REG - Air China Ld - ANNOUNCEMENT ON PROVISION FOR ASSET IMPAIRMENT

Air ChinaAnnouncement

28/03/2025 15:00

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RNS Number : 7567C  Air China Ld  28 March 2025

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Limited take no responsibility for the contents of this announcement, make no
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the whole or any part of the contents of this announcement.

 

中國國際航空股份有限公司

AIR CHINA LIMITED

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

(Stock Code: 00753)

 

ANNOUNCEMENT REGARDING PROVISION FOR ASSET IMPAIRMENT FOR 2024

 

Air China Limited (the "Company") held the second meeting of the seventh
session of the board of directors (the "Board") on 27 March 2025, at which the
Board considered and approved the "Resolution on Provision for Asset
Impairment for the Year 2024", agreeing to make appropriate provisions for
asset impairment by the Company based on its actual situation.

 

1.       OVERVIEW OF THE PROVISION FOR IMPAIRMENT

 

In accordance with the Accounting Standards for Business Enterprises and the
Company's relevant accounting policies and accounting estimates, and in order
to present an objective and fair view of the Company's financial position and
operating results for 2024, the Company conducted an assessment of expected
credit losses for the relevant assets and performed impairment tests on assets
that may have indications of impairment. Based on the test results, the
Company recognised a provision for impairment of various assets totalling
RMB198 million for 2024, with the specific details as follows:

 

 

 Item                                             Provision made for 2024

 Impairment provision for fixed assets            143,240
 Provision for inventory write-down               13,075
 Impairment provision for other receivables       23,392
 Impairment provision for accounts receivable     12,866
 Impairment provision for other current assets    2,918
 Impairment provision for interbank deposits      2,141
 Impairment provision for other debt investments  394
 Total                                            198,026

 

 

 

 

Unit: RMB'000

2.       SPECIFIC DETAILS OF THE PROVISIONS FOR IMPAIRMENT

 

A.      Provision for Asset Impairment

 

I.       Fixed assets

 

In accordance with Accounting Standards for Business Enterprises No. 8 - Asset
Impairment, the Company conducted impairment tests on certain aircraft
approaching retirement and recognised a provision for fixed asset impairment
of RMB143 million for the shortfall between the recoverable amounts and their
carrying amounts.

 

II.      Inventories

 

In accordance with Accounting Standards for Business Enterprises No. 1 -
Inventories, the Company measured inventories at the lower of cost or net
realisable value and recognised a provision for inventory write-down of RMB13
million for the shortfall between net realisable value and cost.

 

B.      Provision for Credit Impairment

 

In accordance with Accounting Standards for Business Enterprises No. 22 -
Recognition and Measurement of Financial Instruments, the Company has
recognised credit impairment provisions totaling RMB42 million for accounts
receivable, other receivables, other debt investments, other current assets
and interbank deposits, based on expected credit losses.

3.       IMPACT OF THE PROVISION FOR IMPAIRMENT ON THE COMPANY'S FINANCIAL POSITION

 

For 2024, the Company recognised an aggregate provision for impairment of
various assets of RMB198 million in its consolidated financial statements.
After considering the comprehensive impact of reversals and other factors,
these provisions resulted in a RMB146 million increase in losses before
taxation in the Company's consolidated financial statements. The provisions
for impairment comply with the Accounting Standards for Business Enterprises
and the Company's relevant accounting policies and estimates, providing a true
and objective reflection of the Company's financial position and operating
results for 2024 and accurately represent the actual condition of the
Company's assets.

By Order of the Board

Air China Limited

Xiao Feng   Huen Ho Yin

Joint Company Secretaries

 

Beijing, the PRC, 27 March 2025

 

As at the date of this announcement, the directors of the Company are Mr. Ma
Chongxian, Mr. Wang Mingyuan, Mr. Cui Xiaofeng, Mr. Patrick Healy, Mr. Xiao
Peng, Mr. Xu Niansha*, Mr. He Yun*, Ms. Winnie Tam Wan-chi* and Mr. Gao
Chunlei*.

 

*    Independent non-executive director of the Company

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