Copa Holdings Reports Financial Results for the Third Quarter of 2021
OPERATING AND FINANCIAL HIGHLIGHTS
Copa Holdings reported a net profit ofUS$8.2 million for the quarter orUS$0.19 per share. Excluding special items, the Company would have reported a net profit ofUS$29.9 million orUS$0.70 per share. Special items include aUS$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 ofUS$59.0 million for the quarter and an operating margin of 13.3%. Excluding theUS$10.4 million passenger unredeemed coupon revenue adjustment, the Company would have reported an operating profit ofUS$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% to6.2 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 approximatelyUS$1.3 billion in cash, short-term and long-term investments, andUS$345 million of committed and undrawn credit facilities. - The Company closed the quarter with total debt, including lease liabilities, of
US$1.6 billion . - Flight operations, measured in terms of available seat miles (ASMs), represented 68.9% of the capacity flown over the same period in 2019.
- During the quarter, the Company announced three new destinations starting
December 2021 —Atlanta in theU.S. andArmenia and Cucuta inColombia . - During the quarter, the Company exited the last Embraer 190 in its fleet and delivered two Boeing 737-700s to their new owner.
- Excluding the aircraft classified as assets held for sale, and including aircraft in temporary storage,
Copa Holdings ended the quarter with a consolidated fleet of 87 aircraft – 68 Boeing 737-800s, 13 Boeing 737 MAX 9s, and 6 Boeing 737-700s, compared to a fleet of 102 aircraft the Company operated prior to the COVID-19 pandemic. - The Company agreed with Boeing to accelerate the delivery of 12 Boeing 737 MAX 9s from its current order, two in 2022 and the other ten between 2023 and 2025.
Copa Airlines had an on-time performance for the quarter of 89.4% and a flight completion factor of 99.84%, once again positioning itself amongst the best in the industry.
Consolidated Financial |
3Q21 |
3Q19 (3) |
Variance |
2Q21 |
Variance |
Revenue Passengers Carried (000s) |
1,823 |
2,703 |
-32.6% |
1,175 |
55.1% |
RPMs (millions) |
3,485 |
5,466 |
-36.2% |
2,268 |
53.7% |
ASMs (millions) |
4,396 |
6,383 |
-31.1% |
2,949 |
49.1% |
Load Factor |
79.3% |
85.6% |
-6.4 p.p. |
76.9% |
2.4 p.p. |
Yield (US$ 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$) |
2.13 |
2.16 |
-1.0% |
1.98 |
7.7% |
Average Length of Haul (miles) |
1,912 |
2,022 |
-5.4% |
1,930 |
-0.9% |
Average Stage Length (miles) |
1,213 |
1,295 |
-6.3% |
1,194 |
1.6% |
Departures |
22,559 |
33,373 |
-32.4% |
15,366 |
46.8% |
|
69,308 |
109,614 |
-36.8% |
46,426 |
49.3% |
Average Aircraft Utilization (Hours) (2) |
10.7 |
11.5 |
-7.2% |
8.0 |
33.7% |
Operating Revenues (US$ 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. |
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: |
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Time: |
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Conference telephone number: |
877-293-5456 (US Domestic Callers) |
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707-287-9357 (International Callers) |
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Webcast: |
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About
CONTACT:
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
CPA-G
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Income Statement - IFRS |
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(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 |
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Consolidated statement of financial position |
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(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 |
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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 |
||
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Class A - 33,998,654 issued and 31,552,671 outstanding |
21,290 |
21,199 |
Class B - 10,938,125 |
7,466 |
7,466 |
|
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 |
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Consolidated Statement of Cash Flows |
|||||||||||||
For the nine months ended |
|||||||||||||
(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 |
119,065 |
158,732 |
156,158 |
||||||||||
Cash and cash equivalents at |
$ 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 |
$ 1,288,832 |
$ 1,005,903 |
$ 885,542 |
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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) |
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