Copa Holdings Reports Financial Results for the Fourth Quarter of 2020

Feb 10, 2021

PANAMA CITY, Panama, Feb. 10, 2021 /PRNewswire/ -- Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the fourth quarter of 2020 (4Q20). 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 fourth quarter of 2019 (4Q19).

The financial information included in this press release is preliminary, as the Company has not yet issued its audited financial statements.  This information presented herein may differ from those results. During the preparation of the financial statements and related notes and our year-end audit, additional items that would require material adjustments to the preliminary financial information included in this press release may be identified.

Due to the continued effects of the Covid-19 pandemic on the aviation industry, the Company operated on average, at approximately 27% of the capacity for the same period in 2019.  Therefore, this earnings release will focus on the financial results and metrics that are relevant in these circumstances and will omit certain financial ratios, unit metrics and operational indicators that are usually provided, since they are either not measurable, not meaningful or not material on such a limited operational base.

OPERATING AND FINANCIAL HIGHLIGHTS

  • Copa Holdings reported a net loss of US$168.8 million for the quarter, or US$3.97 per share. Excluding special items, the Company would have reported a net loss of US$85.2 million, or US$2.00 per share. Special items for the quarter include an US$80.1 million unrealized mark-to-market loss related to the Company's convertible notes, a US$4.4 million asset impairment charge on the Boeing 737-700 fleet, and a US$0.9 million gain on the Embraer assets held for sale.
  • Copa Holdings reported an operating loss of US$95.1 million for the quarter. Excluding special items, the Company would have reported an operating loss of US$91.5 million.
  • For the full year 2020, Copa Holdings reported a net loss of US$598.6 million, or US$14.08 per share. Excluding special items, the Company would have reported a net loss of US$259.5 million, or US$6.11 per share. Special items for the full year include a US$191.2 million in total impairment charges related to the Boeing 737-700 fleet, a US$98.7 million unrealized mark-to-market loss on to the Company's convertible notes, and a US$49.2 million expected loss on the Embraer assets held for sale.
  • For the full year 2020, Copa Holdings reported an operating loss of US$460.9 million. Excluding special items, the Company would have reported an operating loss of US$220.6 million for 2020.
  • Cash consumption, defined as cash disbursements less proceeds, excluding extraordinary financing activities and asset sales, averaged approximately US$6 million per month during the quarter. Cash consumption for the quarter benefited from changes in working capital, as cash proceeds increased ahead of capacity growth, while cash outflows lagged given the timing of certain accounts payable.
  • The Company ended the quarter with US$1.3 billion of available liquidity, consisting of approximately US$1.0 billion in cash, short-term and long-term investments, and committed and undrawn credit facilities of US$305 million.
  • The Company closed the quarter with total debt, including lease liabilities, of US$1.4 billion.
  • The Company's flight operations, measured in terms of available seat miles (ASMs), represented 15% in October, 28% in November, and 39% in December, as compared to the same periods in 2019. For the quarter, the Company's ASMs were approximately 27% of ASMs in the same period in 2019.
  • During the quarter, the Company completed the delivery of 5 Embraer 190 aircraft that were previously sold to a third party. As of December 31, 2020, there were 8 Embraer 190 aircraft sold and pending to be delivered.
  • In December, The Export-Import Bank of the United States authorized a final commitment for a guaranteed loan in an amount up to US$327.9 million, related to 7 737 MAX 9 aircraft to be delivered to the Company during 2020 and 2021.
  • In December, the Company took delivery of 1 Boeing 737 MAX 9. Excluding the aircraft classified as assets held for sale, Copa Holdings ended the year with a consolidated fleet of 75 aircraft – 68 Boeing 737-800s and 7 Boeing 737 MAX 9s, compared to a total fleet of 102 aircraft by year end 2019.

Subsequent Events

  • In January, the Company delivered 1 Embraer 190 aircraft, out of 14 that were sold to a third party.
  • In January and the first week of February, the Company took delivery of 3 Boeing 737 MAX 9s and expects to receive 3 additional Boeing 737 MAX 9s by the end of the first quarter.
  • During the month of February, the company added new credit facility commitments for an aggregate amount of US$40 million, bringing the total of undrawn committed credit facilities to US$345 million.
  • The Company has reached an agreement with Boeing regarding compensation related to the Boeing 737 MAX grounding. Terms remain confidential.

 

Consolidated Financial
& Operating Highlights

4Q20

4Q19

Variance
vs. 4Q19

3Q20

Variance
vs. 3Q20

2020

2019

Variance
vs. 2019

Revenue Passengers Carried (000s)

696

2,633

-73.6%

30

2256.3%

2,852

10,474

-72.8%

RPMs (millions) 

1,267

5,244

-75.8%

57

2130.0%

5,812

21,303

-72.7%

ASMs (millions) 

1,684

6,149

-72.6%

95

1667.7%

7,301

25,113

-70.9%

Load Factor 

75.3%

85.3%

-10.0 p.p.

59.7%

15.6 p.p.

79.6%

84.8%

-5.2 p.p.

Fuel Gallons Consumed (millions) 

20.75

78.94

-73.7%

1.32

1469.1%

92.8

321.4

-71.1%

Avg. Price Per Fuel Gallon (US$)

1.41

2.16

-34.7%

1.41

-0.3%

1.81

2.16

-16.0%

Average Length of Haul (miles)

1,822

1,992

-8.5%

1,925

-5.4%

2,038

2,034

0.2%

Average Stage Length (miles)

1,211

1,279

-5.4%

1,081

12.0%

1,278

1,288

-0.8%

Departures

8,795

32,441

-72.9%

559

1473.3%

37,865

131,819

-71.3%

Block Hours

26,870

105,620

-74.6%

1,710

1471.8%

122,968

431,749

-71.5%

Average Aircraft Utilization (hours) (2)

5.2

11.3

-53.8%

0.9

477.8%

7.5

11.4

-70.8%

Operating Revenues (US$ millions) 

158.6

681.9

-76.7%

32.4

389.9%

801.0

2,707.4

-70.4%

Operating Profit (Loss) (US$ millions)

-95.1

17.8

-633.9%

-107.0

-11.1%

-460.9

346.2

-233.2%

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

-91.5

107.1

-185.4%

-107.0

-14.4%

-220.6

435.5

-150.6%

Net Profit (Loss) (US$ millions)

-168.8

2.7

n/m

-118.1

43.0%

-598.6

247.0

-342.3%

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

-85.2

92.1

n/m

-121.6

-30.0%

-259.5

336.3

-177.2%

Basic EPS (US$)

-3.97

0.06

n/m

-2.78

43.0%

-14.08

5.81

-342.2%

Adjusted Basic EPS (US$) (1)

-2.00

2.17

n/m

-2.86

-30.0%

-6.11

7.92

-177.1%

Shares for calculation of Basic EPS (000s) 

42,511

42,487

0.1%

42,510

0.0%

42,508

42,483

0.1%

(1)  Excludes Special Items.  This earnings release includes a reconciliation of non-IFRS financial measures to the comparable IFRS measures.

(2)  Average Aircraft Utilization is calculated based on the Company's active fleet, excluding aircraft in storage as well as those classified as assets held for sale.

FULL 4Q20 EARNINGS RELEASE AVAILABLE FOR DOWNLOAD AT:
https://copa.gcs-web.com/financial-information/quarterly-results

4Q20 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST

Date:

Feb 11, 2021

Time:

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

Conference telephone number: 

877-293-5456 (US Domestic Callers)


707-287-9357 (International Callers)

Webcast:

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 80 destinations in 33 countries in North, Central and South America and the Caribbean. For more information visit: www.copa.com. 

CONTACT: Copa Holdings S.A.
Investor Relations:
Ph: 011 507 304-2774
www.copa.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 a number of 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


%


Unaudited


Audited


%



4Q20


4Q19


Change


3Q20


Change


2020


2019


Change

Operating Revenues

















Passenger revenue


147,535


657,940


-77.6%


27,619


434.2%


760,594


2,612,605


-70.9%

Cargo and mail revenue


7,243


16,033


-54.8%


596


1114.3%


21,002


62,460


-66.4%

Other operating revenue


3,858


7,955


-51.5%


4,167


-7.4%


19,407


32,343


-40.0%

Total Operating Revenue


158,636


681,927


-76.7%


32,382


389.9%


801,003


2,707,409


-70.4%


















Operating Expenses

















Fuel


28,346


171,314


-83.5%


1,287


2102.7%


166,723


696,249


-76.1%

Wages, salaries, benefits and other employees' expenses


63,599


115,036


-44.7%


44,241


43.8%


256,327


450,438


-43.1%

Passenger servicing


4,180


24,798


-83.1%


1,095


281.9%


27,567


102,103


-73.0%

Airport facilities and handling charges


16,914


44,877


-62.3%


1,752


865.2%


59,536


181,959


-67.3%

Sales and distribution


18,646


53,222


-65.0%


5,985


211.6%


70,395


210,623


-66.6%

Maintenance, materials and repairs


33,221


37,648


-11.8%


9,079


265.9%


76,948


127,562


-39.7%

Depreciation and amortization


67,850


159,812


-57.5%


63,022


7.7%


502,433


371,424


35.3%

Flight operations


5,925


24,908


-76.2%


454


1206.5%


30,028


102,806


-70.8%

Other operating and administrative expenses


15,011


32,506


-53.8%


12,435


20.7%


71,977


118,072


-39.0%

Total Operating Expense


253,693


664,123


-61.8%


139,349


82.1%


1,261,934


2,361,238


-46.6%


















Operating Profit (Loss)


(95,057)


17,804


n/m


(106,966)


n/m


(460,931)


346,171


-233.2%


















Non-operating Income (Expense):

















Finance cost


(18,360)


(17,154)


7.0%


(16,264)


12.9%


(73,045)


(57,450)


27.1%

Finance income


3,571


6,289


-43.2%


4,394


-18.7%


19,963


24,405


-18.2%

Net change in fair value of derivatives


(80,076)


2,406


n/m


3,591


n/m


(8,459)


(15,408)


-45.1%

Gain (loss) on foreign currency fluctuations


2,361


-


n/m


(370)


n/m


(98,683)


-


n/m

Other non-operating income (expense)


1,026


(989)


n/m


(2,631)


n/m


(1,169)


(4,279)


-72.7%

Total Non-Operating Income/(Expense)


(91,478)


(9,448)


868.2%


(11,278)


711.1%


(161,392)


(52,732)


206.1%


















Profit (Loss) before taxes


(186,535)


8,356


n/m


(118,245)


n/m


(622,323)


293,439


-312.1%


















Income tax expense


(17,731)


5,629


n/m


(188)


n/m


(23,717)


46,437


-151.1%


















Net Profit (Loss)


(168,805)


2,728


n/m


(118,057)


n/m


(598,606)


247,002


-342.3%


















EPS

















Basic


-3.97


0.06


n/m


-2.78


n/m


-14.08


5.81


n/m


















Shares used for calculation:

















Basic


42,510,573


42,486,717




42,509,959




42,508,448


42,483,048





































 

Copa Holdings, S. A. and subsidiaries 



Consolidated statement of financial position 



(US$ Thousands)

December

December


2020

2019


 (Unaudited) 

 (Audited) 

 ASSETS 



 Current Assets 



Cash and cash equivalents

119,065

158,733

Short-term investments

770,816

692,403

Total cash, cash equivalents and short-term investments

889,881

851,136




Accounts receivable, net

63,206

129,634

Accounts receivable from related parties

1,429

147

Expendable parts and supplies, net

74,319

69,100

Prepaid expenses

30,473

49,034

Prepaid income tax

16,716

1,181

Other current assets

7,805

14,206


193,948

263,301

Assets held for sale 

135,542

120,006




TOTAL CURRENT ASSETS

1,219,371

1,234,442




Long-term investments

119,617

134,347

Long-term accounts receivable

1,054

2,139

Long-term prepaid expenses

6,066

17,743

Property and equipment, net

2,147,486

2,532,402

Right of use assets

214,279

290,843

Intangible, net

95,568

108,116

Net employee defined benefit assets

-

249

Deferred tax assets

35,595

19,216

Other Non-Current Assets

14,348

17,881

TOTAL NON-CURRENT ASSETS

2,634,013

3,122,935




TOTAL ASSETS

3,853,384

4,357,377




 LIABILITIES 



Loans and borrowings

127,946

122,581

Current portion of lease liability

83,605

97,732

Accounts payable

63,461

119,332

Accounts payable to related parties

2,970

14,086

Air traffic liability

470,695

497,374

Frequent flyer deferred revenue

91,213

80,325

Taxes Payable

13,400

46,267

Employee benefits obligations

33,995

55,373

Income tax payable

1,023

9,683

Other Current Liabilities

252

83

TOTAL CURRENT LIABILITIES

888,561

1,042,836




Loans and borrowings long-term

1,035,954

938,182

Lease Liability

146,905

206,832

Derivative financial instruments

237,104

-

Net employee defined benefit liabilities

14,332

-

Other long - term liabilities

216,325

191,221

Deferred tax Liabilities

22,190

43,397

TOTAL NON-CURRENT LIABILITIES

1,672,810

1,379,633




TOTAL LIABILITIES

2,561,371

2,422,469




 EQUITY 



 Issued Capital 



Class A -33,861,872 issued and 31,421,265  outstanding

21,199

21,142

Class B common stock - 10,938,125

7,466

7,466

Additional Paid-In Capital

91,341

86,135

Treasury Stock

(136,388)

(136,388)

Retained Earnings

1,931,084

1,718,179

Net profit 

(598,606)

247,002

Other comprehensive loss

(24,082)

(8,628)




TOTAL EQUITY

1,292,014

1,934,908




TOTAL EQUITY & LIABILITIES

3,853,384

4,357,377







 

Copa Holdings, S. A. and subsidiaries 







Consolidated Statement of Cash Flows







For the twelve months ended December 31







(In US$ thousands)



















2020


2019


2018











(Unaudited)


(Audited)


(Audited)

Cash flow (used in) from operating activities 


(39,515)


740,776


497,153

Cash flow used in investing activities 


(93,761)


(192,868)


(149,596)

Cash flow from (used in) financing activities 


93,609


(545,334)


(430,191)

Net (decrease) increase in cash and cash equivalents 


(39,667)


2,574


(82,634)

Cash and cash equivalents at January 1


158,732


156,158


238,792

Cash and cash equivalents at December 31


$               119,065


$               158,732


$               156,158
















Short-term investments 



770,816


692,403


566,200

Long-term investments 



119,617


134,347


138,846

Total cash and cash equivalents and investments at December 31


$            1,009,498


$               985,482


$               861,204
















Copa Holdings, S.A.

NON-IFRS FINANCIAL MEASURE RECONCILIATION

This press release includes the following non-IFRS financial measures: Adjusted Operating Profit, Adjusted Net Profit, Adjusted Basic EPS and Monthly Cash Consumption. 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 Operating Profit











and Adjusted Net Profit


4Q20


4Q19


3Q20


FY20


FY19












Operating Profit as Reported


$         (95,057)


$          17,804


$      (106,966)


$       (460,931)


$        346,171

   Add: Fleet Impairment charges


$            4,400


$          89,344




$        191,207


$          89,344

   Add: Expected loss (gain) on Embraer assets held for sale


$              (877)






$          49,171



Adjusted Operating Profit


$         (91,533)


$        107,148


$      (106,966)


$       (220,552)


$        435,515












Net Profit as Reported


$       (168,805)


$            2,728


$      (118,057)


$       (598,606)


$        247,002

   Add: Fleet Impairment charges


$            4,400


$          89,344




$        191,207


$          89,344

   Add: Expected loss (gain) on Embraer assets held for sale


$              (877)






$          49,171



Add: Net change in fair value of derivatives


$          80,076




$          (3,591)


$          98,683



Adjusted Net Profit


$         (85,205)


$          92,071


$      (121,648)


$       (259,545)


$        336,346












Reconciliation of Adjusted Basic EPS


4Q20


4Q19


3Q20


FY20


FY19












Adjusted Net Profit


$        (85,205)


$          92,071


$      (121,648)


$      (259,545)


$        336,346

Shares used for calculation of Basic EPS


42,511


42,487


42,510


42,508


42,483

Adjusted Basic Earnings per share (Adjusted Basic EPS)


$            (2.00)


$              2.17


$            (2.86)


$            (6.11)


$              7.92












Reconciliation of Monthly Cash Consumption for 2020


4Q20


3Q20


2Q20





Beginning Cash balance


$            1,006


$            1,143


$            1,127





Ending Cash balance


$            1,009


$            1,006


$            1,143





Net cashflows in the quarter


$                   4


$              (137)


$                 16





   Substract: Proceeds from Convertible Notes Offering


$                    -


$                    -


$               343





   Substract: Others proceeds (assets sold and other non-op proceeds)


$                 23


$                 22







   Add: Repayment of short term credit lines


$                    -


$                 50


$                 95





Cash Consumption excluding extraordinary activities


$                (19)


$              (109)


$             (232)





Monthly Cash Consumption excluding extraordinary  activities


$                  (6)


$                (36)


$               (77)
















 

Cision View original content:http://www.prnewswire.com/news-releases/copa-holdings-reports-financial-results-for-the-fourth-quarter-of-2020-301226312.html

SOURCE Copa Holdings, S.A.

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