CHINA EASTERN AIRLINES CORP LTD | CIK:0001030475 | 3

  • Filed: 4/25/2018
  • Entity registrant name: CHINA EASTERN AIRLINES CORP LTD (CIK: 0001030475)
  • Generator: Donnelley Financial Solutions
  • SEC filing page: http://www.sec.gov/Archives/edgar/data/1030475/000119312518130055/0001193125-18-130055-index.htm
  • XBRL Instance: http://www.sec.gov/Archives/edgar/data/1030475/000119312518130055/cea-20171231.xml
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    • ifrs-full:DisclosureOfDerivativeFinancialInstrumentsExplanatory

    39 DERIVATIVE FINANCIAL INSTRUMENTS

     

         Assets      Liabilities  
         2017      2016      2017      2016  
         RMB million      RMB million      RMB million      RMB million  

    At 31 December

    		            

    Interest rate swaps (note (a))

    		      151        137        14        47  

    Forward foreign exchange contracts (note (b))

    		      —          11        311        11  

    Total

    		      151        148        325        58  
      

     

     

    		     

     

     

    		     

     

     

    		     

     

     

    		  

    Less: current portion

    		            

    – Forward foreign exchange contracts

    		      —          (11 )       (324 )       (11 ) 
      

     

     

    		     

     

     

    		     

     

     

    		     

     

     

    		  

    Non-current portion

    		      151        137        1        47  
      

     

     

    		     

     

     

    		     

     

     

    		     

     

     

    		  

    Notes:

     

      (a) Interest rate swaps

    The Group uses interest rate swaps to reduce the risk of changes in market interest rates (note 40). The interest rate swaps entered into by the Group for swapping floating interest rates, usually referenced to LIBOR, into fixed rates are accounted for as cash flow hedges. As at 31 December 2017, the notional amount of the outstanding interest rate swap agreements was approximately USD1,420 million (2016: USD1,636 million). These agreements will expire between 2018 and 2025.

    Realized and unrealized gains and losses arising from the valuation of these interest rate swaps have been dealt with in the consolidated statement of profit or loss and other comprehensive income as follows:

     

         2017      2016      2015  
         RMB million      RMB million      RMB million  

    Realized losses (recorded in finance costs)

    		      (63 )       (122 )       (134 ) 

    Unrealized mark to market gains

    		         

    – cash flow hedges (recognized in other comprehensive income)

    		      47        166        2  

    – fair value hedges (recognized in (loss)/gain on fair value changes of derivative financial instruments)

    		      —          2        6  
      

     

     

    		     

     

     

    		     

     

     

    		  
         (16 )       46        (126 ) 
      

     

     

    		     

     

     

    		     

     

     

    		  

     

      (b) Forward foreign exchange contracts

    The Group uses foreign exchange forward contracts to reduce the risk of changes in currency exchange rates in respect of ticket sales and expenses denominated in foreign currencies (note 3). The Group’s foreign exchange forward contracts for selling RMB and purchasing USD at fixed exchange rates are accounted for as fair value hedges. As at 31 December 2017, the notional amount of the outstanding currency forward contracts was approximately USD829 million (2016: USD440 million), which will expire in 2018.

    Realized and unrealized gains and losses arising from the valuation of these contracts have been dealt with in the consolidated statement of profit or loss and other comprehensive income as follows:

     

         2017      2016      2015  
         RMB million      RMB million      RMB million  

    Realized (losses)/gains (recorded in finance costs)

    		      (177 )       5        15  

    Unrealized mark to market losses

    		         

    – cash flow hedges (recognized in other comprehensive income)

    		      —          (16 )       (11 ) 

    – fair value hedges (recognized in (loss)/gain on fair value changes of derivative financial instruments)

    		      (311 )       —          —    
      

     

     

    		     

     

     

    		     

     

     

    		  
         (488 )       (11 )       4  
      

     

     

    		     

     

     

    		     

     

     

    		  

     

      (c) Cross currency swap

    The Group uses cross currency swap to reduce the risk of changes in currency exchange rates and market interest rates. The cross currency swap entered into by the Group for swapping US dollars floating interest rates (LIBOR) into Euro floating interest rates (EURIBOR), is accounted for as a cash flow hedge. As at 31 December 2017, there were no outstanding cross currency swap (2016:nil).

    Realized and unrealized gain and loss arising from the valuation of the contract has been dealt with in the consolidated statement of profit or loss and other comprehensive income as follows:

     

         2017      2016      2015  
         RMB million      RMB million      RMB million  

    Realized gains (recorded in finance costs)

    		      —          5        —    

    Unrealized mark to market (losses)/gains

    		         

    – cash flow hedge (recognized in other comprehensive income)

    		      —          (7 )       7  
      

     

     

    		     

     

     

    		     

     

     

    		  
         —          (2 )       7