ifrs - ceair.com · rpk m . 4,925 3,842 5,855 4,680 0 1,000 2,000 3,000 4,000 5,000 2,000 3,000...
TRANSCRIPT
2013 Interim Results Announcement
（IFRS）
2013.09
Disclaimer
This presentation contains forward-looking forecast and statements that reflect the
presenting company’s current opinions on future events and its future financial
performance. These opinions were based on certain assumptions, which were determined by
various risk factors and subject to change. This presentation does not give the assurance
that the events predicted will actually occur, the forecast will materialize, or the assumptions
made were correct. The actual results may deviate materially from the forecast.
This presentation is prepared under IFRS. Except for otherwise stated, financial and
operating figures for 2010 and onwards include Shanghai Airlines Company Limited, while
2009 and prior years do not. Financial figures for 2012 and onwards are VAT-based, while
2011 and prior years are based on business tax. “Regional” in this presentation refers to
Hong Kong, Macao and Taiwan.
1
Industry Circumstances
The international crude oil prices stayed at high levels in general, slightly lower than that in the
same period last year
With the continuation of RMB appreciation against USD, exchange gain reached RMB1,174
million
Overall load factor remained stable, with the generally balanced supply and demand in China’s
civil aviation industry
Change in the mix of passengers, with decreasing number of travellers on business trips and
increasing number of private travellers
Impact from the development of high-speed railway gradually normalized
Year-on-year decrease in the number of passengers on Japanese routes, under the continued
influence of geopolitical factors
Passenger load factor was affected in April and May, with the impact of H7N9 on the market of
eastern China
Freight market was still stuck in a trough, albeit slight improvements from last year in general
Slackened control from CAAC, which re-started the procedures for approving establishment of
new airlines
2
Results Highlights
（RMB million） 1H2012 1H2013 YoY Change
Total turnover 41,078 42,276 2.9%
Operating expenses 39,228 42,141 7.4%
Operating profit 1,850 135 -92.7%
Profit ( attributable to shareholders) 866 622 -28.2%
EBITDAR 7,845 6,536 -16.7%
EPS Note
(RMB)
0.08 0.05 -30.2%
Net cash inflow from operating activities 5,847 3,780 -35.4%
ATK（million） 9,537 10,403 9.1%
RTK（million） 6,861 7,448 8.6%
Number of aircraft 395 433 38
Overall load factor 71.94% 71.60% -0.34pt
Daily utilization rate of aircraft (hours) 9.70 9.81 0.11
Note: The weighted number of shares was 11,277 million during 1H2012 and 11,603 million during 1H2013.
3
Breakdown of Traffic Revenue
Note：Traffic revenue only refers to passenger and cargo revenue
33,566 34,665
4,004 3,531
-
8,000
16,000
24,000
32,000
40,000
1H2012 1H2013
Passengerrevenue
Cargorevenue
Breakdown by business sectors RMB m
24,182 24,494
11,607 11,787
1,780 1,916
-
8,000
16,000
24,000
32,000
40,000
1H2012 1H2013
Domestic International Regional
Breakdown by Region RMB m
+1.7%
4
Passenger – Data Highlights
1H2013 YoY
Change
Passenger revenues
(RMB million) 34,665 3.3%
ASK (million) 72,946 11.9%
RPK (million) 57,855 12.2%
Passenger number
(thousand) 37,795 9.2%
Passenger load factor 79.31% 0.24pt
RASK (RMB) 0.48 -7.7%
RRPK (RMB) 0.60 -8.0%
55%
60%
65%
70%
75%
80%
0
17,000
34,000
51,000
68,000
85,000
1H2009 1H2010 1H2011 1H2012 1H2013
ASK RPK Passenger load factor
ASK, RPK and passenger load factor million
0.51
0.60 0.65 0.65
0.60
0.36
0.45 0.51 0.51
0.48
0.0
0.2
0.4
0.6
0.8
1.0
1H2009 1H2010 1H2011 1H2012 1H2013
RRPK RASK
RASK & RRPK RMB
5
Passenger – Domestic Market
Generally maintaining relatively high
passenger load factor
Change in passenger mix
Weakened quality of revenue from high-end
travellers
Normalized impact from high-speed railway
Short-term impact of H7N9 on the market of
eastern China
Normalized impact from high-speed railway
74.9%
81.8% 82.6%
78.3%
78.3%
81.4%
78.5%
79.3% 79.6%
81.7%
77.4%
80.3%
70%
75%
80%
85%
90%
Jan Feb Mar Apr May Jun
1H2013 1H2012
Passenger load factor on
domestic routes
68.0%
28.4%
3.6%
Domestic International Regional
Overall Deployment of capacity
Passenger – International and Regional Markets
Rise in price and volume for European and
US markets
Geopolitical factors continued to impact
Japanese routes
Drop in number of high-end travellers
Strong growth of demand from private
travellers
Europe 13.8%
North America 17.5%
Australia 10.4%
Southeast Asia 31.0%
Japan 10.9%
Korea 5.4%
Hongkong 5.9%
Macau 0.7%
Taiwan 4.3%
Deployment of capacity for
international and regional routes
78.2%
81.3% 81.1% 80.3%
75.6%
79.8%
79.3%
76.5% 77.9%
79.9%
77.5%
80.6%
70%
75%
80%
85%
90%
Jan Feb Mar Apr May Jun
1H2013 1H2012
Passenger load factor on
international routes
6
15,539 15,637
17,320
18,381
10,000
12,000
14,000
16,000
18,000
20,000
2H2011 1H2012 2H2012 1H2013
Passenger traffic volume of international and regional routes
+6.1%
RPK m
4,925
5,855 3,842
4,680
0
1,000
2,000
3,000
4,000
5,000
2,000
3,000
4,000
5,000
6,000
7,000
1H2012 1H2013
Sales revenue from corporate customers (in hundred million)Number of corporate
Continual growth of corporate customers RMB m
Passenger – Control over core markets and distribution
7
13.8%
19.1%
0%
5%
10%
15%
20%
1H2012 1H2013
Revenue from direct sales
2,814
842
408
3,058
1,371
537
0
700
1,400
2,100
2,800
3,500
Pudong Kunming Xi'an
1H2012 1H2013
Transit / Transfer Market share in core markets
CEA 41.8%
CEA
31.4%
CEA
17.4%
CEA
40.7%
Shanghai Kunming Xi’an Beijing
Note: Market share is based on passenger throughput
Passenger – Jetstar Hong Kong
8
ULN
HTA
KTM IXC
DEL
HYD BLR
CMB
MAA
CCU
DAC
CGP
MDL
RGN
KHH
TPE
VVO CTS
SDJ YOK
KIX NGO FUK
OKA
CNX
BKK
PNH SGN
LXG HAN
ICN
MNL CGY CEB DVO BWN
BPN
SUB SRG
DPS BDO
JKT
SIN MES
HKT
KUL
Hong Kong
Milestones In August 2012, both parties signed a
formal shareholders cooperation
agreement
In September 2012, Jetstar Hong
Kong obtained the business
registration certificate
At the end of January 2013, Jetstar
Hong Kong passed the anti-trust
investigation conducted by PRC
Ministry of Commerce
In June 2013, Shun Tak Holdings
became a new shareholder
In August 2013, ATLA of Jetstar Hong
Kong was gazetted by the HKSAR
Government
Approval process is still underway
and we hope to obtain approval by the
end of 2013
Cargo – Data Highlights
9
1H2013 YoY
change
Freight traffic revenue
(RMB million) 3,531 -11.8%
AFTK (million) 3,838 4.6%
RFTK (million) 2,298 1.4%
Freight carried
(million kg) 662 -3.0%
Freight load factor 59.87% -1.90pt
RAFTK (RMB) 0.92 -15.7%
RRFTK (RMB) 1.54 -13.0%
20%
30%
40%
50%
60%
70%
0
1000
2000
3000
4000
5000
1H2009 1H2010 1H2011 1H2012 1H2013
AFTK RFTK Load factor
Freight capacity, freight volume and
freight load factor million
1.41
1.98 1.86
1.77
1.54
0.64
1.20 1.12 1.09 0.92
0
0.5
1
1.5
2
2.5
1H2009 1H2010 1H2011 1H2012 1H2013
RRFTK RAFTK
RAFTK & RRFTK RMB
Cargo – Proactively Transforming
10
Logistics Integrator Segment
Express business Segment
Traditional freight business
•Breakthroughs in customer discovery
•Re-planning market distribution
•Expediting network expanding Transforming
business Traditional
business
•Self-developed E-commerce model
•Launched E-commerce platform
•Promotion of the brand of CEA Express •Optimizing route network
•Enhancing customer experience
•Enriching product mix
•Strengthening out-port control
•Providing value-added services
Cost Structure Analysis
11
Items (RMB million) 1H2013 YoY
change
Aircraft fuel 14,979 2.1%
Wages, salaries and benefits 4,649 6.0%
Take-off and landing charges 4,580 6.3%
Depreciation and amortization 3,964 9.1%
Aircraft maintenance 2,301 5.9%
Aircraft operating lease fees 2,149 3.9%
Sales and marketing expenses 1,873 8.9%
Food and beverages 1,089 14.2%
Indirect operating expenses 3,401 19.2%
Others 3,158 28.2%
Total operating expenses 42,141 7.4%
Aircraft fuel 35.5%
Wages, salaries and benefits
11.0%
Take-off and landing charges
10.9%
Depreciation and
Amortization 9.4%
Indirect operating
expenses 8.1%
Aircraft maintenance
5.5%
Aircrafts operating lease
rentals 5.1%
Selling and marketing
expenses 4.4%
Food and beverages 2.6%
Others 7.5%
Breakdown of operating expenses
Factors Affecting Profit for the Period
12
RMB m
1,850
1,198
- 308
- 265
- 271
- 331
- 547 - 127 - 82
- 152 -135
- 695
135
0
800
1,600
2,400
3,200
1H2012 Revenue Aircraft fuel Wagessalaries
and benefits
Take-offand
landingcharges
Depreciationand
Amortization
Indirectoperatingexpenses
Aircraftmaintenance
Aircraftsoperating
lease rentals
Selling andmarketingexpenses
Food andbeverages
Others 1H2013
Summary of Balance Sheet and Cash Flow Statement
13
Summary of balance sheet (RMB million) 30 June 2013 Change compared to 31
December 2012
Current Assets 15,890 25.4%
Non-current Assets 117,869 6.0%
Total Assets 133,759 8.0%
Current Liabilities 49,452 1.7%
Non-current Liabilities 58,292 8.9%
Total Liabilities 107,744 5.5%
Including: Interest-bearing liabilities 72,418 7.1%
Net Assets 26,015 19.7%
Net Assets attributable to shareholders 24,593 21.5%
Debt Ratio 80.55% -1.91pt
Summary of Cash Flow Statement (RMB million) 1H2013 YoY change
Net cash inflow from operating activities 3,780 -35.4%
Net cash outflow from investing activities -10,775 179.0%
Net cash inflow/(outflow) from financing activities 8,163 N/A
Fleet
14
Self-owned and
under finance lease
Under
operating lease Total
Total number of passenger aircraft 280 137 417
A330 Series（A330-200/300） 21 10 31
A320 Series（A319/A320/A321） 143 45 188
B737 Series（B737-300/700/800） 75 76 151
Other wide-body aircraft（A346/A300/B767） 18 1 19
Other narrow-body aircraft（B757/EMB145/CRJ200） 23 5 28
Total number of freighters 4 12 16
MD-11F 0 1 1
A300 2 0 2
B747 2 3 5
B757F 0 2 2
B777F 0 6 6
Total 284 149 433
June 30, 2013
Fleet Plan and Capex Plan
15
Note: subject to adjustment based on market conditions in future
2H2013 2014 2015
New delivery Disposal New delivery Disposal New delivery Disposal
Narrow-body aircraft 33 9 58 28 61 25
Wide-body aircraft 5 12 2 12 4
Freighters 3 1 1
Total 38 12 70 31 73 30
Items 1H2013 2H2013E
Expenditure on aircraft 7,927 13,958
Other capital expenditures 2,051 2,333
Total 9,978 16,291
(RMB million)
16
Outlook
Private travel boosted by improving purchasing power
Possible slow growth in passengers on business trips
Normalized impact of high-speed railway
Lack of signs of recovery of Japanese routes
Uplifted market influence of China United Airlines in Beijing
Business travels driven by the launch of Shanghai free-trade area
Increase in traffic volume upon Disneyland’s opening in Shanghai
Further optimization of fleet structure and route structure
Potential improvements in operational efficiency
Limited space for Renminbi appreciation
Weakness of the freight market will continue
