Copa Holdings Reports Financial Results for the Fourth Quarter and Full-Year 2021

Feb 09, 2022
Excluding special items, Adjusted Net Profit for full-year 2021 came in at US$2.7 million, or Adjusted EPS of US$0.06

PANAMA CITY, Panama, Feb. 9, 2022 /PRNewswire/ -- Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the fourth quarter of 2021 (4Q21) and full year 2021. 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) (which the Company believes are more relevant than year-over-year comparisons due to the significant impacts in 2020 of the COVID-19 pandemic).

OPERATING AND FINANCIAL HIGHLIGHTS

  • Copa Holdings reported a net profit of US$114.4 million for the quarter or US$2.69 per share. Excluding special items, the Company would have reported a net profit of US$84.1 million or US$1.98 per share.  Special items include an US$8.9 million unrealized mark-to-market loss related to the Company's convertible notes and a reversal of US$39.2 million in the Company's provision related to the return of leased aircraft.
  • Copa Holdings reported an operating profit of US$155.0 million for the quarter. Excluding the US$39.2 million reversal, the Company would have reported an operating profit of US$115.8 million and a 20.1% operating margin.
  • For full-year 2021, the Company reported a net profit of US$39.9 million or US$0.94 per share. Excluding special items, which included a reversal of US$39.2 million in the Company's provision related to the return of leased aircraft, a US$22.8 million unrealized mark-to-market loss related to the Company's convertible notes, and a passenger revenue adjustment of US$20.8 million corresponding to unredeemed coupons from 2019 and 2020 sales, Copa Holdings would have reported an adjusted net profit of US$2.7 million or US$0.06 per share.
  • For full-year 2021, the Company reported an operating profit of US$145.7 million. Excluding special items, the Company would have reported an operating profit of US$85.6 million and a 5.8% operating margin.
  • Capacity for 4Q21, measured in terms of available seat miles (ASMs), was 83.1% of the capacity flown in 4Q19.
  • Total revenues for 4Q21 came in at US$575.0 million, reaching 84.3% of 4Q19 revenues. Passenger revenues for 4Q21 reached 82.2% of 4Q19 levels, while 4Q21 cargo revenues were 61.2% higher than 4Q19. Passenger yield increased 1.0% to 12.7 cents and load factors decreased 1.8 percentage points to 83.5%, compared to 4Q19. Revenue per Available Seat Mile (RASM) came in at 11.3 cents, or 1.5% higher than 4Q19.  
  • Operating cost per available seat mile (CASM) in 4Q21, excluding special items (adjusted CASM) decreased 3.8% vs. 4Q19 to 9.0 cents. While adjusted CASM, excluding fuel, decreased 7.5% to 6.1 cents.
  • Cash buildup, defined as cash proceeds minus disbursements, excluding extraordinary financing activities and asset sales but including capital expenditures and payment of financial obligations, was US$84 million for the quarter.
  • The Company ended the quarter with US$1.5 billion in available liquidity, consisting of approximately US$1.2 billion in cash, short-term and long-term investments, and US$295 million in committed and undrawn credit facilities.
  • The Company closed the quarter with total debt, including lease liabilities, of US$1.6 billion.
  • During the quarter, the Company took delivery of one Boeing 737 MAX 9, completed the conversion of one Boeing 737-800 into a freighter, and decided to retain three Boeing 737-700s previously classified as assets held for sale.
  • Including 3 Boeing 737-700 aircraft currently in temporary storage and one Boeing 737-800 freighter, Copa Holdings ended the year with a consolidated fleet of 91 aircraft – 68 Boeing 737-800s, 14 Boeing 737 MAX 9s, and 9 Boeing 737-700s, compared to a fleet of 102 aircraft prior to the COVID-19 pandemic.
  • Copa Airlines had an on-time performance for the quarter of 90.0% and a flight completion factor of 99.54%, once again positioning the airline among the best in the industry.

Subsequent Events

  • In January, Copa Airlines was recognized by Cirium – for the eighth consecutive year – as the most on-time airline in Latin America in 2021. Copa Airlines' on-time performance of 91.1% for the year was the highest of any carrier in the Americas.
  • In January, the Company took delivery of one Boeing 737 MAX 9 aircraft, originally scheduled for December 2021.
  • Due to the recent surge in COVID-19 cases in Panama and Latin America, mainly driven by the Omicron variant, which impacted its crew availability, the Company canceled over 1,000 flights, reducing the 1Q22 published schedule by approximately 4%.
 

 

Consolidated Financial
& Operating Highlights

4Q21

4Q19 (3)

Variance vs. 4Q19

3Q21

Variance vs. 3Q21

FY21

FY19 (3)

Variance vs. FY19

Revenue Passengers Carried (000s)

2,214

2,633

-15.9%

1,823

21.5%

6,136

10,474

-41.4%

Revenue Passengers OnBoard (000)

3,369

3,838

-12.2%

2,852

18.1%

9,452

15,424

-38.7%

RPMs (millions) 

4,265

5,244

-18.7%

3,485

22.4%

11,734

21,303

-44.9%

ASMs (millions) 

5,109

6,149

-16.9%

4,396

16.2%

14,934

25,113

-40.5%

Load Factor 

83.5%

85.3%

-1.8 p.p.

79.3%

4.2 p.p.

78.6%

84.8%

-6.3 p.p.

Yield (US$ Cents) 

12.7

12.5

1.0%

12.0

5.8%

12.0

12.3

-1.9%

PRASM (US$ Cents) 

10.6

10.7

-1.1%

9.5

11.4%

9.5

10.4

-9.1%

RASM (US$ Cents) 

11.3

11.1

1.5%

10.1

11.2%

10.1

10.8

-6.2%

CASM (US$ Cents) 

8.2

10.8

-23.9%

8.8

-6.4%

9.1

9.4

-2.8%

Adjusted CASM (US$ Cents) (1)

9.0

9.3

-3.8%

8.8

2.4%

9.4

9.0

3.9%

CASM Excl. Fuel (US$ Cents) 

5.3

8.0

-33.8%

6.2

-14.7%

6.6

6.6

-0.9%

Adjusted CASM Excl. Fuel (US$ Cents) (1)

6.1

6.6

-7.5%

6.2

-2.4%

6.8

6.3

8.9%

Fuel Gallons Consumed (millions) 

61.0

78.9

-22.8%

52.0

17.1%

177.4

321.4

-44.8%

Avg. Price Per Fuel Gallon (US$)

2.43

2.16

12.5%

2.13

13.8%

2.14

2.16

-0.6%

Average Length of Haul (miles)

1,926

1,992

-3.3%

1,912

0.7%

1,912

2,034

-6.0%

Average Stage Length (miles)

1,254

1,279

-2.0%

1,213

3.4%

1,230

1,288

-4.5%

Departures

25,458

32,441

-21.5%

22,559

12.9%

75,755

131,819

-42.5%

Block Hours

80,710

105,620

-23.6%

69,308

16.5%

235,295

431,749

-45.5%

Average Aircraft Utilization (Hours) (2)

11.3

11.3

0.8%

10.7

6.4%

9.2

11.4

-19.7%

Operating Revenues (US$ millions) 

575.0

681.9

-15.7%

445.0

29.2%

1509.9

2707.4

-44.2%

Operating Profit (Loss) (US$ millions)

155.0

17.8

770.5%

59.0

162.6%

145.7

346.2

-57.9%

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

115.8

107.1

8.0%

48.6

138.1%

85.6

435.5

-80.3%

Operating Margin 

27.0%

2.6%

24.3 p.p.

13.3%

13.7 p.p.

9.6%

12.8%

-3.1 p.p.

Adjusted Operating Margin (1)

20.1%

15.7%

4.4 p.p.

11.2%

8.9 p.p.

5.8%

16.1%

-10.3 p.p.

Net Profit (Loss) (US$ millions)

114.4

2.7

4092.8%

8.2

1287.5%

39.9

247.0

-83.8%

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

84.1

92.1

-8.7%

29.9

180.8%

2.7

336.3

-99.2%

Basic EPS (US$)

2.69

0.06

4088.2%

0.19

1291.3%

0.94

5.81

-83.8%

Adjusted Basic EPS (US$) (1)

1.98

2.17

-8.8%

0.70

181.6%

0.06

7.92

-99.2%

Shares  for calculation of Basic EPS (000s) 

42,533

42,487

0.1%

42,649

-0.3%

42,533

42,487

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.

(3)  The Company believes that comparisons with 2019 are more relevant than year-over-year comparisons due to the significant impacts in 2020 of the COVID-19 pandemic.

 

FULL 4Q21 EARNINGS RELEASE AVAILABLE FOR DOWNLOAD AT:

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

4Q21 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST

 

Date:

February 10, 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 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

 

%

Unaudited

 

Audited

 

%

   

4Q21

 

4Q19

 

Change

3Q21

 

Change

FY21

 

FY19

 

Change

Operating Revenues

                           

Passenger revenue

 

540,571

 

657,940

 

-17.8%

417,466

 

29.5%

1,412,390

 

2,612,605

 

-45.9%

Cargo and mail revenue

 

25,849

 

16,033

 

61.2%

21,082

 

22.6%

71,577

 

62,460

 

14.6%

Other operating revenue

 

8,575

 

7,955

 

7.8%

6,451

 

32.9%

25,964

 

32,343

 

-19.7%

Total Operating Revenue

 

574,995

 

681,927

 

-15.7%

444,999

 

29.2%

1,509,930

 

2,707,409

 

-44.2%

                             

Operating Expenses

                           

Fuel

 

149,057

 

171,314

 

-13.0%

112,658

 

32.3%

383,179

 

696,249

 

-45.0%

Wages, salaries, benefits and other employees' expenses

 

80,434

 

115,036

 

-30.1%

68,049

 

18.2%

258,128

 

450,438

 

-42.7%

Passenger servicing

 

12,204

 

24,798

 

-50.8%

10,576

 

15.4%

35,869

 

102,103

 

-64.9%

Airport facilities and handling charges

 

42,863

 

44,877

 

-4.5%

39,407

 

8.8%

131,335

 

181,959

 

-27.8%

Sales and distribution

 

43,706

 

53,222

 

-17.9%

36,077

 

21.1%

129,877

 

210,623

 

-38.3%

Maintenance, materials and repairs

 

(13,317)

 

37,648

 

-135.4%

24,008

 

-155.5%

48,191

 

127,562

 

-62.2%

Depreciation and amortization

 

59,828

 

70,478

 

-15.1%

55,702

 

7.4%

234,505

 

282,080

 

-16.9%

Flight operations

 

19,173

 

24,908

 

-23.0%

16,291

 

17.7%

55,766

 

102,806

 

-45.8%

Other operating and administrative expenses

 

26,057

 

32,506

 

-19.8%

23,222

 

12.2%

87,426

 

118,090

 

-26.0%

Fleet Impairment

 

-

 

89,334

 

-100.0%

-

 

0.0%

-

 

89,344

 

-100.0%

Total Operating Expense

 

420,005

 

664,123

 

-36.8%

385,989

 

8.8%

1,364,276

 

2,361,255

 

-42.2%

                             

Operating Profit (Loss)

 

154,989

 

17,804

 

770.5%

59,010

 

162.6%

145,655

 

346,154

 

-57.9%

                             

Non-operating Income (Expense)

                           

Finance cost

 

(18,994)

 

(17,154)

 

10.7%

(18,615)

 

2.0%

(74,051)

 

(57,432)

 

28.9%

Finance income

 

2,571

 

6,289

 

-59.1%

2,679

 

-4.0%

10,849

 

24,405

 

-55.5%

Gain (loss) on foreign currency fluctuations

 

(2,508)

 

2,406

 

-204.3%

(2,620)

 

-4.3%

(6,174)

 

(15,408)

 

-59.9%

Net change in fair value of derivatives

 

(8,922)

 

-

 

-100.0%

(32,092)

 

-72.2%

(22,778)

 

-

   

Other non-operating income (expense)

 

(1,158)

 

(989)

 

17.1%

(1,573)

 

-26.4%

(3,291)

 

(4,279)

 

-23.1%

Total Non-Operating Income/(Expense)

 

(29,011)

 

(9,448)

 

207.1%

(52,220)

 

-44.4%

(95,445)

 

(52,715)

 

81.1%

                             

Profit (Loss) before taxes

 

125,978

 

8,356

 

1407.6%

6,790

 

1755.4%

50,209

 

293,439

 

-82.9%

                             

Income tax expense

 

(11,616)

 

(5,629)

 

106.4%

1,453

 

-899.7%

10,265

 

46,437

 

-77.9%

                             

Net Profit (Loss)

 

114,363

 

2,728

 

4092.8%

8,242

 

1287.5%

39,945

 

247,002

 

-83.8%

                             

EPS

                           

Basic

 

2.69

 

0.06

 

4088.2%

0.19

 

1291.3%

0.94

 

5.81

 

-83.8%

                             

Shares used for calculation:

                           

Basic

 

42,533,036

 

42,486,717

   

42,649,175

   

42,533,036

 

42,486,717

   

 

 

 

Copa Holdings, S. A. and subsidiaries 

   

Consolidated statement of financial position 

   

(US$ Thousands)

   
 

 December 2021 

 December 2020  

 ASSETS 

 (Unaudited)  

 (Audited)  

 Current Assets 

   

Cash and cash equivalents

211,081

119,065

Short-term investments

806,340

770,816

Total cash, cash equivalents and short-term investments

1,017,421

889,881

     

Accounts receivable, net

90,618

63,206

Accounts receivable from related parties

1,832

1,429

Expendable parts and supplies, net

74,778

74,319

Prepaid expenses

31,148

30,473

Prepaid income tax

882

16,716

Other current assets

6,054

7,805

 

205,312

193,948

Asset held for sale

-

135,542

TOTAL CURRENT ASSETS

1,222,733

1,219,371

     

Long-term investments

199,670

119,617

Long-term accounts receivable

(0)

1,054

Long-term prepaid expenses

22,783

6,066

Property and equipment, net

2,512,704

2,147,486

Right of use assets

166,328

214,279

Intangible, net

81,749

95,568

Deferred tax assets

28,417

35,595

Other Non-Current Assets

14,098

14,348

TOTAL NON-CURRENT ASSETS

3,025,749

2,634,013

     

TOTAL ASSETS

4,248,482

3,853,385

     

LIABILITIES

   

Loans and borrowings

196,602

127,946

Current portion of lease liability

73,917

83,605

Accounts payable

112,596

63,461

Accounts payable to related parties

7,948

2,970

Air traffic liability

557,331

470,695

Frequent flyer deferred revenue

95,114

91,213

Taxes Payable

32,599

13,400

Employee benefits obligations

32,767

33,995

Income tax payable

3,835

1,023

Other Current Liabilities

785

252

TOTAL CURRENT LIABILITIES

1,113,493

888,560

     

Loans and borrowings long-term

1,229,031

1,035,954

Lease Liability

104,734

146,905

Net Defined Benefit Liability

7,670

14,332

Derivative financial instruments

268,338

245,560

Deferred tax Liabilities

18,782

22,190

Other long - term liabilities

210,933

216,325

     

TOTAL NON-CURRENT LIABILITIES

1,839,487

1,681,265

TOTAL LIABILITIES

2,952,981

2,569,824

     

EQUITY

   

Issued Capital

   

Class A - 33,998,654  issued and 30,995,120 outstanding

21,290

21,199

Class B - 10,938,125 

7,466

7,466

Additional Paid-In Capital

98,348

91,341

Treasury Stock

(176,902)

(136,388)

Retained Earnings

1,324,025

1,931,086

Net profit (loss)

39,945

(607,062)

Other comprehensive income (loss) 

(18,670)

(24,082)

     

TOTAL EQUITY

1,295,501

1,283,561

TOTAL EQUITY LIABILITIES

4,248,482

3,853,385

     
     

 

 

Copa Holdings, S. A. and subsidiaries 

           

Consolidated Statement of Cash Flows

           

For the twelve months ended December 31

           

(In US$ thousands)

             
                 

2021

 

2020

 

2019

                 

(Unaudited)

 

(Audited)

 

(Audited)

Cash flow from (used in) operating activities 

 

462,612

 

(39,515)

 

740,776

Cash flow used in investing activities 

 

(373,040)

 

(93,761)

 

(192,868)

Cash flow from (used in) financing activities 

 

2,444

 

93,609

 

(545,334)

Net increase (decrease) in cash and cash equivalents 

 

92,016

 

(39,667)

 

2,574

Cash and cash equivalents at January 1

 

119,065

 

158,732

 

156,158

Cash and cash equivalents at December 31

 

$               211,081

 

$               119,065

 

$               158,732

                           

Short-term investments 

 

806,340

 

770,816

 

692,403

Long-term investments 

 

199,670

 

119,617

 

134,347

Total cash and cash equivalents and investments at December 31

 

$            1,217,091

 

$            1,009,498

 

$               985,482

                           
 

 

 

 

 

 

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, Operating CASM Excluding Fuel, and Cash Buildup. 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

 

4Q21

 

4Q20

 

3Q21

 

4Q19

 

FY21

 

FY19

 
                           

Operating Profit as Reported

 

$   154,989

 

$   (95,057)

 

$     59,010

 

$     17,804

 

$   145,655

 

$   346,171

 

   Subtract: Unredeemed Ticket Revenue provision reversal

         

$     10,395

     

$     20,790

     

   Subtract: Leased Aircraft Return provision

 

$     39,217

             

$     39,217

     

   Add: Fleet Impairment loss

     

$       4,400

     

$     89,344

     

$     89,344

 

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

     

$        (877)

                 

Adjusted Operating Profit

 

$   115,773

 

$   (91,533)

 

$     48,615

 

$   107,148

 

$     85,648

 

$   435,515

 
                           

Net Profit as Reported

 

$   114,363

 

$ (168,805)

 

$       8,242

 

$       2,728

 

$     39,945

 

$   247,002

 

   Subtract: Unredeemed Ticket Revenue provision reversal

         

$     10,395

     

$     20,790

     

   Subtract: Leased Aircraft Return provision

 

$     39,217

             

$     39,217

     

   Add: Fleet Impairment loss

     

$       4,400

     

$     89,344

     

$     89,344

 

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

     

$        (877)

                 

   Add: Net change in fair value of derivatives

 

$       8,922

 

$     80,076

 

$     32,092

     

$     22,779

     

Adjusted Net Profit

 

$     84,068

 

$   (85,205)

 

$     29,939

 

$     92,072

 

$       2,717

 

$   336,346

 
                           

Reconciliation of Adjusted Basic EPS

 

4Q21

 

4Q20

 

3Q21

 

4Q19

 

FY21

 

FY19

 
                           

Adjusted Net Profit

 

$     84,068

 

$   (85,205)

 

$     29,939

 

$     92,072

 

$       2,717

 

$   336,346

 

Shares used for calculation of Basic EPS

 

42,533

 

42,511

 

42,649

 

42,487

 

42,508

 

42,478

 

Adjusted Basic Earnings per share (Adjusted Basic EPS)

 

$         1.98

 

$       (2.00)

 

$         0.70

 

$         2.17

 

$         0.06

 

$         7.92

 
                           

Reconciliation of Adjusted Operating Costs per ASM

                         

Excluding Fuel (Adjusted CASM Excl. Fuel)

 

4Q21

     

3Q21

 

4Q19

 

FY21

 

FY19

 
                           

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

 

8.2

     

8.8

 

10.8

 

9.1

 

9.4

 

Return of leased aircraft provision per ASM (in US$ Cents)

 

(0.8)

     

-

 

-

 

(0.3)

 

-

 

Fleet Impairment per ASM (in US$ Cents)

 

-

     

-

 

1.5

 

-

 

0.4

 

Adjusted Operating Costs per ASM (in US$ Cents)

 

9.0

     

8.8

 

9.3

 

9.4

 

9.0

 
                           

Aircraft Fuel Cost per ASM  (in US$ Cents)

 

2.9

     

2.6

 

2.8

 

2.6

 

2.8

 

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

 

6.1

     

6.2

 

6.6

 

6.8

 

6.3

 
                           

Reconciliation of Monthly Cash Buildup (Burn) for 2021

 

4Q21

 

3Q21

 

2Q21

 

1Q21

         

Beginning Cash balance

 

$       1,289

 

$       1,282

 

$       1,203

 

$       1,009

         

Ending Cash balance

 

$       1,217

 

$       1,289

 

$       1,282

 

$       1,203

         

Net cashflows in the quarter

 

$          (72)

 

$              7

 

$            79

 

$          194

         

   Subtract: Proceeds from Lines of Credit

 

$            50

 

$             -

 

$             -

 

$             -

         

   Subtract: Net Proceeds from new Aircraft Financing minus Pre Delivery Payments

 

$        (181)

 

$          (57)

 

$          (21)

 

$          241

         

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

 

$            14

 

$            11

 

$            36

 

$            20

         

   Add: Share repurchase

 

$            39

 

$             -

 

$             -

 

$             -

         

Cash Buildup (Burn) excluding extraordinary activities

 

$            84

 

$            54

 

$            64

 

$          (68)

         
                           

 

 

 

Cision View original content:https://www.prnewswire.com/news-releases/copa-holdings-reports-financial-results-for-the-fourth-quarter-and-full-year-2021-301479053.html

SOURCE Copa Holdings, S.A.

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