| China Southern Airlines Announces 2004 Annual Results
(Hong Kong – April 25, 2005, China Southern Airlines Company Limited (“China Southern Airlines” or the “Company”) together with its subsidiaries (collectively, the “Group”) announced the audited consolidated results of the Group for the year ended 31 December 2004 (the “Year”), prepared in accordance with the PRC Accounting Rules and Regulations (“PRC GAAP”) and International Financial Reporting Standards (“IFRS”).In accordance with PRC GAAP, the Group’s revenue from principal operations was approximately RMB24,194 million (2003: RMB17,351 million); net profit was approximately RMB103 million (2003: RMB15 million).In accordance with IFRS, the Group’s total operating revenue was approximately RMB23,974 million (2003: RMB17,470 million); loss attributable to shareholders was approximately RMB48 million (2003 loss: RMB358 million).Basic loss per share was RMB0.01 (2003 loss per share: RMB0.09).The Board of Directors of the Company did not recommend any final dividend foryear 2004. Mr. Liu Shao Yong, the Company’s Chairman, said, “In 2004, the demand in the PRC civil aviation market sustained the growth trend from the second half of 2003. As a result, the Group recorded a year-on-year growth of more than 37% in total operating revenue, marking a breakthrough achievement in the Group’s history. However, as instabilities in the world economy and in global politics continued to drive up the prices of aviation fuel in the international market, fuel costs rose substantially and now accounted for more than 30% of the operating costs of the Group.Given the substantial rise in fuel costs, the Group adopted various technical measures, including the preparation of precise flight plans and minimisation of turnaround time, so as to reduce fuel consumption without compromising flight safety.” During the Year, passenger revenue, which accounted for 90.4% of the Group’s total traffic revenue, amounted to RMB21,100 million, a rise of 40.6% over 2003.Passenger revenues on domestic routes, Hong Kong regional routes and international routes were RMB16,869 million, RMB1,104 million and RMB3,127 million respectively, representing increases of 37.8%, 47.2% and 55.0% respectively.Passenger load factor increased by 4.6 percentage points to 69.2% in 2004.Passenger yield (in passenger revenue per RPK) remained steady at RMB0.57 for both years. Average yield (in traffic revenue per RTK) increased by 5.3% from RMB4.76 in 2003 to RMB5.01 in 2004. In 2004, the Company successfully acquired the core aviation business assets of China Northern Airlines Company and Xinjiang Airlines Company, providing a robust platform for the Group to consolidate its market leadership and financial results. It also brought in various benefits for the Group, including expansions in flight service network, fleet size and transport capacity, as well as lowered costs and improved overall efficiency.Given the investment incentive policies such as “Go West” and “Revitalising the Old Industrial Bases in the North-eastern Region promulgated by the PRC government, the economy in the western and north-eastern regions of the PRC is expected to grow at a rapid pace in the coming decade or so.This is expected to provide substantial growth potential for the Group. Looking ahead, Mr. Liu Shao Yong said, “2005 is expected to be a year of challenge for the Group. While managing the integrated post-acquisition operations of the Group, the Group will also face increasing competition due to increasing supply in capacity in the PRC aviation market. In anticipation of this, the Group will continue to adopt various measures including optimising its service offerings, flight schedule and route networks by improving the integrated management and resources allocation; enhancing pilot training and flight supervision to ensure flight safety; reinforcing the sales by building an integrate route network and improve the revenue sharing scheme; providing e-commerce services; strengthening the cargo operation in the international and regional markets; exercising stringent cost controls by decentralising budget management and integrating purchasing and maintenance operations; and trying all possible means to minimise the impact of fuel costs, with a view to maintaining and increasing the Group’s market share and business revenues.” The Group is one of the largest airlines in the PRC in terms of volume of passenger traffic, number of scheduled flights per week, number of hours flown, number of routes and size of aircraft fleet. The Group operates the most extensive route network among all PRC airlines. As at 31 December 2004, the Group operated a total of 542 routes, of which 434 were domestic, 85 were international and 23 were Hong Kong regional.For the year ended 31 December 2004, the Group operated an average of 5,280 landings and take-offs per week, serving 143 destinations.As at 31 December 2004, the Group operated a fleet of 231 aircraft and the average age of the Group’s fleet was 7.47 years.
For Immediate Release: Contact: Mr. Jeff Ruffolo |