Slide 1: Air China Limited 2004 Annual Results Presentation
Air China Limited 2004 Annual Results Presentation April April 2005 2005 HK000JHT
Slide 2: Forward-looking statements disclaimer
This presentation contains projections and forward-looking statements that reflect the company’s current views with respect to future events and financial performance. These views are based on current assumptions which are subject to various risks and which may change over time. No assurance can be
Slide 3: 2004 Results Summary: 2004 Highlights
2004 Results Summary 2004 Highlights Capital Financing Financial Results Business Operation Significant Revenue Successful Listing in Growth with the Best Operational Hong Kong and Highest Profit Among Performance Ever London Peers Achieved milestone development through successful restructuring and
Slide 4: 2004 Annual Results Overview: Summary Financial Performance
2004 Results Summary 2004 Annual Results Overview Summary Financial Performance RMB (million) 2004 2003 Growth Operating revenue 33,521 24,641 +36.0% Operating cost 29,036 22,357 +29.9% Operation income 4,485 2,284 +96.4% Net income 2,386 160 +1394.9% % of revenue 7.1% 0.6% +6.5ppt EBITDA(1) 7,949 5
Slide 5: Summary Operational Performance
2004 Results Summary 2004 Annual Results Overview Summary Operational Performance 2004 2003 Growth ATK (million) 10,684 8,594 +24.3% RTK (million) 6,751 5,200 +29.8% ATK load factor 63.2% 60.5% +2.7ppt Utilization (block 10.2 8.7 +17.2% hours/day) Note: Operating data excludes Air Macau Sources: Com
Slide 6: Development Strategies and Implementation
Business Review Development Strategies and Implementation Strategic Implementation Strengthen Beijing as Strengthened Beijing hub by expanding fleet Principal base Improved flight schedule design, focused on effective connections of flights Implemented strict budget plans and tightened control
Slide 7: Passenger Operation Summary
Business Review Passenger Operation Summary International Domestic Hong Kong and Macau 2004 2003 Growth 2004 2003 Growth 2004 2003 Growth ASK (mm) 27,897 19,709 +41.5% 34,627 28,983 +19.5% 2,371 2,042 +16.1% RPK (mm) 19,628 12,765 +53.8% 25,487 19,525 +30.5% 1,530 1,187 +28.9% Load factor 70.4% 64.8
Slide 8: Cargo Operation Summary
Business Review Cargo Operation Summary 2004 2003 Growth AFTK (mm) 4,843 4,028 +20.2% RFTK (mm) 2,582 2,206 +17.0% Load factor 53.3% 54.8% -1.5ppt Yield (RMB) 1.99 1.87 +6.5% Note: Operating data excludes Air Macau Source: Company’s financials HK000JHT 8
Slide 9: Capital Expenditure
Business Review Capital Expenditure Historical Capital Expenditure RMB (million) （%） 7,000 16% 13.6% 6,000 14% 12% 5,000 8.9% 10% 4,000 8% 3,000 5.7% 6,141 6% 2,000 3,849 4% 1,000 2,462 2% 0 0% 2002 2003 2004 Capex As % of Fixed Assets Source: Company’s financials HK000JHT 9
Slide 10: Revenue
Financial Review Revenue Revenue Structure Total Revenue Breakdown by Region 2004 RMB (million) total: +36.0% Others 35,000 33,521 Cargo 8.0% 2,737 +38.8% 9.5% 30,000 3,847 +68.2% 24,641 25,000 2,477 +6.0% 1,971 2,287 4,232 +19.3% 20,000 2,336 1,745 +10.9% 3,548 Passenger 15,000 82.5% 1,573 2003 10,
Slide 11: Major Expenses
Financial Review Major Expenses Major Cost Components Total Operating Cost 2004 RMB Othe r （mm） Total: +29.9% Expe ns e s 29,036 20% 30,000 Je t fue l 29% +33.2% Ope rating 5,972 Le as e 25,000 22,357 4% 1,259 +15.3% Em ploye e Salary 20,000 4,484 2,921 +22.8% 10% 2,836 Tak e -Off/ 1,092 +31.9% Airc
Slide 12: Effective Cost Control
Financial Review Effective Cost Control Operating Cost As a % of Total Revenue Operating Cost/ASK RMB (million) （%） RMB 35,000 90.7% 100% 0.45 0.42 86.9% 86.6% 0.41 0.40 0.38 30,000 80% 0.35 25,000 0.30 60% 20,000 0.25 15,000 0.20 29,036 40% 0.15 10,000 21,699 22,357 0.10 20% 5,000 0.05 0 0% 0.00 20
Slide 13: Contribution from Associate Companies
Financial Review Contribution from Associate Companies Profit Contribution from Associate Companies RMB (million) 600 Total: +130.8% 561 500 400 300 243 200 100 2003 2004 Shenzhen Airlines Dragonair Others Source: Company’s financials and statistics HK000JHT 13
Slide 14: Improved Capital Structure
2004 Results Summary Improved Capital Structure Net Debt/Equity(2) Financial Leverage (x) RMB 8 7.3 (billion) 8.8 6 4.8 Capitalized 4 Operating Lease(1) 7.6 1.5 16.5 2 6.9 Shareholders’ 0 Equity (2) 2002 2003 2004 Long term 24.9 23.5 EBITDA Interest Coverage debt (x) Short term debt 10.8 10.5 5 4.4
Slide 15: 2005 Market Outlook – Opportunities and Challenges Co-exist
Future Outlook 2005 2005 Market Market Outlook Outlook –– Opportunities Opportunities and and Challenges Challenges Co-exist Co-exist Drivers 9 Robust aviation demand with 13%-15% growth rate More active domestic and international business activities, and 9 rapid growth in leisure travel 9 Additiona
Slide 16: Future Expenditure Under Commitment
Future Outlook Future Expenditure Under Commitment (2004 Year-end ) RMB (million) z Capital commitment 15,820 z Investment commitment 422 z Operating lease commitment 5,356 Source: Company’s financials HK000JHT 16
Slide 17: Tasks For 2005
Future Outlook Tasks For 2005 Enhance Functional Integration Optimize Overall Market Arrangement To be the Best Airline Maximize Network Profitability for Mainstream Passengers To be the Most Valuable and Profitable Airline in Develop Cargo Freight Potential China To be an Airline with International
Slide 18: Investor Relations contact
Http:// www.airchina.com.cn Investor Relation Beijing： Tel：（8610）64582211 64580753 Fax：（8610）64585095 Email：ir@mail.airchina.com.cn