Copa Holdings Reports Financial Results for the Second Quarter of 2021

Aug 04, 2021

PANAMA CITY, Aug. 4, 2021 /PRNewswire/ -- Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the second quarter of 2021 (2Q21). 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 second quarter of 2019 (2Q19) (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$28.1 million for the quarter or US$0.66 per share.  Excluding special items, the Company would have reported a net loss of US$16.2 million or US$0.38 per share.  Special items include a US$33.9 million unrealized mark-to-market gain related to the Company's convertible notes and a passenger revenue adjustment of US$10.4 million related to 2019 and 2020 sales.
  • Copa Holdings reported an operating profit of US$8.7 million for the quarter. Excluding the US$10.4 million passenger revenue adjustment, the company would have reported an operating loss of US$1.7 million.
  • Cash accretion, defined as cash proceeds minus disbursements, excluding extraordinary financing activities and asset sales but including capital expenditures and payment of financial obligations, averaged approximately US$21 million per month during the quarter. 
  • The Company ended the quarter with US$1.6 billion of available liquidity, consisting of approximately US$1.3 billion in cash, short-term and long-term investments, and US$345 million of committed and undrawn credit facilities.
  • The Company closed the quarter with total debt, including lease liabilities, of US$1.6 billion.
  • The Company's flight operations, measured in terms of available seat miles (ASMs), represented approximately 48% of the capacity flown in the same period in 2019.
  • During the quarter, 3 Embraer 190 aircraft exited the fleet as part of a previously agreed sale to a third party. As of June 30, 2021, there was one remaining Embraer 190 aircraft pending to be delivered to the buyer.
  • Excluding the aircraft classified as assets held for sale, and including aircraft in temporary storage, Copa Holdings ended the quarter with a consolidated fleet of 81 aircraft – 68 Boeing 737-800s and 13 Boeing 737 MAX 9s, compared to a total fleet of 102 aircraft at the end of the first quarter of 2020.
  • During the quarter, Copa Airlines had an on-time performance of 92.1% and a flight completion factor of 99.5%, once again positioning itself amongst the best in the industry.

Subsequent Events

  • In July, Copa Airlines' last remaining Embraer 190 aircraft was delivered to its new owner.  
  • The Company entered into an agreement for the sale of 6 737-700s and has now decided to keep the remaining 6 737-700s.

 

Consolidated Financial
& Operating Highlights

2Q21

2Q19 (3)

Variance vs. 2Q19

1Q21

Variance vs. 1Q21

Revenue Passengers Carried (000s)

1,175

2,550

-53.9%

924

27.2%

RPMs (millions) 

2,268

5,249

-56.8%

1,716

32.1%

ASMs (millions) 

2,949

6,166

-52.2%

2,481

18.9%

Load Factor 

76.9%

85.1%

-8.2 p.p.

69.2%

7.7 p.p.

Yield (US$ Cents) 

12.4

11.8

4.9%

10.1

23.0%

PRASM (US$ Cents) 

9.5

10.1

-5.2%

7.0

36.7%

RASM (US$ Cents) 

10.3

10.5

-1.4%

7.5

37.8%

CASM (US$ Cents) 

10.0

9.1

9.8%

10.6

-5.4%

CASM Excl. Fuel (US$ Cents) 

7.6

6.2

22.3%

8.5

-10.4%

Fuel Gallons Consumed (millions) 

35.3

79.31

-55.5%

29.1

21.4%

Avg. Price Per Fuel Gallon (US$)

1.98

2.22

-10.9%

1.75

13.0%

Average Length of Haul (miles)

1,930

2,058

-6.2%

1,858

3.9%

Average Stage Length (miles)

1,194

1,279

-6.7%

1,256

-5.0%

Departures

15,366

32,676

-53.0%

12,372

24.2%

Block Hours

46,426

106,425

-56.4%

38,851

19.5%

Average Aircraft Utilization (hours) (2)

8.0

11.2

-29.1%

6.6

21.3%

Operating Revenues (US$ millions) 

304.3

645.1

-52.8%

185.7

63.9%

Operating Profit (Loss) (US$ millions)

8.7

82.6

-89.4%

(77.1)

-111.3%

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

(1.7)

82.6

-102.0%

(77.1)

-97.8%

Operating Margin 

2.9%

12.8%

-9.9 p.p.

-41.5%

44.4 p.p.

Adjusted Operating Margin (1)

-0.6%

12.8%

-13.4 p.p.

-41.5%

40.9 p.p.

Net Profit (Loss) (US$ millions)

28.1

50.9

-44.8%

(110.7)

-125.4%

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

(16.2)

50.9

-131.9%

(95.1)

-82.9%

Basic EPS (US$)

0.66

1.20

-45.0%

(2.60)

-125.3%

Adjusted Basic EPS (US$) (1)

(0.38)

1.20

-131.8%

(2.23)

-83.0%

Shares  for calculation of Basic EPS (000s) 

42,651

42,478

0.4%

42,571

0.2%

 

(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 2Q21 EARNINGS RELEASE AVAILABLE FOR DOWNLOAD AT:

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

2Q21 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST

 

Date:

August 5, 2021



Time:

11:00 AM US ET (10:00 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.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


Audited


%


Audited


%



2Q21


2Q19


Change


1Q21


Change

Operating Revenues











Passenger revenue


281,258


620,538


-54.7%


173,095


62.5%

Cargo and mail revenue


16,689


16,464


1.4%


7,956


109.8%

Other operating revenue


6,311


8,100


-22.1%


4,626


36.4%

Total Operating Revenue


304,259


645,102


-52.8%


185,677


63.9%












Operating Expenses











Fuel


70,156


177,169


-60.4%


51,308


36.7%

Wages, salaries, benefits and other employees' expenses


55,071


108,342


-49.2%


54,575


0.9%

Passenger servicing


7,502


25,530


-70.6%


5,586


34.3%

Airport facilities and handling charges


27,021


44,698


-39.5%


22,044


22.6%

Sales and distribution


28,441


51,289


-44.5%


21,652


31.4%

Maintenance, materials and repairs


17,773


31,235


-43.1%


19,727


-9.9%

Depreciation and amortization


59,526


70,549


-15.6%


59,450


0.1%

Flight operations


10,891


25,450


-57.2%


9,410


15.7%

Other operating and administrative expenses


19,140


28,240


-32.2%


19,006


0.7%

Total Operating Expense


295,523


562,502


-47.5%


262,759


12.5%












Operating Profit (Loss)


8,736


82,601


-89.4%


(77,081)


-111.3%












Non-operating Income (Expense):











Finance cost


(18,625)


(13,573)


37.2%


(17,818)


4.5%

Finance income


2,745


6,041


-54.6%


2,853


-3.8%

Gain (loss) on foreign currency fluctuations


764


(2,213)


-134.5%


(1,809)


-142.2%

Net change in fair value of derivatives


33,898


-


n/m


(15,663)


-316.4%

Other non-operating income (expense)


417


(2,115)


-119.7%


(976)


-142.7%

Total Non-Operating Income/(Expense)


19,198


(11,859)


-261.9%


(33,412)


-157.5%












Profit (Loss) before taxes


27,935


70,742


-60.5%


(110,494)


-125.3%












Income tax expense


(138)


19,876


-100.7%


239


-157.7%












Net Profit (Loss)


28,073


50,866


-44.8%


(110,733)


-125.4%












EPS











Basic


0.66


1.20


-45.0%


-2.60


-125.3%












Shares used for calculation:











Basic


42,650,595


42,478,415




42,570,983



 

Copa Holdings, S. A. and subsidiaries 



Consolidated statement of financial position 



(US$ Thousands)

June

December


2021

2020


 (Unaudited) 


 ASSETS 



 Current Assets 



Cash and cash equivalents

256,764

119,065

Short-term investments

925,680

770,816

Total cash, cash equivalents and short-term investments

1,182,444

889,881




Accounts receivable, net

103,956

63,206

Accounts receivable from related parties

1,383

1,429

Expendable parts and supplies, net

70,867

74,319

Prepaid expenses

25,444

30,473

Prepaid income tax

14,264

16,716

Other current assets

7,825

7,805


223,739

193,948

Assets held for sale 

34,157

135,542




TOTAL CURRENT ASSETS

1,440,339

1,219,371




Long-term investments

99,235

119,617

Long-term accounts receivable

1,042

1,054

Long-term prepaid expenses

6,554

6,066

Property and equipment, net

2,255,792

2,147,486

Right of use assets

178,103

214,279

Intangible, net

88,031

95,568

Deferred tax assets

37,854

35,595

Other Non-Current Assets

15,136

14,348

TOTAL NON-CURRENT ASSETS

2,681,748

2,634,013




TOTAL ASSETS

4,122,088

3,853,385




 LIABILITIES 



Loans and borrowings

153,515

127,946

Current portion of lease liability

79,573

83,605

Accounts payable

97,355

63,461

Accounts payable to related parties

4,661

2,970

Air traffic liability

538,768

470,695

Frequent flyer deferred revenue

93,036

91,213

Taxes Payable

29,587

13,400

Employee benefits obligations

13,671

33,995

Income tax payable

1,912

1,023

Other Current Liabilities

3,801

252

TOTAL CURRENT LIABILITIES

1,015,879

888,561




Loans and borrowings long-term

1,283,447

1,035,954

Lease Liability

112,003

146,905

Net employee defined benefit liabilities

12,018

14,332

Derivative financial instruments

227,325

245,560

Deferred tax Liabilities

19,534

22,190

Other long - term liabilities

247,668

216,325

TOTAL NON-CURRENT LIABILITIES

1,901,994

1,681,265




TOTAL LIABILITIES

2,917,874

2,569,825




 EQUITY 



 Issued Capital 



Class A - 33,998,981 issued and 31,545,862 outstanding

21,284

21,199

Class B common stock - 10,938,125

7,466

7,466

Additional Paid-In Capital

94,588

91,341

Treasury Stock

(136,388)

(136,388)

Retained Earnings

1,324,025

1,931,086

Net loss

(82,660)

(607,062)

Other comprehensive loss

(24,099)

(24,082)




TOTAL EQUITY

1,204,214

1,283,560




TOTAL EQUITY & LIABILITIES

4,122,088

3,853,385




 

Copa Holdings, S. A. and subsidiaries 







Consolidated Statement of Cash Flows







For the six months ended June 30







(In US$ thousands)




















2021


2020


2019











(Unaudited)


(Unaudited)


(Unaudited)

Cash flow from (used in) operating activities 


149,669


(56,632)


331,143

Cash flow used in investing activities 


(119,776)


(48,009)


(8,691)

Cash flow from (used in) financing activities 


107,806


253,205


(252,469)

Net increase in cash and cash equivalents 


137,699


148,564


69,982

Cash and cash equivalents at January 1


119,065


158,733


156,158

Cash and cash equivalents at June 30


$                    256,764


$                    307,297


$                    226,140
















Short-term investments 



925,680


740,887


523,134

Long-term investments 



99,235


94,540


144,072

Total cash and cash equivalents and investments at June 30


$                1,281,679


$                1,142,724


$                    893,346

 

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



2Q21



2Q20



1Q21



2Q19
















Operating Profit as Reported


$

8,736


$

(357,875)


$

(77,081)


$

82,601


   Add: Unredeemed Ticket Revenue provision reversal


$

(10,395)


$

12,341








   Add: Fleet Impairment loss





$

186,807








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





$

50,048








Adjusted Operating Profit


$

(1,659)


$

(108,679)


$

(77,081)


$

82,601
















Net Profit as Reported


$

28,073


$

(386,018)


$

(110,733)


$

50,866


   Add: Unredeemed Ticket Revenue provision reversal


$

(10,395)


$

12,341








   Add: Fleet Impairment loss





$

186,807








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





$

50,048








Add: Net change in fair value of derivatives


$

(33,898)


$

22,198


$

15,663





Adjusted Net Profit


$

(16,220)


$

(114,624)


$

(95,070)


$

50,866
















Reconciliation of Adjusted Basic EPS



2Q21



2Q20



1Q21



2Q19
















Adjusted Net Profit


$

(16,220)


$

(114,624)


$

(95,070)


$

50,866


Shares used for calculation of Basic EPS



42,651



42,512



42,571



42,478


Adjusted Basic Earnings per share (Adjusted Basic EPS)


$

(0.38)


$

(2.70)


$

(2.23)


$

1.20
















Reconciliation of Monthly Cash Accretion (Consumption) for 2020 and 2021



2Q21



1Q21



4Q20



3Q20


Beginning Cash balance


$

1,203


$

1,009


$

1,006


$

1,143


Ending Cash balance


$

1,282


$

1,203


$

1,009


$

1,006


Net cashflows in the quarter


$

79


$

194


$

4


$

(137)


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


$

(21)


$

241


$

-


$

-


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


$

36


$

20


$

23


$

22


   Add: Repayment of short term credit lines


$

-


$

-


$

-


$

50


Cash Consumption excluding extraordinary activities


$

64


$

(68)


$

(19)


$

(109)


Monthly Cash Accretion (Consumption) excluding extraordinary  activities


$

21


$

(23)


$

(6)


$

(36)


 

Cision View original content:https://www.prnewswire.com/news-releases/copa-holdings-reports-financial-results-for-the-second-quarter-of-2021-301348782.html

SOURCE Copa Holdings, S.A.

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