CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2023
(All amounts in RMB millions)
(All amounts in RMB millions)
Year ended 31 December
| 2022 | 2023 | ||
| Cash flows from operating activities | |||
| Cash generated from operations | 103,365 | 106,022 | |
| Interest received | 1,747 | 2,105 | |
| Interest paid | (1,150) | (1,906) | |
| Income tax paid | (3,425) | (3,830) | |
| Net cash inflow from operating activities | 100,537 | 102,391 | |
| Cash flows from investing activities | |||
| Purchase of property, plant and equipment, right-of-use assets and other assets | (a) | (72,470) | (79,375) |
| Proceeds from disposal of property, plant and equipment and other assets | 1,710 | 1,388 | |
| Acquisition of financial assets measured at fair value through profit or loss (“FVPL”) | (1,741) | (1,230) | |
| Proceeds from disposal of financial assets measured at FVPL | 1,876 | 1,707 | |
| Acquisition of debt securities measured at FVOCI (recycling) | (17,630) | (22,980) | |
| Proceeds from disposal of debt securities measured at FVOCI (recycling) | 26,864 | 17,397 | |
| Proceeds from equity securities measured at FVOCI (non-recycling) | 1 | – | |
| Decrease/(increase) in other financial assets measured at amortised cost | 700 | (5,424) | |
| Dividends received from financial assets measured at FVOCI (non-recycling) | 149 | 159 | |
| Acquisition of interest in associates | (1) | (776) | |
| Acquisition of interest in joint ventures | – | (5) | |
| Proceeds from disposal of associates and joint ventures | – | 400 | |
| Dividends received from associates | 998 | 1,246 | |
| Dividends received from joint venture | 150 | 150 | |
| Placement of short-term bank deposits and restricted deposits | (9,818) | (11,015) | |
| Release of short-term bank deposits and restricted deposits | 7,300 | 12,815 | |
| Lending by Unicom Group Finance Company Limited (“Finance Company”) to a related party | (11,800) | (5,700) | |
| Repayment of loans from a related party to Finance Company | 17,600 | 5,700 | |
| Net cash outflow from investing activities | (56,112) | (85,543) | |
| Cash flows from financing activities | |||
| Capital contributions from non-controlling interests | 867 | 386 | |
| Proceeds from bank loans and other obligations | 330 | 711 | |
| Proceeds from commercial papers | 5,000 | – | |
| Loans from related parties | 471 | 583 | |
| Repayment of short-term bank loans | (385) | (330) | |
| Repayment of long-term bank loans | (420) | (385) | |
| Repayment of commercial papers | (6,800) | (5,000) | |
| Repayment of related party loans | – | (913) | |
| Repayment of promissory notes | (1,000) | – | |
| Repayment of corporate bonds | (2,000) | – | |
| Capital element of lease rentals paid | (13,373) | (12,103) | |
| Payment of issuing expense for commercial papers | (5) | – | |
| Dividends paid to equity shareholders of the Company | (7,986) | (9,546) | |
| Net deposits with Finance Company | 621 | 949 | |
| Decrease in statutory reserve deposits placed by Finance Company | 870 | 1,542 | |
| Repayment of other obligations | – | (409) | |
| Net cash outflow from financing activities | (23,810) | (24,515) | |
| Net increase/(decrease) in cash and cash equivalents | 20,615 | (7,667) | |
| Cash and cash equivalents, beginning of year | 34,280 | 55,297 | |
| Effect of changes in foreign exchange rate | 402 | 103 | |
| Total cash and cash equivalents, end of year | 29 | 55,297 | 47,733 |
| Analysis of the balances of cash and cash equivalents: | |||
| Cash balances | – | – | |
| Bank balances | 55,297 | 47,733 | |
| 55,297 | 47,733 |
(a) Major non-cash transaction: On 13 December 2022, the Board of Directors of the Company approved China United Network Communications Corporation Limited (“CUCL”) and China Tower Corporation Limited (“Tower Company”) to sign the commercial pricing agreement and the service agreement, which constituted a lease modification under HKFRS 16, “Leases”, the transaction has no impact on the consolidated statement of cash flows for the year ended 31 December 2022. Details of this transaction are set out in Note 16 and Note 45.
The notes on pages 102 to 201 are an integral part of these consolidated financial statements.
The reconciliation of profit before income tax to cash generated from operations is as follows:
Year ended 31 December
| 2022 | 2023 | ||
| Profit before income tax | 20,588 | 22,945 | |
| Adjustments for: | |||
| Depreciation and amortisation | 86,829 | 84,847 | |
| Interest income | (1,747) | (2,105) | |
| Finance costs | 1,046 | 1,956 | |
| Loss on disposal of property, plant and equipment | 1,882 | 1,181 | |
| Impairment losses under expected credit loss ("ECL") model and write-down of inventories | 6,918 | 6,356 | |
| Dividends from financial assets measured at FVOCI (non-recycling) | (149) | (159) | |
| Gains on disposal of financial assets measured at FVPL | (72) | (14) | |
| Gains on disposal of financial assets measured at FVOCI (recycling) | – | (1) | |
| Dividends from financial assets at FVPL | – | (2) | |
| Investment income from debt securities measured at FVOCI (recycling) | (438) | (424) | |
| Fair value gains on financial assets measured at FVPL | (24) | (114) | |
| Share of net profit of associates | (2,153) | (2,519) | |
| Share of net profit of joint ventures | (1,593) | (1,803) | |
| Expenses for restricted shares of A Share Company granted to the Group's employees | 55 | 282 | |
| Changes in working capital: | |||
| Increase in accounts receivable | (13,718) | (18,212) | |
| Decrease/(increase) in contract assets | 147 | (28) | |
| Increase in contract costs | (5,529) | (8,498) | |
| Increase in inventories | (338) | (94) | |
| (Increase)/decrease in restricted deposits | (1,083) | 278 | |
| Increase in other assets | (1,108) | (199) | |
| Increase in prepayments and other current assets | (3,611) | (193) | |
| Decrease/(increase) in amounts due from ultimate holding company | 188 | (4) | |
| Increase in amounts due from related parties | (195) | (123) | |
| Decrease/(increase) in amounts due from domestic carriers | 63 | (323) | |
| Increase in accounts payable and accrued liabilities | 14,866 | 12,124 | |
| Increase in other taxes payable | 742 | 515 | |
| Increase/(decrease) in advances from customers | 266 | (100) | |
| (Decrease)/increase in contract liabilities | (990) | 1,465 | |
| Increase in deferred revenue | 980 | 1,464 | |
| Increase/(decrease) in other obligations | 83 | (49) | |
| Decrease/(increase) in amounts due to ultimate holding company | (2,440) | 25 | |
| Increase in amounts due to related parties | 4,037 | 6,714 | |
| (Decrease)/increase in amounts due to domestic carriers | (137) | 834 | |
| Cash generated from operations | 103,365 | 106,022 |
The notes on pages 102 to 201 are an integral part of these consolidated financial statements.
