Copa Holdings Reports Net Profit of $74.3 million and EPS of $1.75 for the First Quarter of 2020

May 06, 2020

PANAMA CITY, May 6, 2020 /PRNewswire/ -- Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the first quarter of 2020 (1Q20). 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 first quarter of 2019 (1Q19).

OPERATING AND FINANCIAL HIGHLIGHTS

  • Due to air travel restrictions implemented in response to the Covid-19 outbreak, the Company was forced to temporarily suspend all commercial flights on March 22nd, 2020.  The Company currently expects to re-start a scaled-down operation on June 1st, 2020, although this date could be delayed as a result of further travel restrictions.
  • For 1Q20, Copa Holdings reported net profit of US$74.3 million or earnings per share (EPS) of US$1.75, as compared to net profit of US$89.4 million or earnings per share of US$2.11 in 1Q19.
  • Operating profit for 1Q20 came in at US$98.7 million, representing a 12.6% decrease from operating profit of US$112.9 million in 1Q19.  Operating margin for 1Q20 came in at 16.6%, compared to an operating margin of 16.8% in 1Q19.
  • For 1Q20, consolidated passenger traffic decreased 16.3% on a 14.4% capacity reduction.  As a result, consolidated load factor for the quarter decreased 1.9 percentage points to 81.5%.
  • Total revenues for 1Q20 decreased 11.4% to US$595.5 million.  Yield per passenger mile increased 5.8% to 12.8 cents and RASM came in at 10.8 cents, or 5.8% higher than 1Q19.
  • Operating cost per available seat mile (CASM) increased 3.8%, from 8.7 cents in 1Q19 to 9.0 cents in 1Q20.  CASM excluding fuel costs increased 8.0% from 6.1 cents in 1Q19 to 6.6 cents in 1Q20, mainly as a result of flight cancellations in March due to the Covid-19 outbreak and, later in the month, the unexpected grounding of the Company´s fleet, resulting in a significant year over year capacity reduction.
  • During 1Q20 the Company drew US$145 million from its available short-term lines of credit.
  • Cash, short-term and long-term investments ended the quarter at US$ 1.13 billion, representing approximately 43% of the last twelve months' revenues.
  • Copa Holdings ended the quarter with a consolidated fleet of 102 aircraft – 6 Boeing 737MAX9s, 68 Boeing 737-800s, 14 Boeing 737-700s, and 14 Embraer-190s.

Subsequent Events

  • Given the uncertainty related to the Covid-19 crisis, including the effect on future air travel demand, on April 26, 2020 our Board of Directors postponed dividend payments for the remaining quarters of 2020.
  • Throughout the month of April, the Company obtained unsecured, committed credit facilities with three local banks, for an aggregate amount of US$150 million dollars.  These facilities remain unutilized.
  • On April 30, 2020, the Company further bolstered its cash position by successfully closing a US$350 million convertible senior notes offering, maturing in 2025.

   

Consolidated Financial
& Operating Highlights

1Q20

1Q19

Variance
vs. 1Q19

4Q19

Variance
vs. 4Q19

Revenue Passengers Carried ('000)

2,118

2,588

-18.2%

2,633

-19.5%

RPMs (mm) 

4,473

5,345

-16.3%

5,244

-14.7%

ASMs (mm) 

5,491

6,415

-14.4%

6,149

-10.7%

Load Factor 

81.5%

83.3%

-1.9 p.p.

85.3%

-3.8 p.p.

Yield

12.8

12.1

5.8%

12.5

2.4%

PRASM (US$ Cents) 

10.5

10.1

3.5%

10.7

-2.2%

RASM (US$ Cents) 

10.8

10.5

3.5%

11.1

-2.2%

CASM (US$ Cents) 

9.0

8.7

3.8%

10.8

-16.2%

Adjusted CASM (US$ Cents) (1)

9.0

8.7

3.8%

9.3

-3.2%

CASM Excl. Fuel (US$ Cents) 

6.6

6.1

8.0%

8.0

-18.2%

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

6.6

6.1

8.0%

6.6

-0.1%

Fuel Gallons Consumed (Millions) 

70.0

81.2

-13.8%

78.9

-11.3%

Avg. Price Per Fuel Gallon (US$ Dollars)

1.95

2.09

-6.7%

2.16

-9.9%

Average Length of Haul (Miles)

2,112

2,065

2.3%

1,992

6.0%

Average Stage Length (Miles)

1,308

1,299

0.7%

1,279

2.2%

Departures

28,286

33,329

-15.1%

32,441

-12.8%

Block Hours

93,568

110,089

-15.0%

105,620

-11.4%

Average Aircraft Utilization (Hours)

10.1

11.6

-13.5%

11.3

-10.4%

Operating Revenues (US$ mm) 

595.5

672.2

-11.4%

681.9

-12.7%

Operating Profit (US$ mm)

98.7

112.9

-12.6%

17.8

n/m

Adjusted Operating Profit (US$ mm) (1)

98.7

112.9

-12.6%

107.1

-7.9%

Operating Margin 

16.6%

16.8%

-0.2 p.p.

2.6%

14.0 p.p.

Adjusted Operating Margin (1)

16.6%

16.8%

-0.2 p.p.

15.7%

0.9 p.p.

Net Profit (US$ mm)

74.3

89.4

-16.9%

2.7

n/m

Adjusted Net Profit (US$ mm) (1)

74.3

89.4

-16.9%

92.1

-19.3%

EPS - Basic and Diluted (US$)

1.75

2.11

-17.0%

0.06

n/m

Adjusted EPS - Basic and Diluted (US$) (1)

1.75

2.11

-17.0%

2.17

-19.4%

# of Shares - Basic and Diluted ('000) 

42,501

42,478

0.1%

42,487

0.0%

 

(1)Adjusted CASM, Adjusted CASM Excl. Fuel, Adjusted Operating Profit, Adjusted Net Profit, Adjusted Operating Margin and Adjusted EPS for 4Q19, exclude non-cash charges associated with the Embraer 190 Fleet impairment.

Note:  Attached to this press release is a reconciliation of non-IFRS financial measures to the comparable IFRS measures.

FULL 1Q20 EARNINGS RELEASE AVAILABLE FOR DOWNLOAD AT:
https://copa.gcs-web.com/financial-information/quarterly-results

1Q20 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST

 

Date:

May 7, 2020

   

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 80 destinations in 33 countries in North, Central and South America and the Caribbean with a modern fleet consisting of 102 aircraft: 6 Boeing 737MAX9s, 82 Boeing 737NG aircraft and 14 EMBRAER-190s. 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

 

Unaudited

 

%

 

Unaudited

 

%

   

1Q20

 

1Q19

 

Change

 

4Q19

 

Change

Operating Revenues

                   

Passenger revenue

 

574,650

 

648,790

 

-11.4%

 

657,940

 

-12.7%

Cargo and mail revenue

 

13,017

 

15,316

 

-15.0%

 

16,033

 

-18.8%

Other operating revenue

 

7,785

 

8,063

 

-3.4%

 

7,955

 

-2.1%

Total Operating Revenue

 

595,453

 

672,169

 

-11.4%

 

681,927

 

-12.7%

                     

Operating Expenses

                   

Fuel

 

136,954

 

170,163

 

-19.5%

 

171,314

 

-20.1%

Wages, salaries, benefits and other employees' expenses

 

110,289

 

113,662

 

-3.0%

 

115,036

 

-4.1%

Passenger servicing

 

21,890

 

25,571

 

-14.4%

 

24,798

 

-11.7%

Airport facilities and handling charges

 

40,365

 

45,362

 

-11.0%

 

44,877

 

-10.1%

Sales and distribution

 

42,011

 

53,133

 

-20.9%

 

53,222

 

-21.1%

Maintenance, materials and repairs

 

27,144

 

28,047

 

-3.2%

 

37,648

 

-27.9%

Depreciation and amortization

 

66,375

 

68,187

 

-2.7%

 

70,469

 

-5.8%

Flight operations

 

23,731

 

25,875

 

-8.3%

 

24,908

 

-4.7%

Other operating and administrative expenses

 

28,008

 

29,297

 

-4.4%

 

32,506

 

-13.8%

Fleet Impairment

             

89,344

 

n/m

Total Operating Expense

 

496,766

 

559,296

 

-11.2%

 

664,123

 

-25.2%

                     

Operating Profit

 

98,687

 

112,873

 

-12.6%

 

17,804

 

n/m

                     

Non-operating Income (Expense):

                   

Finance cost

 

(11,085)

 

(14,010)

 

-20.9%

 

(17,154)

 

-35.4%

Finance income

 

6,320

 

5,954

 

6.2%

 

6,289

 

0.5%

Gain (loss) on foreign currency fluctuations

 

(10,950)

 

(5,960)

 

83.7%

 

2,406

 

n/m

Other non-operating income (expense)

 

(11)

 

(825)

 

-98.6%

 

(989)

 

-98.9%

Total Non-Operating Income/(Expense)

 

(15,726)

 

(14,841)

 

n/m

 

(9,448)

 

66.5%

                     

Profit before taxes

 

82,961

 

98,032

 

-15.4%

 

8,356

 

n/m

                     

Income tax expense

 

8,687

 

8,600

 

1.0%

 

5,629

 

54.3%

                     

Net Profit

 

74,273

 

89,431

 

-16.9%

 

2,728

 

n/m

                     
                     

EPS - Basic and Diluted

 

1.75

 

2.11

 

-17.0%

 

0.06

 

n/m

Shares - Basic and Diluted

 

42,501,338

 

42,477,761

 

0.1%

 

42,486,717

 

0.0%

 

 

Copa Holdings, S. A. and subsidiaries 

   

Consolidated statement of financial position 

   

(US$ Thousands)

March

December

 

2020

2019

 

 (Unaudited) 

 

 ASSETS 

   
     

 Current Assets 

   

Cash and cash equivalents

339,926

158,733

Short-term investments

672,721

692,403

Total cash, cash equivalents and short-term investments

1,012,646

851,136

     

Accounts receivable, net

49,708

129,634

Accounts receivable from related parties

1,488

147

Expendable parts and supplies, net

74,454

69,100

Prepaid expenses

41,382

49,034

Prepaid income tax

1,286

1,181

Other current assets

14,056

14,206

 

182,374

263,301

Assets held for sale 

119,299

120,006

     

TOTAL CURRENT ASSETS

1,314,320

1,234,442

     

Long-term investments

114,277

134,347

Long-term accounts receivable

2,364

2,139

Long-term prepaid expenses

15,018

17,743

Property and equipment, net

2,522,205

2,532,402

Right of use assets

284,552

290,843

Intangible, net

107,047

108,116

Net pension asset

665

249

Deferred tax assets

17,050

19,216

Other Non-Current Assets

16,027

17,881

TOTAL NON-CURRENT ASSETS

3,079,207

3,122,935

     

TOTAL ASSETS

4,393,526

4,357,377

     

Current maturities of long-term debt

261,219

117,238

Current portion of lease liability

97,908

97,732

Accounts payable

126,941

119,332

Accounts payable to related parties

2,574

14,086

Air traffic liability

411,912

497,374

Frequent flyer deferred revenue

84,165

80,325

Taxes and interest payable

33,061

51,611

Employee benefits obligations

36,121

55,373

Income tax payable

13,530

9,683

Other Current Liabilities

95

83

TOTAL CURRENT LIABILITIES

1,067,526

1,042,836

     

Long-term debt

907,960

938,182

Lease Liability

199,534

206,832

Other long - term liabilities

197,469

191,221

Deferred tax Liabilities

44,379

43,397

TOTAL NON-CURRENT LIABILITIES

1,349,343

1,379,633

     

TOTAL LIABILITIES

2,416,869

2,422,469

     

 EQUITY 

   

 Issued Capital 

   

Class A -33,860,663 issued and 31,399,270  outstanding

21,184

21,142

Class B common stock - 10,938,125

7,466

7,466

Additional Paid-In Capital

87,540

86,135

Treasury Stock

(136,388)

(136,388)

Retained Earnings

1,931,214

1,718,179

Net profit 

74,273

247,002

Other comprehensive loss

(8,632)

(8,628)

     

TOTAL EQUITY

1,976,658

1,934,908

     

TOTAL EQUITY LIABILITIES

4,393,526

4,357,377

     

 

Copa Holdings, S. A. and subsidiaries 

           

Consolidated Statement of Cash Flows

           

For the three months ended March 31

           

(In US$ thousands)

                 
                   

2020

 

2019

 

2018

                   

(Unaudited)

 

(Unaudited)

 

(Unaudited)

Cash flow from operating activities 

 

106,340

 

144,061

 

171,810

Cash flow from investing activities 

 

19,795

 

(3,591)

 

(74,198)

Cash flow from financing activities 

 

55,058

 

(84,361)

 

(139,820)

Net increase (decrease) in cash and cash equivalents 

 

181,193

 

56,109

 

(42,208)

Cash and cash equivalents at January 1

 

158,732

 

156,158

 

238,792

Cash and cash equivalents at March 31

 

$                    339,925

 

$                    212,267

 

$                    196,584

                             

Short-term investments 

   

672,721

 

556,127

 

650,110

Long-term investments 

   

114,277

 

128,992

 

155,313

Total cash and cash equivalents and investments at March 31

 

$                1,126,923

 

$                    897,386

 

$                1,002,007

 

 

Copa Holdings, S.A.

NON-IFRS FINANCIAL MEASURE RECONCILIATION

This press release includes the following non IFRS financial measures: Adjusted Operating CASM Excluding Fuel, Adjusted Operating Profit, Adjusted Net Profit, and Adjusted EPS. 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

           

Adjusted Net Profit and Adjusted EPS

 

1Q20

 

1Q19

 

4Q19

             

Operating Profit as Reported

 

$            98,687

 

$          112,873

 

$            17,804

Special Items (adjustments):

           

   Fleet Impairment

         

$            89,344

Adjusted Operating Profit

 

$            98,687

 

$          112,873

 

$          107,148

             

Net profit as Reported

 

$            74,273

 

$            89,431

 

$              2,728

Special Items (adjustments):

           

   Fleet Impairment

         

$            89,344

Adjusted Net Profit

 

$            74,273

 

$            89,431

 

$            92,071

             

Shares used for Computation (in thousands)

           

     Basic and Diluted

 

42,501

 

42,478

 

42,487

             

Adjusted earnings per share - Basic and Diluted

 

$                1.75

 

$                2.11

 

$                2.17

             
             
             

Reconciliation of Adjusted Operating Costs per ASM

           

Excluding Fuel (Adjusted CASM Excl. Fuel)

 

1Q20

 

1Q19

 

4Q19

             

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

 

9.0

 

8.7

 

10.8

Fleet Impairment per ASM (in US$ Cents)

         

(1.5)

Aircraft fuel per ASM  (in US$ Cents)

 

(2.5)

 

(2.7)

 

(2.8)

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

 

6.6

 

6.1

 

6.6

             

 

  

Cision View original content:http://www.prnewswire.com/news-releases/copa-holdings-reports-net-profit-of-74-3-million-and-eps-of-1-75-for-the-first-quarter-of-2020--301054285.html

SOURCE Copa Holdings, S.A.

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