China Southern Airlines : 2018 annual results

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(a joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 1055)

2018 ANNUAL RESULTS

The board of directors (the "Board") of China Southern Airlines Company Limited (the "Company") hereby announces the audited results of the Company and its subsidiaries (the "Group") for the year ended 31 December 2018 together with the comparative figures for 2017 which have been derived from the Group's audited consolidated financial statements for the year ended 31 December 2018.

FINANCIAL RESULTS

A.PREPARED IN ACCORDANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS ("IFRSs")

CONSOLIDATED INCOME STATEMENT For the year ended 31 December 2018

			2018		2017
		Note	RMB million		RMB million
					(Note)
Operating revenue			138,064
	Traffic revenue				121,873
	Other operating revenue		5,559		5,933
Total operating revenue		4	143,623		127,806
Operating expenses			76,216
	Flight operation expenses	5			62,978
	Maintenance expenses		12,704		11,877
Aircraft and transportation service expenses			24,379		22,935
Promotion and selling expenses			7,036		6,881
General and administrative expenses			3,770		3,391
	Depreciation and amortisation	6	14,308		13,162
Impairment on property, plant and equipment			-		324
	Others		1,829		1,550
Total operating expenses			140,242		123,098
Other net income		7	5,438		4,448
Operating profit			8,819		9,156

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		2018		2017
	Note	RMB million		RMB million
				(Note)
Interest income		125		89
Interest expense	8	(3,202)		(2,747)
Share of associates' results		263		431
Share of joint ventures' results		200		99
Exchange (loss)/gain, net	9	(1,853)		1,801
Changes in fair value of financial instruments		12		(64)
Remeasurement of the originally held equity
interests in a joint venture		-		109
Profit before income tax		4,364		8,874
Income tax	10	(1,000)		(1,976)
Profit for the year		3,364		6,898
Profit attributable to:
Equity shareholders of the Company		2,895		5,961
Non-controlling interests		469		937
Profit for the year		3,364		6,898
Earnings per share
Basic and diluted	12	RMB0.27		RMB0.60

Note: The Group has initially applied IFRS 15 and IFRS 9 at 1 January 2018. Under the transition methods chosen, comparative information is not restated. See Note 3.

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 December 2018

	2018	2017
	RMB million	RMB million
		(Note)
Profit for the year	3,364	6,898

Other comprehensive income:

Items that will not be reclassified to profit or loss

- Equity investments at fair value through other

comprehensive income - net movement in

		fair value reserve (non-recycling)	319	-
		- Share of other comprehensive income of associates	(4)	-
		- Deferred tax relating to above items	(80)	-

Items that may be reclassified subsequently to

profit or loss

- Cash flow hedge: fair value movement of

		derivative financial instruments	29		25
		- Fair value movement of available-for-sale
		financial assets (recycling)	-		123
		- Share of other comprehensive income of associates	-		2
		- Differences resulting from the translation of foreign
		currency financial statements	(2)		-
		- Deferred tax relating to above items	(7)		(37)
Other comprehensive income for the year			255		113
Total comprehensive income for the year			3,619		7,011
Total comprehensive income attributable to:
Equity shareholders of the Company			3,048		6,028
Non-controlling interests			571		983
Total comprehensive income for the year			3,619		7,011

Note: The Group has initially applied IFRS 15 and IFRS 9 at 1 January 2018. Under the transition methods chosen, comparative information is not restated. See Note 3.

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION

At 31 December 2018

		31 December		31 December
		2018		2017
	Note	RMB million		RMB million
				(Note)
Non-current assets		170,692
Property, plant and equipment, net				158,926
Construction in progress	13	37,791		30,233
Lease prepayments		2,970		2,923
Goodwill		237		237
Interest in associates		3,181		3,031
Interest in joint ventures		2,812		1,015
Other investments in equity securities		-		103
Aircraft lease deposits		594		642
Available-for-sale financial assets		-		622
Other equity instrument investments		1,080		-
Other non-current financial assets		103		-
Derivative financial instruments		75		46
Deferred tax assets		1,566		1,662
Other assets		1,776		1,394
		222,877		200,834
Current assets		1,699
Inventories				1,622
Trade receivables	14	2,901		2,675
Other receivables	15	8,015		5,232
Cash and cash equivalents		6,928		6,826
Restricted bank deposits		116		111
Prepaid expenses and other current assets		3,659		1,334
Other financial assets		440		-
Assets held for sale		224		8
Amounts due from related companies		90		76
		24,072		17,884
Current liabilities		44
Derivative financial liabilities				64
Borrowings		38,741		27,568
Current portion of obligations under finance leases		9,555		8,341
Trade payables	16	2,309		2,125
Contract liabilities		1,693		-
Sales in advance of carriage		8,594		7,853
Deferred revenue		-		1,502
Current income tax		369		919
Amounts due to related companies		127		101
Accrued expenses		15,682		15,370
Other liabilities		6,573		5,734
		83,687		69,577

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	31 December		31 December
	2018		2017
	RMB million		RMB million
			(Note)
Net current liabilities	(59,615)		(51,693)
Total assets less current liabilities	163,262		149,141
Non-current liabilities
	15,676
Borrowings			20,719
Obligations under finance leases	62,666		59,583
Deferred revenue	-		1,849
Other non-current liabilities	2,036		-
Provision for major overhauls	2,831		2,808
Provision for early retirement benefits	2		3
Deferred benefits and gains	906		1,053
Deferred tax liabilities	676		583
	84,793		86,598
Net assets	78,469		62,543
Capital and reserves
	12,267
Share capital			10,088
Reserves	52,990		39,848
Total equity attributable to equity
shareholders of the Company	65,257		49,936
Non-controlling interests	13,212		12,607
Total equity	78,469		62,543

Note: The Group has initially applied IFRS 15 and IFRS 9 at 1 January 2018. Under the transition methods chosen, comparative information is not restated. See Note 3.

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