Copa Holdings Reports Financial Results for the Third Quarter of 2021

Nov 17, 2021

PANAMA CITY, Panama, Nov. 17, 2021 /PRNewswire/ -- Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the third quarter of 2021 (3Q21). 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 third quarter of 2019 (3Q19) (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$8.2 million for the quarter or US$0.19 per share. Excluding special items, the Company would have reported a net profit of US$29.9 million or US$0.70 per share.  Special items include a US$32.1 million unrealized mark-to-market loss related to the Company's convertible notes and a passenger revenue adjustment of (US$10.4) million corresponding to unredeemed coupons from 2019 and 2020 sales.
  • Copa Holdings reported an operating profit of US$59.0 million for the quarter and an operating margin of 13.3%. Excluding the US$10.4 million passenger unredeemed coupon revenue adjustment, the Company would have reported an operating profit of US$48.6 million and an 11.2% operating margin.
  • Operating cost per available seat mile (CASM) decreased 12.4% vs. 2Q21 to 8.8 cents. While CASM, excluding fuel costs, decreased 18.6% to 6.2 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, resulted in US$54 million for 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.
  • Flight operations, measured in terms of available seat miles (ASMs), represented 68.9% of the capacity flown over the same period in 2019.
  • During the quarter, the Company announced three new destinations starting December 2021Atlanta in the U.S. and Armenia and Cucuta in Colombia.
  • During the quarter, the Company exited the last Embraer 190 in its fleet and delivered two Boeing 737-700s to their new owner.
  • 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 87 aircraft – 68 Boeing 737-800s, 13 Boeing 737 MAX 9s, and 6 Boeing 737-700s, compared to a fleet of 102 aircraft the Company operated prior to the COVID-19 pandemic.
  • The Company agreed with Boeing to accelerate the delivery of 12 Boeing 737 MAX 9s from its current order, two in 2022 and the other ten between 2023 and 2025.
  • Copa Airlines had an on-time performance for the quarter of 89.4% and a flight completion factor of 99.84%, once again positioning itself amongst the best in the industry.

Consolidated Financial
& Operating Highlights

3Q21

3Q19 (3)

Variance
vs. 3Q19

2Q21

Variance
vs. 2Q21

Revenue Passengers Carried (000s)

1,823

2,703

-32.6%

1,175

55.1%

RPMs (millions) 

3,485

5,466

-36.2%

2,268

53.7%

ASMs (millions) 

4,396

6,383

-31.1%

2,949

49.1%

Load Factor 

79.3%

85.6%

-6.4 p.p.

76.9%

2.4 p.p.

Yield (US$ Cents) 

12.0

12.5

-4.5%

12.4

-3.4%

PRASM (US$ Cents) 

9.5

10.7

-11.5%

9.5

-0.4%

RASM (US$ Cents) 

10.1

11.1

-8.8%

10.3

-1.9%

CASM (US$ Cents) 

8.8

9.0

-2.6%

10.0

-12.4%

CASM Excl. Fuel (US$ Cents) 

6.2

6.2

-0.2%

7.6

-18.6%

Fuel Gallons Consumed (millions) 

52.0

82.0

-36.5%

35.3

47.4%

Avg. Price Per Fuel Gallon (US$)

2.13

2.16

-1.0%

1.98

7.7%

Average Length of Haul (miles)

1,912

2,022

-5.4%

1,930

-0.9%

Average Stage Length (miles)

1,213

1,295

-6.3%

1,194

1.6%

Departures

22,559

33,373

-32.4%

15,366

46.8%

Block Hours

69,308

109,614

-36.8%

46,426

49.3%

Average Aircraft Utilization (Hours) (2)

10.7

11.5

-7.2%

8.0

33.7%

Operating Revenues (US$ millions) 

445.0

708.2

-37.2%

304.3

46.3%

Operating Profit (Loss) (US$ millions)

59.0

132.9

-55.6%

8.7

575.5%

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

48.6

132.9

-63.4%

(1.7)

-3031.1%

Operating Margin 

13.3%

18.8%

-5.5 p.p.

2.9%

10.4 p.p.

Adjusted Operating Margin (1)

11.2%

18.8%

-7.6 p.p.

-0.6%

11.8 p.p.

Net Profit (Loss) (US$ millions)

8.2

104.0

-92.1%

28.1

-70.6%

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

29.9

104.0

-71.2%

(16.2)

-284.6%

Basic EPS (US$)

0.19

2.45

-92.1%

0.66

-70.6%

Adjusted Basic EPS (US$) (1)

0.70

2.45

-71.3%

(0.38)

-284.6%

Shares  for calculation of Basic EPS (000s) 

42,649

42,487

0.4%

42,651

0.0%







(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 3Q21 EARNINGS RELEASE AVAILABLE FOR DOWNLOAD AT:
https://copa.gcs-web.com/financial-information/quarterly-results

3Q21 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST

 

Date:

November 18, 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 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


%



3Q21


3Q19


Change


2Q21


Change

Operating Revenues











Passenger revenue


417,466


685,337


-39.1%


281,258


48.4%

Cargo and mail revenue


21,082


14,647


43.9%


16,689


26.3%

Other operating revenue


6,451


8,226


-21.6%


6,311


2.2%

Total Operating Revenue


444,999


708,210


-37.2%


304,259


46.3%












Operating Expenses











Fuel


112,658


177,603


-36.6%


70,156


60.6%

Wages, salaries, benefits and other employees' expenses


68,049


113,398


-40.0%


55,071


23.6%

Passenger servicing


10,576


26,204


-59.6%


7,502


41.0%

Airport facilities and handling charges


39,407


47,022


-16.2%


27,021


45.8%

Sales and distribution


36,077


52,980


-31.9%


28,441


26.8%

Maintenance, materials and repairs


24,008


30,632


-21.6%


17,773


35.1%

Depreciation and amortization


55,702


72,876


-23.6%


59,526


-6.4%

Flight operations


16,291


26,572


-38.7%


10,891


49.6%

Other operating and administrative expenses


23,222


28,047


-17.2%


19,140


21.3%

Total Operating Expense


385,989


575,334


-32.9%


295,523


30.6%












Operating Profit (Loss)


59,010


132,876


-55.6%


8,736


575.5%












Non-operating Income (Expense):











Finance cost


(18,615)


(12,696)


46.6%


(18,625)


-0.1%

Finance income


2,679


6,121


-56.2%


2,745


-2.4%

Gain (loss) on foreign currency fluctuations


(2,620)


(9,641)


-72.8%


764


-443.1%

Net change in fair value of derivatives


(32,092)


-


n/m


33,898


-194.7%

Other non-operating income (expense)


(1,573)


(350)


349.1%


417


-477.6%

Total Non-Operating Income/(Expense)


(52,220)


(16,567)


215.2%


19,198


-372.0%












Profit (Loss) before taxes


6,790


116,309


-94.2%


27,935


-75.7%












Income tax expense


1,453


(12,332)


-111.8%


138


953.0%












Net Profit (Loss)


8,242


103,978


-92.1%


28,073


-70.6%












EPS











Basic


0.19


2.45


-92.1%


0.66


-70.6%












Shares used for calculation:











Basic


42,649,175


42,509,959




42,650,595



 

Copa Holdings, S. A. and subsidiaries 



Consolidated statement of financial position 



(US$ Thousands)




 September 2021 

 December 2020  

 ASSETS 

 (Unaudited)  

(Audited)

 Current Assets 



Cash and cash equivalents

290,231

119,065

Short-term investments

901,645

770,816

Total cash, cash equivalents and short-term investments

1,191,876

889,881




Accounts receivable, net

110,035

63,206

Accounts receivable from related parties

1,562

1,429

Expendable parts and supplies, net

71,419

74,319

Prepaid expenses

25,650

30,473

Prepaid income tax

632

16,716

Other current assets

7,216

7,805


216,514

193,948

Asset held for sale

22,243

135,542

TOTAL CURRENT ASSETS

1,430,633

1,219,371




Long-term investments

96,955

119,617

Long-term accounts receivable

12

1,054

Long-term prepaid expenses

22,688

6,066

Property and equipment, net

2,306,626

2,147,486

Right of use assets

183,354

214,279

Intangible, net

84,530

95,568

Deferred tax assets

36,432

35,595

Other Non-Current Assets

14,788

14,348

TOTAL NON-CURRENT ASSETS

2,745,385

2,634,013




TOTAL ASSETS

4,176,018

3,853,385




LIABILITIES



Loans and borrowings

154,140

127,946

Current portion of lease liability

74,526

83,605

Accounts payable

101,201

63,461

Accounts payable to related parties

10,088

2,970

Air traffic liability

553,252

470,695

Frequent flyer deferred revenue

94,748

91,213

Taxes Payable

34,200

13,400

Employee benefits obligations

16,710

33,995

Income tax payable

2,473

1,023

Other Current Liabilities

2,606

252

TOTAL CURRENT LIABILITIES

1,043,943

888,560




Loans and borrowings long-term

1,253,536

1,035,954

Lease Liability

122,692

146,905

Net Defined Benefit Liability

12,343

14,332

Derivative financial instruments

259,417

245,560

Deferred tax Liabilities

18,104

22,190

Other long - term liabilities

251,741

216,325




TOTAL NON-CURRENT LIABILITIES

1,917,832

1,681,265

TOTAL LIABILITIES

2,961,775

2,569,824




EQUITY



Issued Capital



Class A - 33,998,654  issued and 31,552,671  outstanding

21,290

21,199

Class B - 10,938,125 

7,466

7,466

Additional Paid-In Capital

96,463

91,341

Treasury Stock

(136,483)

(136,388)

Retained Earnings

1,324,025

1,931,086

Net profit (loss)

(74,418)

(607,062)

Other comprehensive income (loss)

(24,099)

(24,082)




TOTAL EQUITY

1,214,243

1,283,561

TOTAL EQUITY LIABILITIES

4,176,018

3,853,385




Copa Holdings, S. A. and subsidiaries 







Consolidated Statement of Cash Flows







For the nine months ended September 30







(In US$ thousands)

















2021


2020


2019










(Unaudited)


(Unaudited)


(Unaudited)

Cash flow from (used in) operating activities 


263,252


(75,298)


548,947

Cash flow used in investing activities 


(140,844)


(2,333)


(32,863)

Cash flow from (used in) financing activities 


48,758


141,162


(446,953)

Net increase in cash and cash equivalents 


171,166


63,531


69,131

Cash and cash equivalents at January 1


119,065


158,732


156,158

Cash and cash equivalents at September 30


$               290,231


$               222,263


$               225,289















Short-term investments 


901,645


644,137


536,084

Long-term investments 


96,956


139,503


124,169

Total cash and cash equivalents and investments at September 30

$            1,288,832


$            1,005,903


$               885,542















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


3Q21


3Q20


2Q21


3Q19










Operating Profit as Reported


$          59,010


$      (106,966)


$            8,736


$        132,876

   Subtract: Unredeemed Ticket Revenue provision reversal


$          10,395




$          10,395



Adjusted Operating Profit


$          48,615


$      (106,966)


$          (1,659)


$        132,876










Net Profit as Reported


$            8,242


$      (118,057)


$          28,073


$        103,978

   Subtract: Unredeemed Ticket Revenue provision reversal


$          10,395




$          10,395



   Add: Net change in fair value of derivatives


$          32,092


$          (3,591)


$        (33,898)



Adjusted Net Profit


$          29,939


$      (121,648)


$        (16,220)


$        103,978










Reconciliation of Adjusted Basic EPS


3Q21


3Q20


2Q21


3Q19










Adjusted Net Profit


$          29,939


$      (121,648)


$        (16,220)


$        103,978

Shares used for calculation of Basic EPS


42,649


42,510


42,651


42,487

Adjusted Basic Earnings per share (Adjusted Basic EPS)


$              0.70


$            (2.86)


$            (0.38)


$              2.45










Reconciliation of Adjusted Operating Costs per ASM









Excluding Fuel (Adjusted CASM Excl. Fuel)


3Q21




2Q21


3Q19










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


8.8




10.1


9.0

Aircraft fuel per ASM  (in US$ Cents)


(2.6)




(2.5)


(2.8)

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


6.2




7.6


6.2










Reconciliation of Monthly Cash Buildup (Burn) for 2020 and 2021


3Q21


2Q21


1Q21


4Q20

Beginning Cash balance


$            1,282


$            1,203


$            1,009


$            1,006

Ending Cash balance


$            1,289


$            1,282


$            1,203


$            1,009

Net cashflows in the quarter


$                   7


$                 79


$               194


$                   4

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


$               (57)


$               (21)


$               241


$                 -

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


$                 11


$                 36


$                 20


$                 23

Cash Buildup (Burn) excluding extraordinary activities


$                 54


$                 64


$               (68)


$               (19)










Cision View original content:https://www.prnewswire.com/news-releases/copa-holdings-reports-financial-results-for-the-third-quarter-of-2021-301427178.html

SOURCE Copa Holdings, S.A.

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