Copa Holdings Reports Financial Results for the First Quarter of 2023

May 10, 2023

PANAMA CITY, May 10, 2023 /PRNewswire/ -- Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the first quarter of 2023 (1Q23). The terms "Copa Holdings" and the "Company" refer to the consolidated entity. The following financial information, unless otherwise indicated, is presented in accordance with International Financial Reporting Standards (IFRS). See the accompanying reconciliation of non-IFRS financial information to IFRS financial information included in the financial tables section of this earnings release. Unless otherwise stated, all comparisons with prior periods refer to the first quarter of 2019 (1Q19) (which the Company believes are more relevant than year-over-year comparisons due to the significant impact of the COVID-19 pandemic in 2020, 2021, and 2022).

OPERATING AND FINANCIAL HIGHLIGHTS

  • Copa Holdings reported a net profit of US$121.5 million for 1Q23 or US$3.07 per share, as compared to a net profit of US$89.4 million or earnings per share of US$2.11 in 1Q19. Excluding special items comprised of the unrealized mark-to-market net loss of US$36.3 million related to the Company's convertible notes, as well as changes in the value of financial investments, the Company would have reported a net profit of US$157.8 million or US$3.99 per share.
  • Copa Holdings reported an operating profit of US$193.2 million and a 22.3% operating margin for the quarter, as compared to an operating profit of US$112.9 million and an operating margin of 16.8% in 1Q19.
  • Passenger traffic, measured in terms of revenue passenger miles (RPMs), increased by 7.1% compared to 1Q19, while capacity (available seat miles or ASMs) increased by 2.8%. As a result, the load factor for the quarter increased by 3.5 percentage points to 86.8%, as compared to 1Q19.
  • Total revenues for 1Q23 increased 29.0% to US$867.3 million, as compared to 1Q19 revenues. Yields increased 20.0% to 14.6 cents and revenue per available seat mile (RASM) increased 25.5% to 13.1 cents.
  • Operating cost per available seat mile (CASM) increased 17.2% from 8.7 cents in 1Q19 to 10.2 cents in 1Q23, mainly driven by an increase of 61.4% in the price of jet fuel per gallon. CASM excluding fuel (Ex-fuel CASM) increased 2.1% in the quarter to 6.2 cents, as compared to 1Q19.
  • The Company ended the quarter with approximately US$1.2 billion in cash, short-term and long-term investments, which represent 36.3% of the last twelve months' revenues.
  • The Company closed the quarter with total debt, including lease liabilities, of US$1.7 billion, while our Net Debt to EBITDA ratio ended at 0.6 times, a decrease when compared to the previous quarter.
  • During the quarter, the Company took delivery of two Boeing 737 MAX 9 aircraft, ending the quarter with a consolidated fleet of 99 aircraft – 67 Boeing 737-800s, 22 Boeing 737 MAX 9s, 9 Boeing 737-700s, and 1 Boeing 737-800 freighter, compared to a fleet of 102 aircraft prior to the COVID-19 pandemic.
  • Copa Airlines had an on-time performance for the quarter of 92.2% and a flight completion factor of 99.9%, once again positioning itself among the very best in the industry.

Subsequent Events

  • Copa Holdings will pay its second quarterly dividend of $0.82 per share on June 15, to all Class A and Class B shareholders on record as of May 31, 2023.

 

Consolidated Financial
& Operating Highlights

1Q23

1Q19 (2)

Variance vs. 1Q19

4Q22

Variance vs. 4Q22

Revenue Passengers Carried (000s)

2,881

2,588

11.3 %

2,813

2.4 %

Revenue Passengers OnBoard (000s)

4,295

3,830

12.1 %

4,262

0.8 %

RPMs (millions)

5,723

5,345

7.1 %

5,639

1.5 %

ASMs (millions)

6,596

6,415

2.8 %

6,509

1.3 %

Load Factor

86.8 %

83.3 %

3.5 pp

86.6 %

0.1 pp

Yield (US$ Cents)

14.6

12.1

20.0 %

15.1

-3.6 %

PRASM (US$ Cents)

12.6

10.1

25.0 %

13.1

-3.4 %

RASM (US$ Cents)

13.1

10.5

25.5 %

13.7

-3.9 %

CASM (US$ Cents)

10.2

8.7

17.2 %

10.3

-0.9 %

CASM Excl. Fuel (US$ Cents)

6.2

6.1

2.1 %

6.1

1.5 %

Fuel Gallons Consumed (millions)

78.2

81.2

-3.7 %

77.7

0.6 %

Avg. Price Per Fuel Gallon (US$)

3.36

2.09

61.4 %

3.52

-4.5 %

Average Length of Haul (miles)

1,987

2,065

-3.8 %

2,005

-0.9 %

Average Stage Length (miles)

1,281

1,299

-1.4 %

1,266

1.2 %

Departures

31,984

33,329

-4.0 %

32,112

-0.4 %

Block Hours

104,626

110,089

-5.0 %

104,822

-0.2 %

Average Aircraft Utilization (hours)

11.9

11.6

1.9 %

11.8

0.8 %

Operating Revenues (US$ millions)

867.3

672.2

29.0 %

890.6

-2.6 %

Operating Profit (Loss) (US$ millions)

193.2

112.9

71.2 %

219.7

-12.0 %

Operating Margin

22.3 %

16.8 %

5.5 p.p

24.7 %

-2.4 p.p

Net Profit (Loss) (US$ millions)

121.5

89.4

35.9 %

88.3

37.7 %

Adjusted Net Profit (Loss) (US$ millions) (1)

157.8

89.4

76.4 %

177.7

-11.2 %

Basic EPS (US$)

3.07

2.11

45.9 %

2.23

37.6 %

Adjusted Basic EPS (US$) (1)

3.99

2.11

89.4 %

4.49

-11.2 %

Shares for calculation of Basic EPS (000s)

39,565

42,478

-6.9 %

39,554

0.0 %

(1)  Excludes Special Items. This earnings release includes a reconciliation of non-IFRS financial measures to the comparable IFRS measures.
(2)  The Company believes that comparisons with 2019 are more relevant than year-over-year comparisons due to the significant impacts of the COVID-19 pandemic in 2020, 2021, and 2022.

FULL 1Q23 EARNINGS RELEASE AVAILABLE FOR DOWNLOAD AT:

https://copa.gcs-web.com/financial-information/quarterly-results

1Q23 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST

 

Date:

May 11, 2023



Time:

11:00 AM US ET (10:00 AM Local Time)



Join by phone: 

https://register.vevent.com/register/BI7e75fe208db54227b4d9cb0f39ad70f8%20



Webcast (listen-only):

https://copa.gcs-web.com/events-and-presentations



Speakers:

Pedro Heilbron, Chief Executive Officer




José Montero, Chief Financial Officer



 

About Copa Holdings
Copa Holdings is a leading Latin American provider of passenger and cargo services. The Company, through its operating subsidiaries, provides service to countries in North, Central, and South America and the Caribbean. For more information visit: www.copaair.com. 

CONTACT:  Copa Holdings S.A.
Investor Relations:
Ph: 011 507 304-2774
www.copaair.com (IR section)

This release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current plans, estimates, and expectations, and are not guarantees of future performance. They are based on management's expectations that involve several business risks and uncertainties, any of which could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. The Company undertakes no obligation to update or revise any forward-looking statement. The risks and uncertainties relating to the forward-looking statements in this release are among those disclosed in Copa Holdings' filed disclosure documents and are, therefore, subject to change without prior notice.

CPA-G

Copa Holdings, S.A










Income Statement - IFRS










(US$ Thousands)












Unaudited


Unaudited


%

Unaudited


%



1Q23


1Q19


Change

4Q22


Change

Operating Revenues










Passenger revenue


834,018


648,790


28.5 %

852,291


-2.1 %

Cargo and mail revenue


23,252


15,316


51.8 %

27,095


-14.2 %

Other operating revenue


9,995


8,063


24.0 %

11,226


-11.0 %

Total Operating Revenue


867,264


672,169


29.0 %

890,612


-2.6 %











Operating Expenses










Fuel


265,498


170,163


56.0 %

273,901


-3.1 %

Wages, salaries, benefits and other employees' expenses


102,652


113,662


-9.7 %

105,019


-2.3 %

Passenger servicing


20,391


25,571


-20.3 %

19,518


4.5 %

Airport facilities and handling charges


50,479


45,362


11.3 %

49,734


1.5 %

Sales and distribution


61,406


53,133


15.6 %

61,498


-0.1 %

Maintenance, materials and repairs


40,296


28,047


43.7 %

28,875


39.6 %

Depreciation and amortization


72,677


68,187


6.6 %

70,251


3.5 %

Flight operations


27,424


25,875


6.0 %

25,667


6.8 %

Other operating and administrative expenses


33,228


29,297


13.4 %

36,492


-8.9 %

Total Operating Expense


674,053


559,296


20.5 %

670,954


0.5 %











Operating Profit/(Loss)


193,212


112,873


71.2 %

219,657


-12.0 %











Non-operating Income (Expense):










Finance cost


(24,365)


(14,010)


73.9 %

(23,388)


4.2 %

Finance income


8,842


5,954


48.5 %

7,413


19.3 %

Gain (loss) on foreign currency fluctuations


1,201


(5,960)


-120.2 %

(2,560)


-146.9 %

Net change in fair value of derivatives


(37,933)


-


-100.0 %

(91,305)


-58.5 %

Other non-operating income (expense)


1,235


(825)


-249.7 %

1,221


1.1 %

Total Non-Operating Income/(Expense)


(51,020)


(14,841)


243.8 %

(108,619)


-53.0 %











Profit before taxes


142,192


98,032


45.0 %

111,039


28.1 %











Income tax expense


(20,671)


(8,600)


140.4 %

(22,758)


-9.2 %











Net Profit/(Loss)


121,521


89,431


35.9 %

88,280


37.7 %











EPS










Basic


3.07


2.11


45.9 %

2.23


37.6 %











Shares used for calculation:










Basic


39,565,223


42,477,761


-6.9 %

39,554,071


0.0 %

 

Copa Holdings, S. A. and subsidiaries



Consolidated statement of financial position



(US$ Thousands)




March 2023

December 2022

 ASSETS

 (Unaudited)

(Audited)

Cash and cash equivalents

242,314

122,424

Short-term investments

773,493

812,323

Total cash, cash equivalents and short-term investments

1,015,807

934,747




Accounts receivable, net

165,111

135,415

Accounts receivable from related parties

1,833

2,168

Expendable parts and supplies, net

101,680

93,332

Prepaid expenses

49,917

52,322

Prepaid income tax

370

798

Other current assets

23,665

17,043


342,576

301,078

TOTAL CURRENT ASSETS

1,358,383

1,235,825




Long-term investments

166,481

202,056

Long-term prepaid expenses

6,494

7,770

Property and equipment, net

2,967,611

2,883,524

Right of use assets

238,269

234,380

Intangible, net

80,765

78,555

Net defined benefit assets

1,048

504

Deferred tax assets

31,636

30,743

Other Non-Current Assets

16,277

17,005

TOTAL NON-CURRENT ASSETS

3,508,581

3,454,537




TOTAL ASSETS

4,866,964

4,690,362




LIABILITIES



Loans and borrowings

144,203

142,484

Current portion of lease liability

77,412

80,084

Accounts payable

163,236

166,660

Accounts payable to related parties

1,944

1,004

Air traffic liability

611,437

651,805

Frequent flyer deferred revenue

114,976

111,526

Taxes Payable

67,122

43,878

Employee benefits obligations

31,534

44,913

Income tax payable

12,414

6,276

Other Current Liabilities

1,366

1,175

TOTAL CURRENT LIABILITIES

1,225,644

1,249,805




Loans and borrowings long-term

1,327,441

1,301,819

Lease Liability

162,029

158,289

Derivative financial instruments

289,083

251,150

Deferred tax Liabilities

25,783

16,571

Other long - term liabilities

232,941

220,618

TOTAL NON-CURRENT LIABILITIES

2,037,277

1,948,447




TOTAL LIABILITIES

3,262,921

3,198,252




EQUITY



Class A - 34,064,142  issued and 28,388,261 outstanding

21,362

21,327

Class B - 10,938,125

7,466

7,466

Additional Paid-In Capital

104,606

103,465

Treasury Stock

(357,087)

(344,541)

Retained Earnings

1,717,620

1,367,784

Net profit

121,521

348,054

Other comprehensive loss

(11,445)

(11,445)




TOTAL EQUITY

1,604,043

1,492,110

TOTAL EQUITY LIABILITIES

4,866,964

4,690,362

 

Copa Holdings, S. A. and subsidiaries







Consolidated Statement of Cash Flows







For the three months ended March 31,







(In US$ thousands)

















2023


2022


2021










(Unaudited)


(Unaudited)


(Unaudited)

Cash flow from (used in) operating activities


203,419


169,336


(892)

Cash flow used in investing activities


(62,868)


(120,515)


(86,697)

Cash flow (used in) from financing activities


(20,661)


(10,888)


162,325

Net increase in cash and cash equivalents


119,890


37,933


74,736

Cash and cash equivalents at January 1


122,424


211,081


119,065

Cash and cash equivalents at March 31


$                    242,314


$                    249,014


$                    193,801















Short-term investments


773,493


771,074


898,453

Long-term investments


166,481


204,810


111,001

Total cash and cash equivalents and investments at March 31


$                1,182,288


$                1,224,898


$                1,203,255

 

Copa Holdings, S.A.

NON-IFRS FINANCIAL MEASURE RECONCILIATION

This press release includes the following non-IFRS financial measures: Adjusted Net Profit, Adjusted Basic EPS, and Operating CASM Excluding Fuel. This supplemental information is presented because we believe it is a useful indicator of our operating performance and is useful in comparing our performance with other companies in the airline industry. These measures should not be considered in isolation and should be considered together with comparable IFRS measures, in particular operating profit, and net profit. The following is a reconciliation of these non-IFRS financial measures to the comparable IFRS measures:

Reconciliation of Adjusted Net Profit


1Q23


1Q22


4Q22


1Q19










Net Profit as Reported


$     121,521


$       19,759


$       88,280


$       89,431

   Add: Net change in fair value of derivatives


$       37,933


$          6,752


$       91,305



   Add: Net change in fair value of financial investments


$        (1,655)


$          2,979


$        (1,924)



Adjusted Net Profit


$     157,798


$       29,490


$     177,661


$       89,431










Reconciliation of Adjusted Basic EPS


1Q23


1Q22


4Q22


1Q19










Adjusted Net Profit


$     157,798


$       29,490


$     177,661


$       89,431

Shares used for calculation of Basic EPS


39,565


42,006


39,554


42,478

Adjusted Basic Earnings per share (Adjusted Basic EPS)


$            3.99


$            0.70


$            4.49


$            2.11










Reconciliation of Operating Costs per ASM









Excluding Fuel (CASM Excl. Fuel)


1Q23


1Q22


4Q22


1Q19










Operating Costs per ASM as Reported (in US$ Cents)


10.2


9.4


10.3


8.7

Aircraft Fuel Cost per ASM  (in US$ Cents)


4.0


3.4


4.2


2.7

Operating Costs per ASM excluding fuel (in US$ Cents)


6.2


6.0


6.1


6.1

 

Cision View original content:https://www.prnewswire.com/news-releases/copa-holdings-reports-financial-results-for-the-first-quarter-of-2023-301821438.html

SOURCE Copa Holdings, S.A.

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