ZNH China Southern Airlines Co Ltd

CHINA SOUTHERN AIRLINES COMPANY LIMITED

By:

/s/ Chen Wei Hua and Liu Wei

Name:

Chen Wei Hua and Liu Wei

Title:

Joint Company Secretaries

Summary

The quarterly financial report for the third quarter of 2023 (i.e. the three months ended 30 September 2023, the “reporting period”) of China Southern Airlines Company Limited (the “Company”, together with its subsidiaries, the “Group”) was prepared in accordance with the PRC Accounting Standards and was unaudited.

This announcement is published pursuant to Rule 13.09 and Rule 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

MAJOR ACCOUNTING DATA

Principal accounting data and financial indicators

Items

Operating revenue

Net profit attributable to shareholders of the Company

Net profit attributable to shareholders of the Company after deducting non-recurring gains and losses

Net cash flows generated from operating activities

Basic earnings per share (RMB/share)

Diluted earnings per share (RMB/share)

Weighted average return on net assets (%)

Total assets

Equity attributable to shareholders of the Company

The “reporting period” and the same expressions hereafter mentioned refer to the three-months period from the beginning to the end of the third quarter of 2023.

Non-recurring gains and losses

Items

Amount for the period

from the beginning

of the year to the end

of the reporting period

Gains or losses on disposal of non-current assets

Government grants recorded in the income statement for the current period, but exclusive of government grants which are closely related to the normal business of the Company and entitled pursuant to unified standard quota or amount under the government policy

In addition to the valid hedging business related to the company’s normal business operations, the gains/losses from changes in fair value arising from the holding of trading financial assets, derivative financial assets, trading financial liabilities, derivative financial liabilities, and investment income from the disposal of trading financial assets, derivative financial assets, trading financial liabilities, derivative financial liabilities, and other investments in debt

Other non-operating income and expenses other than the above item

Less: Effect on income tax

Effect on non-controlling interests (after tax)

Total

Changes to major accounting data and financial indicators and reasons

Applicable   ☐ Not applicable

Items

Main reason(s)

Operating revenue-the reporting period

Operating revenue-nine months ended 30 September 2023

Net profit attributable to shareholders of the Company-the reporting period

Net profit attributable to shareholders of the Company-nine months ended 30 September 2023

Net profit attributable to shareholders of the Company after deducting non-recurring gains and losses-the reporting period

Net profit attributable to shareholders of the Company after deducting non-recurring gains and losses-nine months ended 30 September 2023

Items

Main reason(s)

Net cash flows generated from operating activities-nine months ended 30 September 2023

Basic earnings per share-the reporting period

Basic earnings per share-nine months ended 30 September 2023

Diluted earnings per share-the reporting period

Diluted earnings per share-nine months ended 30 September 2023

Weighted average return on net assets-the reporting period

percentage

points

Weighted average return on net assets-nine months ended 30 September 2023

percentage

points

INFORMATION OF SHAREHOLDERS

Total number of ordinary shareholders and number of preference shareholders with restored voting rights and shareholdings of the top ten shareholders

Name of shareholder

China Southern Air Holding Company Limited

Nan Lung Holding Limited

HKSCC Nominees Limited

Hong Kong Securities Clearing Company Limited

China Securities Finance Corporation Limited

American Airlines, Inc.

China National Aviation Fuel Group Limited

Spring Airlines Co., Ltd.

China Structural Reform Fund Corporation Limited

Industrial Bank Co., Ltd. – Guangfa Ruiyi Leading Hybrid Securities Investment Fund

Name of shareholder

China Southern Air Holding Company Limited

Nan Lung Holding Limited

HKSCC Nominees Limited

Hong Kong Securities Clearing Company Limited

China Securities Finance Corporation Limited

American Airlines, Inc.

China National Aviation Fuel Group Limited

Spring Airlines Co., Ltd.

China Structural Reform Fund Corporation Limited

Industrial Bank Co., Ltd. – Guangfa Ruiyi Leading Hybrid Securities Investment Fund

Explanation of the related party relationship or concert party relationship of the above shareholders

Explanation on the top ten shareholders and the top ten shareholders not subject to trading restrictions who have participated in the business of margin financing and securities lending and margin refinancing (if any)

IMPORTANT INFORMATION

No.

Established SPVs

Actually Provided

(Yes/no)

1

China Southern Airlines No. 1

Yes

2

China Southern Airlines No. 2

Yes

3

China Southern Airlines No. 3

Yes

4

China Southern Airlines No. 5

Yes

5

China Southern Airlines No. 6

Yes

6

China Southern Airlines No. 7

Yes

7

China Southern Airlines No. 8

Yes

8

China Southern Airlines No. 9

Yes

9

China Southern Airlines No. 10

Yes

10

China Southern Airlines No. 11

Yes

11

China Southern Airlines No. 12

Yes

12

China Southern Airlines No. 13

Yes

13

China Southern Airlines No. 14

Yes

14

China Southern Airlines No. 15

Yes

15

China Southern Airlines No. 16

Yes

16

China Southern Airlines No. 17

Yes

17

China Southern Airlines No. 18

Yes

18

China Southern Airlines No. 19

Yes

19

China Southern Airlines No. 20

Yes

20

China Southern Airlines No. 21

Yes

21

China Southern Airlines No. 22

Yes

No.

Established SPVs

Actually Provided

(Yes/no)

22

China Southern Airlines No. 23

Yes

23

China Southern Airlines No. 24

Yes

24

China Southern Airlines No. 25

Yes

25

China Southern Airlines No. 26

Yes

26

Chongqing Airlines No.1

Yes

27

Chongqing Airlines No.2

Yes

28

Xiamen Airlines No.1

Yes

29

Xiamen Airlines No.2

Yes

30

Xiamen Airlines No.3

Yes

31

Xiamen Airlines No.4

Yes

32

Xiamen Airlines No.5

Yes

33

Xiamen Airlines No.6

Yes

34

Xiamen Airlines No.7

Yes

35

Xiamen Airlines No.8

Yes

36

Xiamen Airlines No.9

Yes

37

Xiamen Airlines No.10

Yes

38

Xiamen Airlines No.11

Yes

39

Xiamen Airlines No.12

Yes

40

Xiamen Airlines No.13

Yes

41

Xiamen Airlines No.14

Yes

42

Xiamen Airlines No.15

Yes

43

Xiamen Airlines No.16

Yes

44

Xiamen Airlines No.17

Yes

45

Xiamen Airlines No.18

Yes

Total

Pursuant to the authorization of the 2022 annual general meeting of the Company, Xiamen Airlines adjusted the guarantee limits of Xiamen Airlines No.1 and Xiamen Airlines No. 18 to US$66 million and US$67 million, respectively, within the authorized guarantee limit of RMB3,560 million or equivalent foreign currency.

The total guarantee amounts actually provided for the aforementioned 45 SPVs by the Company and its subsidiaries, i.e. Xiamen Airlines and Chongqing Airlines, are US$5.500 billion (equivalent to approximately RMB39.489 billion, calculated based on the Renminbi central parity rate of US$1=RMB7.1798 published by the People’s Bank of China on 28 September 2023), which are within the scope of the authorized guarantee amount approved by the general meeting of the Company.

QUARTERLY FINANCIAL STATEMENTS

Type of audit opinion

Financial statements

Items

Current assets:

Cash at bank and on hand

Settlement provisions

Loans to banks and other financial institutions

Held-for-trading financial assets

Derivative financial assets

Bills receivable

Accounts receivable

Items

Receivables financing

Prepayments

Premiums receivable

Reinsurance accounts receivable

Reinsurance contract reserves receivable

Other receivables

Including: Interest receivable

Dividends receivable

Financial assets purchased with agreement to resale

Inventories

Contract assets

Assets held for sale

Non-current assets due within one year

Other current assets

Total current assets

Non-current assets:

Loans and advances

Debt investments

Other debt investments

Long-term receivables

Long-term equity investments

Other equity instrument investments

Other non-current financial assets

Investment properties

Fixed assets

Construction in progress

Items

Productive biological assets

Oil and gas assets

Right-of-use assets

Intangible assets

Development expenses

Goodwill

Long-term deferred expenses

Deferred tax assets

Other non-current assets

Total non-current assets

Total assets

Current liabilities:

Short-term borrowings

Borrowings from the central bank

Loans from other banks

Held-for-trading financial liabilities

Derivative financial liabilities

Bills payable

Accounts payable

Advance payments received

Contract liabilities

Funds from selling out and repurchasing financial assets

Receipts of deposits and deposits from other banks

Accounts payable to brokerage customers

Items

Proceeds from underwriting securities received on behalf of customers

Employee benefits payable

Taxes payable

Other payables

Including: Interest payable

Dividends payable

Fees and commissions payable

Reinsurance accounts payable

Liabilities held for sale

Non-current liabilities due within one year

Other current liabilities

Total current liabilities

Non-current liabilities:

Reserves for insurance contracts

Long-term borrowings

Bonds payable

Including: Preferred shares

Perpetual bonds

Lease liabilities

Long-term payables

Long-term salaries payable

Accrued liabilities

Deferred income

Deferred tax liabilities

Other non-current liabilities

Items

Total non-current liabilities

Total liabilities

Owners’ equity (or shareholders’ equity):

Share capital (or issued capital)

Other equity instruments

Including: Preferred shares

Perpetual bonds

Capital reserve

Less: Inventory shares

Other comprehensive income

Specific reserve

Surplus reserve

General risk reserve

Retained earnings

Total equity attributable to shareholders of the Company

Non-controlling interests

Total owners’ equity (or shareholders’ equity)

Total liabilities and owners’ equity (or shareholders’ equity)

Responsible person

of the Company:

Ma Xu Lun

Responsible person of the

accounting of the Company:

Yao Yong

Responsible person of the

accounting department:

Mao Juan

Items

I.   Total revenue

Including: Operating revenue

Interest income

Premiums earned

Fees and commissions income

II. Total operating costs

Including: Cost of sales

Interest expense

Fees and commissions expense

Surrender payment

Net payment for insurance claim

Net provisions for insurance liability

Expenditure for insurance policy dividend

Reinsurance costs

Taxes and surcharges

Promotion and selling expenses

General and administrative expenses

Research and development expenses

Financial expenses

Including: Interest expenses

Interest income

Items

Add: Other income

Investment income (“-” for losses)

Including: Share of profit of associates and joint ventures

Derecognition of income from financial assets at amortised cost

Exchange gain (“–” for losses)

Gain arising from net exposure hedge (“–” for losses)

Gains arising from changes in fair value (“-” for losses)

Credit losses (“-” for losses)

Impairment losses on property, plant and equipment and right- of-use rights (“–” for losses)

Gains on disposal of assets (“–” for losses)

III.  Operating profit (“-” for losses)

Add: Non-operating income

Less: Non-operating expenses

IV.  Total profits (“-” for total losses)

Less: Income tax expenses

V. Net profit (“-” for net losses)

(I)   Net profit classified by continuity of operations

1.  Net profit from continuing operations (“-” for net losses)

2.  Net profit from discontinued operations (“-” for net losses)

(II)  Net profit classified by ownership

1.  Net profit attributable to shareholders of the Company (“-” for net losses)

2.  Non-controlling interests (“-” for net losses)

Items

VI.  Other comprehensive income, net of tax

(I)   Other comprehensive income (net of tax) attributable to shareholders of the Company

1.  Items that will not be reclassified to profit or loss

(1)   Change in defined benefit plans arising from re-measurement

(2)   Equity-accounted investees – share of other comprehensive income (non-recycling)

(3)   Changes in fair value of other equity instruments

(4)   Change in fair value of the Company’s own credit risk

2.  Items that may be reclassified subsequently to profit or loss

(1)   Equity-accounted investees-share of other comprehensive income (recycling)

(2)   Change in fair value of other debt investments

(3)   Financial assets reclassified into other comprehensive income

(4)   Provision for credit impairment of other debt investments

(5)   Cash flow hedge: fair value movement of derivative financial assets/liabilities

(6)   Translation differences arising on translation of foreign currency financial statements

(7)   Others

(II)  Other comprehensive income (net of tax) attributable to non-controlling interests

Items

VII.  Total comprehensive income

(I)   Attributable to shareholders of the Company

(II)  Attributable to non-controlling interests

VIII.Earnings per share:

(I)   Basic earnings per share (RMB/share)

(II)  Diluted earnings per share (RMB/share)

Responsible person

of the Company:

Responsible person of the

accounting of the Company:

Responsible person of the

accounting department:

Items

I.   Cash flows from operating activities:

Proceeds from sale of goods and rendering of services

Net increase in customer and interbank deposits

Net increase in borrowings from the central bank

Net cash increase in placements from other financial institutions

Cash received from premiums under original insurance contracts

Net cash received from reinsurance business

Net increase in deposits of policy holders and investment funds

Cash received from interest, fees and commissions

Net increase in capital due to banks and other financial institutions

Net increase in cash received from repurchase business

Net cash received by agents for trading in securities

Items

Refund of taxes and surcharges

Proceeds from other operating activities

Sub-total of operating cash inflows from operating activities

Payment for goods and services

Net increase in customer loans and advances to customers

Net increase in deposits in the central bank and interbank deposits

Cash paid for compensation payments under original insurance contracts

Net increase in placements with banks and other financial institutions

Cash paid for interest, fees and commissions

Cash paid for insurance policy dividend

Payment to and for employees

Payment of taxes and surcharges

Payment for other operating activities

Sub-total of cash outflows from operating activities

Net cash flows from operating activities

II.   Cash flows from investment activities:

Cash received from return of investments

Cash received on investment income

Net proceeds from disposal of fixed assets, intangible assets and other long-term assets

Net cash received from disposal of subsidiaries and other operating units

Proceeds from other investing activities

Sub-total of cash inflows from investing activities

Payment for acquisition of fixed assets, intangible assets and other long-term assets

Cash paid for investment

Net increase in secured loans

Items

Net cash paid for acquisition of subsidiaries and other operating units

Other cash paid relating to investing activities

Sub-total of cash outflows from investment activities

Net cash flows from investing activities

III. Cash flows from financing activities:

Proceeds from investors

Including: Proceeds from non-controlling shareholders of subsidiaries

Proceeds from borrowings

Proceeds from other financing activities

Sub-total of cash inflows from financing activities

Repayments of borrowings

Payment for dividends, profit distributions or interest

Including: Dividends and profits paid to non-controlling shareholders of subsidiaries

Payment for other financing activities

Sub-total of cash outflows from financing activities

Net cash flows from financing activities

IV.  Effect of changes in exchange rate on cash and cash equivalents

V. Net increase in cash and cash equivalents

Add: Cash and cash equivalents at the beginning of the period

VI.  Cash and cash equivalents at the end of the period

Responsible person

of the Company:

Responsible person of the

accounting of the Company:

Responsible person of the

accounting department:

Adjustment to relevant items of the financial statements at the beginning of the first adoption year due to the first adoption of new accounting standard or interpretation of accounting standards in 2023