Copa Holdings Reports Fourth Quarter and Full Year 2007 Results
Copa Holdings Reports Fourth Quarter and Full Year 2007 Results
Feb 21, 2008
PANAMA CITY, Feb 21, 2008 /PRNewswire-FirstCall via COMTEX News Network/ -- Copa Holdings, S.A. (NYSE: CPA), parent company of Copa Airlines and Aero Republica, today announced financial results for the fourth quarter of 2007 (4Q07) and full year 2007. The terms "Copa Holdings" or "the Company" make reference to the consolidated entity, whose operating subsidiaries are Copa Airlines and Aero Republica. The following financial and operating information, unless otherwise indicated, is presented pursuant to US GAAP. Unless otherwise stated all comparisons with prior periods refer to the fourth quarter of 2006 (4Q06).
OPERATING AND FINANCIAL HIGHLIGHTS
-- Copa Holdings reported net income of US$34.1 million for 4Q07, or
diluted earnings per share (EPS) of US$0.79, as compared to net income
of US$41.5 million or diluted EPS of US$0.96 in 4Q06. Fourth quarter
2007 results include special charges at Aero Republica totaling US$6.3
million related to the accrual of costs associated with terms
negotiated for the early termination of three MD-80 aircraft as a
result of Aero Republica's ongoing transition to a more fuel efficient
all EMBRAER-190 fleet. Excluding the impact of these special charges,
the company would have reported 4Q07 net income of $40.4 million, or
diluted EPS of $0.93.
-- Net income for full year 2007 reached a record US$160.4 million or
diluted EPS of US$3.69, compared to US$133.8 million or diluted EPS of
US$3.10 for full year 2006. Excluding special charges of US$7.3
million related to the accrual of costs associated with the early
termination of five MD-80 aircraft leases as a result of Aero
Republica's ongoing transition to a more fuel efficient all EMBRAER-190
fleet and a non-recurring pre-tax gain of US$8.0 related to insurance
proceeds in excess of aircraft book value, net income for full year
2007 would have been US$159.7 Million or diluted EPS of US$3.67.
-- Operating income for 4Q07 came in at US$43.0 million, representing an
operating margin of 15.1%, as compared to operating income for 4Q06 of
US$50.7 million. Excluding special charges of US$6.3 million,
operating income would have been US$49.3 million, which would have
represented an operating margin of 17.3% for the quarter, down from
21.3% in 4Q06. These strong results were achieved despite US$14.6
million in additional fuel costs as a result of a 23% increase in the
all-in average price per gallon of jet fuel.
-- In 4Q07, total revenues increased to US$284.6 million, representing
growth of 19.9%. Yield per passenger mile increased 9.0% to 17.5 cents
and operating revenue per available seat mile (RASM) increased 6.7% to
13.8 cents. RASM for full year 2007 came in at 13.0 cents, up 4.7%
from 12.4 cents in 2006.
-- Revenue passenger miles (RPMs) increased 10.5% from 1.38 billion in
4Q06 to 1.52 billion in 4Q07. Available seat miles (ASMs) increased
12.4% from 1.84 billion in 4Q06 to 2.07 billion in 4Q07. As a result,
average load factor decreased 1.3 percentage points to 73.8%. Load
factor for full year 2007 reached 74.0%, up from 73.1% in 2006.
-- Operating cost per available seat mile (CASM), increased 15.1% from
10.2 cents in 4Q06 to 11.7 cents in 4Q07. Excluding special charges,
CASM would have increased 12.1% from 10.2 cents in 4Q06 to 11.4 cents
in 4Q07. CASM, excluding fuel costs and special charges, would have
increased 7.1% from 7.1 cents in 4Q06 to 7.6 cents in 4Q07, primarily
as a result of the effect of Aero Republica's down gauge to an EMBRAER-
190 fleet and the strengthening of the Colombian currency.
-- CASM for full year 2007 came in at 10.6 cents, up from 10.0 cents in
2006. Excluding fuel and special charges, CASM for full year 2007
would have come in at 7.1 cents, up from 6.8 cents in 2006.
-- In the fourth quarter, Copa Airlines took delivery of two aircraft -
one EMBRAER-190 and one Boeing 737-800 - ending 2007 with a fleet of 37
aircraft with an average age of 3.7 years. During the quarter, Aero
Republica took delivery of two additional EMBRAER 190 aircraft, ending
2007 with a fleet of 13 aircraft - 7 EMBRAER 190s and 6 MD-80s. For
the full year, Copa Holdings took delivery of 14 aircraft.
-- On October 11, Copa Airlines and KLM Royal Dutch Airlines announced a
broad code share alliance, which will enable passengers of both
carriers to travel more easily between Copa's extensive Latin American
network and Europe via two of the world's most convenient hubs. KLM
will begin service from Amsterdam to Panama City in March 2008.
-- For full year 2007, Copa Airlines reported an on-time performance of
86.7% and a flight-completion factor of 99.4%, maintaining the airline
amongst the best in the industry.
Consolidated Financial &
Operating Highlights 4Q07 4Q06 % Change 3Q07 % Change
RPMs (millions) 1,524 1,379 10.5% 1,565 -2.6%
ASMs (mm) 2,066 1,838 12.4% 2,104 -1.8%
Load Factor 73.8% 75.0% -1.3p.p. 74.4% -0.6p.p.
Yield 17.5 16.0 9.0% 15.9 9.6%
PRASM (cents) 12.9 12.0 7.1% 11.8 8.7%
RASM (cents) 13.8 12.9 6.7% 12.6 9.5%
CASM (cents) 11.7 10.2 15.1% 10.4 12.9%
Adjusted CASM (cents) (1) 11.4 10.2 12.1% 10.3 10.5%
Adjusted CASM Excl. Fuel
(cents) (1) 7.6 7.1 7.1% 6.9 9.8%
Breakeven Load Factor 60.2% 57.7% 2.5p.p. 60.6% -0.4p.p.
Operating Revenues (US$ mm) 284.6 237.4 19.9% 264.6 7.5%
EBITDAR (US$ mm) (2) 72.0 70.3 2.4% 80.6 -10.7%
Adjusted EBITDAR (US$ mm) (3) 78.3 70.3 11.4% 73.6 6.4%
EBITDAR Margin (2) 25.3% 29.6% -4.3p.p. 28.6% -3.3p.p.
Adjusted EBITDAR Margin (3) 27.5% 29.6% -2.1p.p. 28.5% -1.0p.p.
Operating Income (US$ mm) 43.0 50.7 -15.1% 46.7 -7.9%
Adjusted Operating Income
(US$ mm) (1) 49.3 50.7 -2.7% 47.7 3.3%
Operating Margin 15.1% 21.3% -6.2p.p. 17.6% -2.5p.p.
Adjusted Operating Margin
(US$ mm) (1) 17.3% 21.3% -4.0p.p. 18.0% -0.7p.p.
Net Income (US$ mm) 34.1 41.5 -17.7% 46.8 -27.1%
Adjusted Net Income
(US$ mm) (3) 40.4 41.5 -2.5% 39.8 1.5%
Net Margin 12.0% 17.5% -5.5p.p. 17.6% -5.7p.p.
Adjusted Net Margin (3) 14.2% 17.5% -3.3p.p. 15.0% -0.5p.p.
EPS - Basic (US$) 0.79 0.97 -17.9% 1.09 -27.1%
Adjusted EPS - Basic
(US$) (3) 0.94 0.97 -2.8% 0.93 1.5%
EPS - Diluted (US$) 0.79 0.96 -17.9% 1.08 -27.0%
Adjusted EPS - Diluted
(US$) (3) 0.93 0.97 -3.8% 0.92 1.7%
Weighted Avg. # of Shares -
Basic (000) 42,938 42,813 0.3% 42,938 0.0%
Weighted Avg. # of Shares -
Diluted (000) 43,401 43,304 0.2% 43,479 -0.2%
Consolidated Financial & Operating
Highlights FY 2007 FY 2006 % Change
RPMs (millions) 5,861 5,017 16.8%
ASMs (mm) 7,918 6,866 15.3%
Load Factor 74.0% 73.1% 1.0p.p.
Yield 16.5 15.9 3.6%
PRASM (cents) 12.2 11.6 5.0%
RASM (cents) 13.0 12.4 4.7%
CASM (cents) 10.6 10.0 6.0%
Adjusted CASM (cents) (1) 10.5 10.0 5.1%
Adjusted CASM Excl. Fuel (cents) (1) 7.1 6.8 4.9%
Breakeven Load Factor 59.2% 58.0% 1.2 p.p.
Operating Revenues (US$ mm) 1,027.3 851.2 20.7%
EBITDAR (US$ mm) (2) 301.1 239.9 25.5%
Adjusted EBITDAR (US$ mm) (3) 293.1 239.9 22.2%
EBITDAR Margin (2) 28.5% 28.2% 0.3p.p.
Adjusted EBITDAR Margin (3) 29.3% 28.2% 1.1p.p.
Operating Income (US$ mm) 189.5 166.1 14.1%
Adjusted Operating Income
(US$ mm) (1) 196.8 166.1 18.5%
Operating Margin 18.4% 19.5% -1.1p.p.
Adjusted Operating Margin
(US$ mm) (1) 19.2% 19.5% -0.4p.p.
Net Income (US$ mm) 160.4 133.8 19.9%
Adjusted Net Income (US$ mm) (3) 159.7 133.8 19.3%
Net Margin 15.6% 15.7% -0.1p.p.
Adjusted Net Margin (3) 15.5% 15.7% -0.2p.p.
EPS - Basic (US$) 3.74 3.13 19.6%
Adjusted EPS - Basic (US$) (3) 3.72 3.13 19.1%
EPS - Diluted (US$) 3.69 3.10 19.2%
Adjusted EPS - Diluted (US$) (3) 3.67 3.10 18.7%
Weighted Avg. # of Shares - Basic
(000) 42,908 42,813 0.2%
Weighted Avg. # of Shares - Diluted
(000) 43,464 43,223 0.6%
(1) Adjusted Operating Income and Adjusted CASM exclude special charges of
US$1.0 million recorded in 3Q07 and US$6.3 million recorded in 4Q07,
resulting in special charges of US$7.3 million for full year 2007
related to the early termination of MD-80 aircraft leases, as a result
of Aero Republica's ongoing transition to an all EMBRAER-190 fleet.
(2) EBITDAR means earnings before interest, taxes, depreciation,
amortization and rent.
(3) Adjusted EBITDAR, Adjusted Net Income and Adjusted EPS (Basic and
Diluted):
a) Excludes special charges of US$1.0 million recorded in
3Q07 and US$6.3 million recorded in 4Q07, resulting in special charges
of US$7.3 million for full year 2007 related to the early termination
of MD-80 aircraft leases, as a result of Aero Republica's ongoing
transition to an all EMBRAER-190 fleet.
b) Excludes for 3Q07 and full year 2007 an US$8.0 million pre-tax non-
recurring gain related to insurance proceeds in excess of aircraft
book value recorded in 3Q07.
Note: Attached to this press release is a reconciliation of non-GAAP financial measures to the comparable US GAAP measures.
Full 4Q07 earnings release available to download on: http://investor.shareholder.com/copa/results.cfm
4Q07 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST
Date: February 21, 2008
Time: 11:00 a.m. US EST
Conference Call:
Telephone Number: 877-419-6591 (U.S. Domestic Callers)
719-325-4922 (International Callers)
Webcast: http://investor.shareholder.com/copa/events.cfm
Copa Holdings, S.A.
NON-GAAP FINANCIAL MEASURE RECONCILIATION
This press release includes the following non GAAP financial measures:
Adjusted CASM, Adjusted CASM Excluding Fuel, Adjusted EBITDAR, Adjusted
Operating Income, Adjusted Net Income and Adjusted EPS. This supplemental
information is presented because we believe they are useful indicators of our
operating performance and are useful in comparing our performance with other
companies in the airline industry. These measures should not be considered in
isolation, and should be considered together with comparable US GAAP measures,
in particular operating income and net income. The following is a
reconciliation of these non-GAAP financial measures to the comparable US GAAP
measures:
EBITDAR (Figures in US$
thousands) 4Q07 4Q06 3Q07 2007 2006
Net Income $34,116 $41,455 $46,822 $160,411 $133,839
Interest Expense (12,567) (8,190) (11,524) (44,332) (29,150)
Capitalized Interest 584 361 719 2,570 1,712
Interest Income 3,361 2,467 3,259 12,193 7,257
Income Taxes (6,269) (3,491) (3,848) (18,317) (12,286)
EBIT 49,007 50,308 58,216 208,297 166,306
Depreciation and
Amortization 9,821 7,458 9,056 35,327 24,874
EBITDA 58,828 57,766 67,272 243,624 191,180
Aircraft Rent 9,692 9,518 10,478 38,636 38,169
Other Rentals 3,461 2,988 2,814 11,536 10,524
EBITDAR $71,981 $70,272 $80,564 $293,796 $239,873
Special Charges 6,300 - 1,009 7,309 -
Non-recurring gain - - (8,019) (8,019) -
Adjusted EBITDAR $78,281 $70,272 $73,555 $293,087 $239,873
EARNINGS PER SHARE 4Q07 4Q06 3Q07 2007 2006
Diluted Earnings per Share $0.79 $0.96 $1.08 $3.69 $3.10
Adjustments:
Special Charges 0.15 - 0.02 0.17 -
Non-recurring gain - - (0.18) (0.18) -
Adjusted Diluted EPS $0.93 $0.96 $0.92 $3.67 $3.10
CASM (cents) 4Q07 4Q06 3Q07 2007 2006
Cost per available seat
mile (CASM) $11.7 $10.2 $10.4 $10.6 $9.98
Less: Special Charges
per ASM (0.3) - (0.0) (0.1) -
Adjusted CASM 11.4 10.2 10.3 10.5 10.0
Less: Fuel Cost per
ASM (3.8) (3.1) (3.4) (3.4) (3.2)
Adjusted CASM Excluding
Fuel $7.6 $7.1 $6.9 $7.1 $6.8
CPA-G
SOURCE Copa Holdings, S.A.
http://www.copaair.com
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