes a
connected transaction of the Company. For details,
please refer to the announcement of the Company
dated 10 January 2013 issued in Hong Kong.
|
|
|
2.
|
On 16 January
2013, the Company entered into a supplemental
agreement with 東航 集團財務有限責任公司
(Eastern Air Group Finance Company Limited) (“
Eastern
Air Finance Company
”), to further regulate
the balances of the Group’s deposits and
loans with the Eastern Air Finance Company and
its subsidiaries on the pre-condition that the
agreed maximum daily balance of each of deposits
and loans under the financial services agreement
dated 15 October 2010 remain unchanged. For details,
please refer to the announcement of the Company
dated 16 January 2013 issued in Hong Kong.
|
|
|
3.
|
The first tranche of the corporate bonds issued by the
Company are 10-year fixed interest rate bonds in the amount of RMB4.8 billion, with an issue price of RMB100 each and a coupon
interest rate of 5.05%. The issuance was completed on 20 March 2013 and the bonds were listed on the Shanghai Stock Exchange on
22 April 2013. On 28 June 2013, Dagong International Credit Rating Co., Ltd., a credit rating agency, evaluated this tranche of
corporate bonds and issued a credit rating report. For details, please refer to the announcements of the Company issued in Hong
Kong dated 20 March 2013, 18 April 2013 and 28 June 2013.
|
CHINA EASTERN AIRLINES CORPORATION LIMITED
MANAGEMENT DISCUSSION AND ANALYSIS
|
|
4.
|
On 5 June 2013,
Eastern Air Overseas (Hong Kong) Corporation Limited
(“
Eastern Air Overseas
”), a wholly-owned
subsidiary of the Company, Jetstar International
Group Holding Co. Limited (“
Jetstar International
”),
a wholly-owned subsidiary of Qantas, Shun Tak Investor,
a wholly owned Hong Kong-based subsidiary of Shun
Tak Holdings Limited and Jetstar Hong Kong entered
into a restated and amended shareholders’
agreement, pursuant to which Shun Tak Investor will
become a new strategic shareholder of Jetstar Hong
Kong, subject to the completion of necessary filings
with the relevant authorities in the PRC, and will
hold one-third of the total issued share capital
of Jetstar Hong Kong. For details, please refer
to the announcement of the Company dated 5 June
2013 issued in Hong Kong.
|
|
|
5.
|
The non-public issuance
of 698,865,000 new A shares by the Company to CEA
Holding (the controlling shareholder of the Company)
and its wholly-owned subsidiary was completed on
17 April 2013 (the “
Non-public Issuance
of A Shares
”). The non-public issuance
of 698,865,000 new H shares by the Company to a
wholly-owned subsidiary of CEA Holding (the controlling
shareholder of the Company) was completed on 21
June 2013 (the “
Non-public Issuance of
H Shares
”). For details, please refer
to the announcements of the Company dated 17 April
2013 and 21 June 2013 issued in Hong Kong.
|
|
|
6.
|
On 29 May 2013, Eastern Air Overseas, a wholly-owned
subsidiary of the Company, issued RMB2.2 billion guaranteed bonds with an interest rate of 3.875% due 2016 to professional investors
in Hong Kong. Such bonds are listed on the Hong Kong Stock Exchange. The Company has provided a guarantee in connection with this
bond issue. For details, please refer to the announcements of the Company dated 24 May 2013, 30 May 2013 and 5 June 2013 issued
in Hong Kong.
|
|
|
7.
|
On 7 June 2013, the Company has completed the issuance of 2013 first tranche of super-
short-term commercial paper in the issuance amount of RMB4 billion, with a maturity of 270 days. The nominal value of the
commercial papers was RMB100 per unit and the interest rate was 3.95%. For details, please refer to the announcement of the
Company dated 7 June 2013 issued in Hong Kong.
|
INTERIM REPORT 2013
MANAGEMENT DISCUSSION AND ANALYSIS
|
|
8.
|
On 10 June 2013, the Company redeemed the 2012 first
tranche of RMB4 billion 4.1% super-short-term commercial paper, which was issued on 13 September 2012. The commercial papers had
a maturity of 270 days at a nominal value of RMB100 per unit. For details, please refer to the announcements of the Company dated
13 September 2012 and 13 June 2013 issued in Hong Kong.
|
|
|
9.
|
On 26 June 2013, the 2012 annual general meeting of the
Company considered and approved that (1) Ernst & Young Hua Ming LLP and Ernst & Young be appointed as the Company’s
domestic and international auditors respectively, for 2013; and (2) Ernst & Young Hua Ming LLP be appointed as the Company’s
auditors for internal control for 2013, both of which came into effect at the conclusion of the 2012 annual general meeting. For
details, please refer to the announcements of the Company dated 26 March 2013 and 26 June 2013 issued in Hong Kong.
|
|
|
10.
|
On 26 June 2013, the 2012 annual
general meeting of the Company considered and approved the proposal
to expand the business scope of the Company and amendments to the
articles of association of the Company (the “
Articles of
Association
”). On the same date, the Chairman of the Company
made corresponding amendments to the Articles of Association pursuant
to the authority granted at the 2012 first extraordinary general
meeting, which was based on the results of Non-public Issuance of
A Shares and Non- public Issuance of H Shares. All amendments became
effective on 26 June 2013. For details, please refer to the announcements
of the Company dated 26 April 2013 and 26 June 2013 issued in Hong
Kong.
|
CHINA EASTERN AIRLINES CORPORATION LIMITED
MANAGEMENT DISCUSSION AND ANALYSIS
|
|
11.
|
The annual caps for the continuing connected transactions
of the Company, which was approved by the Board and the annual general meeting of the Company, as well as their actual amounts
incurred up to 30 June 2013, are set forth as follows:
|
|
|
|
|
|
|
Unit: RMB’000
|
|
|
|
|
|
|
|
|
|
|
|
|
Actually
|
|
|
The approved
|
|
|
|
|
incurred up to
|
|
|
2013 annual
|
|
|
Category
|
|
30 June 2013
|
|
|
caps
|
|
|
Property leasing
|
|
|
28,752
|
|
|
|
114,900
|
|
|
Financial services (balance of deposit)
|
|
|
522,771
|
|
|
|
4,000,000
|
|
|
Import and export agency services
|
|
|
51,278
|
|
|
|
118,000
|
|
|
Catering services
|
|
|
430,425
|
|
|
|
1,160,000
|
|
|
Sales agency services (agency fees)
|
|
|
4,634
|
|
|
|
115,200
|
|
|
Production and maintenance services
|
|
|
68,824
|
|
|
|
148,780
|
|
|
Advertising agency services
|
|
|
2,881
|
|
|
|
56,000
|
|
|
Media resources operation services
|
|
|
–
|
|
|
|
60,000
|
|
|
|
By order of the Board
|
|
|
China Eastern Airlines Corporation Limited
|
|
|
Liu Shaoyong
|
|
|
Chairman
|
|
Shanghai, PRC
|
|
|
30 August 2013
|
|
|
As at the date of this report, the Directors are:
|
|
Liu Shaoyong
|
(Chairman)
|
|
Ma Xulun
|
(Vice Chairman, President)
|
|
Xu Zhao
|
(Director)
|
|
Gu Jiadan
|
(Director)
|
|
Li Yangmin
|
(Director, Vice President)
|
|
Tang Bing
|
(Director, Vice President)
|
|
Sandy Ke-Yaw Liu
|
(Independent non-executive Director)
|
|
Ji Weidong
|
(Independent non-executive Director)
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Shao Ruiqing
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(Independent non-executive Director)
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Li Ruoshan
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(Independent non-executive Director)
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