SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of October, 2004
CHINA SOUTHERN AIRLINES COMPANY LIMITED
(Translation of registrant's name into English)
Baiyun International Airport
Guangzhou, People's Republic of China
(Address of principal executive offices)
(Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.)
Form 20-F. X Form 40-F.
------- -------
(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. No. X
------- -------
(If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-_____________.)
China Southern Airlines Company Limited (the "Company") on October 27, 2004
published in local newspapers in Hong Kong an announcement in Chinese and
English, respectively, concerning the Company's third quarterly report of 2004.
A copy of the English announcement is included in this Form 6-K of the Company.
The Stock Exchange of Hong Kong Limited takes no responsibility for the content
of this announcement, makes no representation as to its accuracy or completeness
and expressly disclaims any liability whatsoever for any loss howsoever arising
from or in reliance upon the whole or any part of the content of this
announcement.
(CHINA SOUTHERN AIRLINES COMPANY LIMITED LOGO)
CHINA SOUTHERN AIRLINES COMPANY LIMITED
(a joint stock limited company incorporated in the People's Republic of
China with limited liability)
(STOCK CODE: 1055)
THIRD QUARTERLY REPORT OF 2004
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SUMMARY
The unaudited financial statements of the Company for the Third Quarterly Report
were prepared in accordance with the PRC GAAP.
This announcement is made by the Company pursuant to Rule 13.09 of the Listing
Rules.
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1. IMPORTANT NOTICE
This announcement is made by China Southern Airlines Company Limited (the
"Company") pursuant to Rule 13.09 of the Rules Governing the Listing of
Securities on The Stock Exchange of Hong Kong Limited (the "Listing
Rules").
The Directors of the Company collectively and individually warrant that the
information set out in this report does not contain any misrepresentation,
misleading statement or material omission; and jointly and severally accept
full responsibility as to the truthfulness, accuracy and completeness of
the content herein.
The third quarterly report of the Company for the year 2004 (the "Third
Quarterly Report") was prepared in accordance with the relevant rules and
regulations of the China Securities Regulatory Commission.
The unaudited financial statements of the Company for the Third Quarterly
Report were prepared in accordance with the accounting rules and
regulations of the People's Republic of China ("PRC GAAP").
Mr. Yan Zhi Qing (Chairman), Mr. Xu Jie Bo (Chief of Accounting Work, Chief
Financial Officer and Vice President) and Mr. Xiao Li Xin (Chief of
Accounting Department and General Manager of the Financial Department) of
the Company, warrant that the Third Quarterly Report is true and complete.
2. BASIC PARTICULARS OF THE COMPANY
2.1 BASIC INFORMATION OF THE COMPANY
Stock abbreviation: China Southern
Stock code: 600029 (A share), 1055 (H share),
ZNH (ADs)
Company Secretary: Su Liang
Securities Representative: Lei Bin
Correspondence Address: No. 278 Ji Chang Road, Guangzhou,
Guangdong Province,
People's Republic of China
Telephone: 020-86124737
Facsimile: 020-86659040
e-mail address: ir.cz@cs-air.com
2.2 FINANCIAL INFORMATION
2.2.1 Major Accounting Data and Financial Indices
AS AT AS AT
30 SEPTEMBER 31 DECEMBER
2004 2003 CHANGE
(%)
Total assets (RMB'000) 45,676,650 39,372,204 16.01
Shareholders' equity
(excluding minority
interests) (RMB'000) 12,091,051 11,549,849 4.69
Net assets per share (RMB) 2.76 2.64 4.69
Adjusted net assets
per share (RMB) 2.70 2.59 4.24
FOR THE FOR THE
PERIOD FROM PERIOD FROM
1 JULY 2004 TO 1 JANUARY TO
30 SEPTEMBER 30 SEPTEMBER
2004 2004 CHANGE
(%)
Net cash outflow from
operating activities (RMB'000) 2,052,028 3,565,661 37.04
Earnings per share (RMB) 0.048 0.124 -47.13
Return on net assets 1.76% 4.58% -50.40
Return on net assets after
extraordinary gains and losses 1.70% 4.35% -52.73
AMOUNT
EXTRAORDINARY (GAINS)/LOSSES (RMB'000)
Net gain on disposal of fixed assets 1,941
Net gain from expired air tickets 59,561
Others -29,290
Effect of the above on taxation -4,832
---------
Total 27,380
=========
1
2.2.2 Profit and Loss Account
JULY - SEPTEMBER, 2004 JULY - SEPTEMBER, 2003
CONSOLIDATED THE COMPANY CONSOLIDATED THE COMPANY
RMB'000 RMB'000 RMB'000 RMB'000
REVENUE FROM PRINCIPAL
OPERATIONS 6,732,982 4,646,062 4,992,022 3,367,037
Less: Transfer to CAAC
Infrastructure
Development Fund - - - -
------------ ----------- ------------ -----------
NET REVENUE FROM PRINCIPAL
OPERATIONS 6,732,982 4,646,062 4,992,022 3,367,037
Less: Operating costs of
principal
operations 5,246,495 3,789,137 3,427,771 2,305,797
Business taxes and
surcharges 189,135 124,661 14,216 12,578
------------ ----------- ------------ -----------
PROFIT FROM PRINCIPAL
OPERATIONS 1,297,352 732,264 1,550,035 1,048,662
Add: Profit from other
operations 11,171 37,362 132,566 98,060
Less: Selling expenses 565,822 417,153 436,369 332,261
General and
administration
expenses 311,816 191,305 210,222 171,359
Finance expenses 100,443 78,901 360,072 338,400
------------ ----------- ------------ -----------
OPERATING PROFIT 330,442 82,267 675,938 304,702
Add: Investment income 14,146 122,786 52,145 291,381
Non-operating
income 21,653 19,058 2,141 1,949
Less: Non-operating
expenses 12,779 4,836 8,442 5,668
------------ ----------- ------------ -----------
PROFIT BEFORE INCOME TAX 353,462 219,275 721,782 592,364
Less: Income tax 71,994 11,152 222,731 210,548
Minority interests 73,345 - 117,235 -
------------ ----------- ------------ -----------
NET PROFIT 208,123 208,123 381,816 381,816
============ =========== ============ ===========
JANUARY - SEPTEMBER, 2004 JANUARY - SEPTEMBER, 2003
CONSOLIDATED THE COMPANY CONSOLIDATED THE COMPANY
RMB'000 RMB'000 RMB'000 RMB'000
REVENUE FROM PRINCIPAL
OPERATIONS 17,899,974 12,361,470 11,965,102 8,213,798
Less: Transfer to CAAC
Infrastructure
Development Fund - - 250,788 167,942
------------ ----------- ------------ -----------
NET REVENUE FROM PRINCIPAL
OPERATIONS 17,899,974 12,361,470 11,714,314 8,045,856
Less: Operating costs of
principal
operations 14,022,143 10,017,460 10,208,129 7,267,705
Business taxes and
surcharges 507,387 332,318 203,518 140,178
------------ ----------- ------------ -----------
PROFIT FROM PRINCIPAL
OPERATIONS 3,370,444 2,011,692 1,302,667 637,973
Add: Profit from other
operations 105,674 102,720 220,509 205,285
Less: Selling expenses 1,435,489 1,048,350 1,081,544 802,825
General and
administration
expenses 789,643 465,197 710,386 475,730
Finance expenses 431,880 356,400 814,153 746,003
------------ ----------- ------------ -----------
OPERATING PROFIT 819,106 244,465 -1,082,907 -1,181,300
Add: Investment income 42,965 294,453 40,343 65,232
Non-operating
income 70,002 62,666 6,818 4,559
Less: Non-operating
expenses 37,790 12,288 38,675 7,459
------------ ----------- ------------ -----------
PROFIT BEFORE INCOME TAX 894,283 589,296 -1,074,421 -1,118,968
Less: Income tax 160,020 48,094 -321,758 -336,027
Minority interests 193,061 - 30,278 -
------------ ----------- ------------ -----------
NET PROFIT 541,202 541,202 -782,941 -782,941
============ =========== ============ ===========
2.3 As at the end of the reporting period, the Company had a total number
of 143,081 shareholders.
NUMBER OF
SHARES HELD AS AT
30 SEPTEMBER TYPE OF
NAME OF SHAREHOLDERS 2004 SHAREHOLDER
HKSCC Nominees Limited 1,151,421,998 H shares
China Merchants Bank Shareholders Co., Ltd.
- CITIC Classic Allocation Fund 30,530,879 A shares
Yin Feng Securities Investment Fund 23,143,201 A shares
The Bank of Communication - Efund 50 Index Fund 21,824,754 A shares
China Construction Bank - Fortune SGAM
Multi-Strategy Growth Investment Fund 18,250,687 A shares
Boshi Value Growth Securities Investment Fund 18,000,000 A shares
Industry and Commerce Bank of China - Galaxy Yintai
Financial Management Dividends Distribution Fund 14,890,171 A shares
China Bank - China AMC Return Fund 14,213,100 A shares
Xin Hua Securities Investment Fund 13,880,000 A shares
The Bank of Communication - Rongtong Industries
Prosperity Securities Investment Fund 13,354,750 A shares
2
3. MANAGEMENT DISCUSSION AND ANALYSIS
3.1 BRIEF ANALYSIS OF THE COMPANY'S OVERALL OPERATIONAL ACTIVITIES DURING
THE REPORTING PERIOD
During the reporting period, the domestic aviation market benefited
from the continuing steady development in China's economy and the
increase in domestic consumption level, which resulted in a strong
demand for air transportation. For the third quarter of 2004, our
aviation transportation business maintained a good trend of growth.
All production indices were higher as compared to the same period of
last year. However, the sustained high fuel price, which might climb
even higher, contributed to the high jet fuel costs borne by the
Company. The Company's total traffic volume was 1,270.78 million
tonne-kilometers, representing a growth of 26.06% over the same period
of last year; passengers carried were 77,202,900, representing an
increase of 24.88% from the same period last year; cargo and mail
traffic amounted to 141,100 tonne, representing an increase of 16.61%
from the same period last year. Meanwhile, the revenues and profits
from our principal operations were RMB6,732,982,000 which is an
increase of 34.87% from the same period last year, and
RMB1,297,352,000 which is a decrease of 16.3% from the same period
last year respectively. The decrease in profits from principal
operations was mainly due to the combined effect of a 60% increase of
jet fuel costs as compared to the same period last year, the reduction
of sales tax and the waiver of the levies of CAAC Infrastructure
Development Fund in the same period of last year. As a result, the net
profit for the third quarter of this year dropped by RMB381,816,000,
or 45.49%, from the same period of last year to RMB208,123,000.
For the period of January to September 2004, the Company's total
traffic volume was 3,456.29 million tonne-kilometers, representing a
growth of 39.6% over the same period of last year; passengers carried
were 210,346,200, an increase of 51.1% from the same period of last
year; cargo and mail traffic was 4,079,200 tonne, representing an
increase of 25% over the same period of last year; passenger load
factor was 69.3%, an increase of 9.9% over the same period of last
year. For the period of January to September 2004, the accumulated
revenues from our principal operations were RMB17,899,974,000,
representing a rise of 49.6% over the same period of last year;
accumulated profits from our principal operations were
RMB3,370,444,000, an increase of 158.73% over the same period of last
year. The net profit for the period of January to September of this
year was RMB541,202,000, as compared to a net loss of RMB782,941,000
for the same period of last year.
3.1.1 Principal operations or products representing more than 10% of
the income or profit from the Company's principal operations
GROSS PROFIT
PRINCIPLE OPERATION INCOME COSTS MARGIN
(BY BUSINESS OR PRODUCT) (RMB'000) (RMB'000) (%)
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Income from passenger transportation 16,049,352
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Income from cargo and mail transportation 1,673,331 14,022,143 21.66
--------------------------------------------------------------
Others 177,291
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3.1.2 Analysis of significant events and their impact and solutions
As disclosed in an announcement of the Company dated 26 July,
2004, in order to enhance the efficiency of the Company's
capital utilization and hence its investment return and profit,
the Company entered into an asset management agreement with
Zhong Zheng Wei Ye Investment Co., Ltd (CHINESE CHARACTERS)
("Zhong Zheng") and Centergate Securities Co., Ltd (CHINESE
CHARACTERS) ("Centergate") on 22 July, 2004. Pursuant to the
asset management agreement, each of the Company and Zhong Zheng
jointly appointed Centergate to manage and invest an aggregate
investment sum contributed as to RMB500 million by the Company
and as to RMB75 million by Zhong Zheng respectively. The
appointment is effective from 27 July, 2004 to 26 July, 2005.
If the annual rate of return from investment is 6% or below,
Centergate will not charge any assets management fee. If the
annual rate of return from investment exceeds 6%, Centergate
will charge an assets management fee equivalent to a sum which
is less than 60% of the excess of 6% annual return from
investment of the Company's capital. The Board has approved the
asset management agreement by way of a written approval in
accordance with the articles of association of the Company and
the laws of PRC.
3.1.3 Alert on expected significant change in net profit
The outbreak of SARS from April to June of 2003 in China caused
an unprecedented adverse impact to the business of the Company,
as a result the Company recorded an accumulated net loss for
January to September of 2003.
In 2004, the continued improvement in domestic economy and
consumer consumption level in China stimulated the growth of
the domestic civil aviation industry, therefore the total
traffic volume of the Company rose as compared to the same
period of last year. It is expected that the accumulated net
profit of the Company for January to December 2004 will
increase substantially by over 50 per cent as compared with the
same period of 2003.
By order of the Board
CHINA SOUTHERN AIRLINE COMPANY LIMITED
YAN ZHI QING
Director
Guangzhou, the People's Republic of China
October 26, 2004
As at the date of this announcement, the Directors of the Company are Yan Zhi
Qing, Liu Ming Qi, Wang Chang Shun, Peng An Fa, Wang Quan Hua, Zhao Liu An, Zhou
Yong Qian, Zhou Yong Jin, Xu Jie Bo and Wu Rong Nan as executive Directors and
Simon To, Peter Lok, Wei Ming Hai, Wang Zhi and Sui Guang Jun as independent
non-executive Directors.
3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CHINA SOUTHERN AIRLINES COMPANY LIMITED
By /s/ Su Liang
-------------------------------------
Name: Su Liang
Title: Company Secretary
Date: October 28, 2004