SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
6-K
Report
of Foreign Issuer
Pursuant
to Rule 13a-16 or 15d-16 of
the
Securities Exchange Act of 1934
Report
on Form 6-K dated for
the month of May,
2007
Copa
Holdings, S.A.
(Translation
of Registrant's Name Into English)
Boulevard
Costa del Este, Avenida Principal y Avenida de la Rotonda
Urbanización
Costa del Este
Parque
Lefevre
Panama
City, Panama
(Address
of principal executive offices)
(Indicate
by check mark whether the registrant files or will file annual reports under
cover of Form 20-F or Form 40-F.)
Form
20-F x Form
40-F o
(Indicate
by check whether the registrant by furnishing the information contained in
this
Form is also thereby furnishing the information to the Commission pursuant
to
Rule 12g3-2(b) under the Securities Exchange Act of 1934.)
Yes o No x
(If
“Yes”
is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b);82- )
Copa
Holdings Reports Earnings of US$39.5 Million and EPS of US$0.91 for 1Q08
PANAMA
CITY, Panama, May 8 /PRNewswire-FirstCall/ -- Copa Holdings, S.A. (NYSE:
CPA),
parent company of Copa Airlines and Aero Republica, today announced financial
results for the first quarter of 2008 (1Q08). The terms “Copa Holdings" or "the
Company" makes 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
first quarter of 2007 (1Q07).
OPERATING
AND FINANCIAL HIGHLIGHTS
| · |
Copa
Holdings reported net income of US$39.5 million for 1Q08, or diluted
earnings per share (EPS) of US$0.91, as compared to net income
of US$48.6
million or diluted EPS of US$1.12 in 1Q07. Operating income for
1Q08 came
in at US$51.7 million, as compared to operating income of US$60.8
million
for 1Q08. Operating margin decreased from 25.0% to 17.5%,
maintaining its position among the most profitable airlines in
the
industry.
|
| · |
These
strong results were achieved despite US$21.7 million in additional
fuel
costs as a result of a 35.1% increase in the all-in average price
per
gallon of jet fuel.
|
| · |
In
1Q08, total revenues increased to US$295.9 million, representing
growth of
21.9%. Yield per passenger mile increased 7.2% to 17.3 cents and
operating
revenue per available seat mile (RASM) increased 9.6% to 14.2 cents.
|
| · |
Revenue
passenger miles (RPMs) increased 13.5% from 1.43 billion in 1Q07
to 1.62
billion in 1Q08, and available seat miles (ASMs) increased 11.2%
from 1.87
billion in 1Q07 to 2.08 billion in 1Q08, with the Copa Airlines
segment
increasing 16.9% year-over-year and Aero Republica decreasing 9.7%
as a
result of their down gauge to an Embraer-190 fleet. Consolidated
load
factor increased 1.6 percentage points from 76.4% to 78.0%.
|
| · |
Operating
cost per available seat mile (CASM), increased 20.7% from 9.7 cents
in
1Q07 to 11.8 cents in 1Q08. CASM, excluding fuel costs, increased
14.1%
from 6.7 cents in 1Q07 to 7.7 cents in 1Q08, mainly due to an increase
in
Aero Republica’s unit costs driven by timing of maintenance events,
Colombian currency appreciation and down gauging to an Embraer-190
fleet.
|
| · |
Liquidity
including cash, short term and long term investments plus committed
credit
lines ended the quarter at US$357.1 Million, representing 33% of
last
twelve months revenues.
|
| · |
For
1Q08, Copa Airlines reported an on-time performance of 90.3% and
a
flight-completion factor of 99.8%, maintaining its position among
the best
in the industry.
|
| · |
On
March 10, Copa Airlines launched direct service from Panama and
connecting
cities to Port of Spain, Trinidad and Tobago -- the airline's 41st
destination.
|
RECENT
DEVELOPMENTS
| · |
On
April 11, Copa Airlines took delivery of its 12th
Embraer-190 aircraft, bringing its fleet total to 38, with an average
age
of 3.9 years. Copa Holdings consolidated fleet, including Aero
Republica,
is currently composed of 51 aircraft.
|
| · |
In
April, Aero Republica was certified under IATA’s Operational Safety Audit
(IOSA).
|
| · |
On
May 7, the Board of Directors of Copa Holdings declared an annual
dividend
of $0.37 per share. The dividend is payable June 16, 2008, to stockholders
of record as of May 30, 2008.
|
| · |
CIASA,
controlling shareholder of Copa Holdings, S.A., has recently reached
an
agreement in principle with Continental Airlines, Inc. (“Continental”) to
waive the lock-up under the shareholders agreement dated June 29,
2006,
which currently restricts Continental's ability to sell its remaining
shares of Copa's Class A common stock through June 29, 2008. The
Company
is preparing a registration statement to be filed with the U.S.
Securities
and Exchange Commission. Once the registration statement is effective,
Continental will have the flexibility to sell its remaining shares
of Copa
Holdings.
|
|
Consolidated
Financial & Operating Highlights
|
1Q08
|
1Q07
|
%
Change
|
4Q07
|
%
Change
|
|||||||||||
|
RPMs
(millions)
|
1,619
|
1,427
|
13.5
|
%
|
1,524
|
6.3
|
%
|
|||||||||
|
ASMs
(mm)
|
2,077
|
1,868
|
11.2
|
%
|
2,066
|
0.5
|
%
|
|||||||||
|
Load
Factor
|
78.0
|
%
|
76.4
|
%
|
1.6
p.p.
|
73.8
|
%
|
4.2
p.p.
|
||||||||
|
Yield
|
17.3
|
16.1
|
7.2
|
%
|
17.5
|
-0.9
|
%
|
|||||||||
|
PRASM
(cents)
|
13.5
|
12.3
|
9.5
|
%
|
12.9
|
4.7
|
%
|
|||||||||
|
RASM
(cents)
|
14.2
|
13.0
|
9.6
|
%
|
13.8
|
3.4
|
%
|
|||||||||
|
CASM
(cents)
|
11.8
|
9.7
|
20.7
|
%
|
11.7
|
0.6
|
%
|
|||||||||
|
Adjusted
CASM (cents)
(1)
|
11.8
|
9.7
|
20.7
|
%
|
11.4
|
3.2
|
%
|
|||||||||
|
Adjusted
CASM Excl. Fuel (cents)(1)
|
7.7
|
6.7
|
14.1
|
%
|
7.6
|
1.4
|
%
|
|||||||||
|
Breakeven
Load Factor
|
64.3
|
%
|
54.3
|
%
|
10.0
p.p.
|
60.2
|
%
|
4.1
p.p.
|
||||||||
|
Operating
Revenues (US$ mm)
|
295.9
|
242.7
|
21.9
|
%
|
284.6
|
4.0
|
%
|
|||||||||
|
EBITDAR
(US$ mm) (2)
|
75.9
|
79.5
|
-4.6
|
%
|
72.2
|
5.1
|
%
|
|||||||||
|
Adjusted
EBITDAR (US$ mm) (3)
|
75.9
|
79.5
|
-4.6
|
%
|
78.5
|
-3.3
|
%
|
|||||||||
|
EBITDAR
Margin (2)
|
25.6
|
%
|
32.8
|
%
|
-7.1
p.p.
|
25.4
|
%
|
0.3
p.p.
|
||||||||
|
Adjusted
EBITDAR Margin
(3)
|
25.6
|
%
|
32.8
|
%
|
-7.1
p.p.
|
27.6
|
%
|
-1.9
p.p.
|
||||||||
|
Operating
Income (US$ mm)
|
51.7
|
60.8
|
-14.9
|
%
|
43.0
|
20.3
|
%
|
|||||||||
|
Adjusted
Operating Income (US$ mm) (1)
|
51.7
|
60.8
|
-14.9
|
%
|
49.3
|
4.9
|
%
|
|||||||||
|
Operating
Margin
|
17.5
|
%
|
25.0
|
%
|
-7.6
p.p.
|
15.1
|
%
|
2.4
p.p.
|
||||||||
|
Adjusted
Operating Margin (US$ mm)
(1)
|
17.5
|
%
|
25.0
|
%
|
-7.6
p.p.
|
17.3
|
%
|
0.2
p.p.
|
||||||||
|
Net
Income (US$ mm)
|
39.5
|
48.6
|
-18.7
|
%
|
35.5
|
11.2
|
%
|
|||||||||
|
Adjusted
Net Income (US$ mm) (3)
|
39.5
|
48.6
|
-18.7
|
%
|
41.8
|
-5.6
|
%
|
|||||||||
|
Net
Margin
|
13.3
|
%
|
20.0
|
%
|
-6.7
p.p.
|
12.5
|
%
|
0.9
p.p.
|
||||||||
|
Adjusted
Net Margin (3)
|
13.3
|
%
|
20.0
|
%
|
-6.7
p.p.
|
14.7
|
%
|
-1.3
p.p.
|
||||||||
|
EPS
- Basic (US$)
|
0.92
|
1.13
|
-19.0
|
%
|
0.83
|
10.7
|
%
|
|||||||||
|
Adjusted
EPS - Basic (US$)
(3)
|
0.92
|
1.13
|
-19.0
|
%
|
0.97
|
-5.7
|
%
|
|||||||||
|
EPS
- Diluted (US$)
|
0.91
|
1.12
|
-18.7
|
%
|
0.82
|
11.1
|
%
|
|||||||||
|
Adjusted
EPS - Diluted (US$) (3)
|
0.91
|
1.12
|
-18.7
|
%
|
0.96
|
-5.6
|
%
|
|||||||||
|
Weighted
Avg. # of Shares - Basic (000)
|
42,985
|
42,817
|
0.4
|
%
|
42,938
|
0.1
|
%
|
|||||||||
|
Weighted
Avg. # of Shares - Diluted (000)
|
43,433
|
43,449
|
0.0
|
%
|
43,401
|
0.1
|
%
|
|||||||||
(1)Adjusted
Operating Income and Adjusted CASM exclude special charges of US$6.3 million
recorded in 4Q07, 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$6.3 million recorded in 1Q08, 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.
Note:
Attached to this press release is a reconciliation
of non-GAAP financial measures to the comparable US GAAP
measures.
2
MANAGEMENT’S
COMMENTS ON 1Q08 RESULTS
For
1Q08
the company recorded operating income of US$51.7 million and net income of
US$39.5 million. Total revenues increased 21.9% during the quarter, while
operating margin decreased 7.6 percentage points from 25% to 17.5%, mainly
as a
result of increased fuel prices. Copa Holdings first quarter performance
highlights the company’s ability to deliver healthy earnings, despite an
increasing fuel price environment.
Passenger
revenues, which represented 95% of total revenues, increased 21.7% to US$280.2
million, due to an 11.2% increase in capacity and a 9.5% increase in passenger
revenue per ASM. The latter was driven by a 7.2% increase in yield and a
1.6
percentage point increase in consolidated load factors from 76.4% to
78.0%.
In
1Q08,
Copa Airlines’ yields came in at 16.0 cents, representing an increase of 4.3%
compared to 1Q07. Aero Republica’s yields increased 23.1% to 25.2 cents and
continued to benefit from a stronger Colombian currency and higher local
currency fares as well as increased capacity into higher yielding international
flights. Aero Republica’s international load factors increased from 47.4% in
1Q07 to 62.9% in 1Q08, despite doubling international capacity, which
represented 14.9% of total capacity in 1Q08 as compared to 6.7% in 1Q07.
Consolidated
operating expenses for 1Q08 increased 34.2% to US$244.2 million, while
consolidated operating expenses per ASM (CASM) increased 20.7% to 11.8 cents.
Incremental fuel costs as a result of higher fuel prices totaled US$21.7
million. Excluding fuel costs, unit costs increased 14.1% to 7.7 cents, mainly
as a result of an increase in Aero Republica’s unit cost mainly driven by timing
of maintenance events, Colombian currency appreciation and down gauging to
an
Embraer-190 fleet.
Jet
fuel
prices, net of hedges, increased 35.1% from an average of US$2.09 in 1Q07
to
US$2.82 in 1Q08. For 1Q08, fuel hedges represented 18% of consolidated
volume at an average price of $2.16 per gallon (US Gulf Coast). The
company currently has hedges in place for 2Q08 representing 17% of consolidated
volume at $2.25 per gallon, 13% at $2.34 for 3Q08 and 9% at $2.49 for 4Q08.
The
Company increased its already solid liquidity position, which includes US$34.5
million in committed credit lines to US$357.1 million in 1Q08, translating
to
approximately 33% of the last twelve-months´ revenues. Total debt amounted to
US$836.1 million, which relates for the most part to aircraft and equipment
financing.
For
1Q08,
Aero Republica recorded an operating loss of US$0.7 million, compared to
an
operating income of US$3.9 million in 1Q07, as a result of higher fuel prices
and more scheduled maintenance events.
Capacity
in terms of ASMs flown in Embraer-190 aircraft, as a percentage of total
Aero
Republica capacity increased from 16% in 1Q07 to 50% in 1Q08. Additionally,
as
part of its international expansion Aero Republica’s international capacity more
than doubled year-over-year reaching 14.9% of total capacity during 1Q08
as
compared to 6.7% in 1Q07, while international load factors increased from
47.4%
to 63.0% during the same period.
3
For
the
remainder of 2008, we expect healthy economic growth in the region which
should
continue driving demand for air travel. Copa Airlines will keep on strengthening
and expanding its network with the delivery of five additional aircraft,
ending
the year with a fleet of 43 aircraft. Additionally, Aero Republica will continue
its fleet transition with the delivery of two Embraer-190 aircraft, expected
to
end the year with a fleet of 13 aircraft. On a consolidated basis, Copa
Holdings’ consolidated fleet will consist of 56 aircraft by the end of
2008.
OUTLOOK
FOR 2008
Looking
forward, Copa Holdings will continue its focus on profitable growth and the
execution of its proven business model of efficiently connecting the Americas
through Copa Airlines´ centrally located Hub of the Americas in Panama City.
Copa Holdings expects demand to be driven by regional economic growth and
the
growing preference for its network and services.
However,
in light of the current fuel price environment and our belief that this
situation may continue for the remainder of 2008, we have revised our full
year
guidance as follows:
|
·
|
Capacity,
measured in ASMs, is revised from 9.3 billion to 9.1 billion ASMs,
mainly
as a result of changes in our operational plan aimed at optimizing
capacity growth and profitability in light of a challenging fuel
price
environment. The current capacity growth forecast represents
year-over-year consolidated growth of 15%, with Copa year-over-year
growth
expected at 18% while Aero Republica´s capacity will be flat
year-over-year as a result of their transition from an MD-80 fleet
to an
Embraer-190 fleet.
|
|
·
|
Average
load factor remains
unchanged at 75% up from 74% in 2007.
|
|
·
|
RASM
is
expected to come in at approximately 14.2 cents, as opposed to
the
previous guidance of 13.4 cents. This increase should result from
a
healthy fare environment and revenue management initiatives to
mitigate
increased fuel prices.
|
|
·
|
CASM
Ex-fuel
is
projected to increase from 7.3 cents to 7.5 cents, mainly as a
result of
revised capacity growth.
|
|
·
|
Operating
margin
is
adjusted from a range of 17-19% to a range of 15-17%, mainly as
a result
of increasing jet fuel from an average price per gallon of $2.38
to $2.98
(US Gulf Coast).
|
|
Financial
Outlook
(US
GAAP)
|
2008
- Full Year
Prior
|
2008
- Full Year
Revised
|
2007
Actual
|
|
ASMs
(billion)
|
+/-9.3
|
+/-9.1
|
7.9
|
|
Average
Load Factor
|
+/-75%
|
+/-75%
|
74%
|
|
RASM
(cents)
|
+/-13.4
|
+/-14.2
|
13.0
|
|
CASM
Ex-fuel (cents)
|
+/-
7.3
|
+/-
7.5
|
7.1
|
|
Operating
Margin
|
17%-19%
|
15-17%
|
19.2
|
4
CONSOLIDATED
FIRST QUARTER RESULTS
Operating
revenue
Consolidated
revenue for 1Q08 totaled US$295.9 million, a 21.9% or US$53.1 million
increase over operating revenue of US$242.7 million in 1Q07, mainly due to
a 20.5% or US$40.2 million increase in Copa Airlines’ operating revenue and a
31.7% or US$14.9 million increase in Aero Republica’s operating
revenue.
|
Copa
Airlines operating revenue
|
Copa
Airlines operating revenue for 1Q08 totaled US$236.9 million, a 20.5% increase
over operating revenue of US$196.6 million in 1Q07. This increase was
primarily due to a 20.2% or US$37.5 million increase in passenger revenue.
Passenger
revenue. For
1Q08
passenger revenue totaled US$223.2 million, a 20.2% increase over passenger
revenue of US$185.7 million in 1Q07 as ASMs increased by 16.9% in 1Q08 as
compared to 1Q07. Passenger yield increased 4.3% to 16.0 cents, while load
factor decreased from 82.4% in 1Q07 to 81.2% in 1Q08.
Cargo,
mail and other. Cargo,
mail and other revenue totaled US$13.7 million in 1Q08, a 25.0% increase
over
cargo, mail and other of US$11.0 million in 1Q07.
| Aero Republica operating revenue | ||
During
1Q08, Aero Republica generated operating revenue of US$61.9 million,
representing a 31.7% increase over 1Q07. This increase resulted mainly from
a
US$12.4 million or 27.9% increase in passenger revenue. During the quarter
Aero
Republica’s capacity (ASMs) decreased by 9.7% mainly as a result of the down
gauge from an MD-80 fleet to an Embraer-190 fleet, while traffic (RPMs)
increased by 3.9%, resulting in a load factor of 62.6% or 8.2 percentage
points
above 1Q07. Yields increased by 23.1% primarily due to the strengthening
of the
Colombian currency, as well as higher fares in both domestic and international
routes.
Operating
expenses
For
1Q08,
consolidated operating expenses rose 34.2% to US$244.2 million, representing
operating cost per available seat mile (CASM) of 11.8 cents. Operating cost
per
available seat mile (CASM), excluding fuel costs, increased 14.1% from 6.7
cents
in 1Q07 to 7.7 cents in 1Q08. An overview of the major variances on a
consolidated basis follows:
Aircraft
fuel. For
1Q08,
aircraft fuel totaled US$84.3 million, a US$28.4 million or 50.9% increase
over aircraft fuel of US$55.9 million in 1Q07. This increase was primarily
a result of a 11.7% increase in gallons consumed resulting from increased
capacity and a 35.1% increase in the average price per gallon of jet fuel
(all-in), which net of hedges averaged US$2.82 in 1Q08 as compared to US$2.09
in
1Q07.
Salaries
and benefits. For
1Q08,
salaries and benefits totaled US$34.1 million, a 27.7% increase over
salaries and benefits of US$26.7 million in 1Q07. This increase was mostly
a result of an overall increase in operating headcount to support additional
capacity and the effect of the Colombian currency appreciation.
Passenger
servicing. For
1Q08,
passenger servicing totaled US$23.2 million, a 29.6% increase over passenger
servicing of US$17.9 million in 1Q07. This increase was primarily a result
of an
increase in passengers carried by Copa Airlines, more international service
offered by Aero Republica and the effect of the Colombian currency appreciation.
5
Commissions.
For
1Q08,
commissions totaled US$17.0 million, a 14.5% increase over commissions of
US$14.8 million in 1Q07. This increase was primarily a result of higher
passenger revenue partially offset by lower average commission rates in both
Copa Airlines and Aero Republica.
Reservations
and sales.
Reservations
and sales totaled US$13.3 million, a 20.5% increase over reservation and
sales
of US$11.0 million in 1Q07. This increase was primarily a result of more
passengers carried and additional costs related to global distribution systems
(GDS) at Aero Republica.
Maintenance,
material and repairs. For
1Q08,
maintenance, material and repairs totaled US$17.3 million, a 55.6% increase
over
maintenance, material and repairs of US$11.1 million in 1Q07. This increase
was primarily a result of more major overhaul events scheduled in 1Q08 as
compared to 1Q07.
Depreciation.
Depreciation
totaled US$10.0 million in 1Q08, a 25.1% increase over depreciation of
US$8.0 million in 1Q07. This increase was primarily related to the
depreciation of new aircraft and spares.
Aircraft
Rentals.
Aircraft
rentals totaled US$10.7 million in 1Q08, a 16.5% increase over aircraft rentals
of US$9.2 million in 1Q07. This increase was primarily related to the
addition of new leased Embraer-190 aircraft at Aero Republica
Flight
operations, landing fees and other rentals.
Combined,
flight operations, landing fees and other rentals increased 34.0% from US$15.7
million in 1Q07 to US$21.0 million in 1Q08, primarily as a result of
increased capacity and higher crew related expenses.
Other. Other
expenses totaled US$13.2 million in 1Q08, an increase of 14.3% over US$11.6
million in 1Q07.
| Copa Airlines operating expenses | ||
Copa
Airlines’ operating expenses increased 32.1% to US$184.5 million from US$139.7
million in 1Q07. Operating expenses per available seat mile increased 13.0%
to
10.8 cents in 1Q08 from 9.5 cents in 1Q07. Excluding fuel costs, operating
expenses per available seat mile increased 4.3% from 6.6 cents in 1Q07 to
6.9
cents in 1Q08.
Aircraft
fuel.
For
1Q08,
aircraft fuel totaled US$65.7 million, a 55.5% increase over aircraft fuel
expense of US$42.2 million in the same period in 2007. This increase was
primarily a result of a 18.1% increase in gallons consumed resulting from
increased capacity and a 31.8% increase in the average price per gallon of
jet
fuel (all-in), which net of hedges averaged US$2.77 in 1Q08 as compared to
US$2.09 in 1Q07.
Salaries
and benefits.
For
1Q08,
salaries and benefits totaled US$26.2 million, a 24.1% increase over
salaries and benefits of US$21.1 million in the same period in 2007. This
increase was mainly a result of an overall increase in operating headcount
to
support additional capacity.
Passenger
servicing.
Passenger
servicing totaled US$18.7 million for 1Q08, a 25.0% increase over passenger
servicing of US$15.0 million in 1Q07. This increase was primarily the
result of an increase in passengers carried and higher rates associated to
capacity allocation.
Commissions.
Commissions
totaled US$12.4 million for 1Q08, an 11.2% increase over commissions of
US$11.1 million in 1Q07. This increase was primarily a result of a 20.2%
increase in passenger revenue, partially offset by a lower average commission
rate.
Reservations
and sales.
Reservations
and sales totaled US$10.0 million, a 14.4% increase over reservation and
sales
of US$8.7 million in 1Q07. This increase was primarily a result of more
passengers carried.
Maintenance,
materials and repairs.
Maintenance,
materials and repairs totaled US$9.6 million in 1Q08, a 22.8% increase over
maintenance, materials and repairs of US$7.8 million in 1Q07. This increase
resulted from higher capacity and more major overhaul events during the period.
Depreciation.
Depreciation
totaled US$8.8 million in 1Q08, a 25.3% increase over depreciation of
US$7.0 million in 1Q07, primarily related to depreciation of new aircraft
and spare parts.
Flight
operations,
aircraft rentals, landing fees and other rentals.
Combined,
flight operations, aircraft rentals, landing fees and other rentals increased
26.4% from US$18.7 million in 1Q07 to US$23.7 million in 1Q08, primarily as
a result of increased capacity and higher crew related expenses.
Other.
Other
expenses increased a total of US$1.5 million from US$8.0 million in 1Q07 to
US$9.5 million in 1Q08.
6
| Aero Republica operating expenses | ||
Aero
Republica’s operating expenses increased 45.1% to US$62.6 million in 1Q08 from
US$43.1 million in 1Q07. Operating expenses per available seat mile (CASM)
increased 60.7% to 17.3 cents in 1Q08 from 10.8 cents in 1Q07. CASM, excluding
fuel costs, increased 65.0% from 7.4 cents in 1Q07 to 12.1 cents in 1Q08,
mainly
due additional aircraft and engine maintenance events related to the MD-80
fleet, a stronger Colombian currency and the effect of the down gauge to
an
Embraer-190 fleet.
Non-operating
income (expense)
Consolidated
non-operating expenses totaled a net expense of US$8.1 million in 1Q08, a
3.0% increase over non-operating expenses of US$7.9 million in 1Q07.
Interest
expense.
Interest expense totaled US$11.0 million in 1Q08, an 11.5% increase over
interest expense of US$9.8 million in 1Q07, mostly as a result of increased
aircraft related debt.
Interest
capitalized.
Interest capitalized totaled US$0.5 million in 1Q08, a 1.9% decrease over
1Q07.
Interest
income. Interest
income totaled US$2.8 million, an 8.9% increase over interest income of US$2.5
million in 1Q07, mostly a result of increased cash, cash equivalents and
investments.
Other,
net. Other
net
totaled an expense of US$0.4 million in 1Q08.
About
Copa Holdings
Copa
Holdings, through its Copa Airlines and Aero Republica operating subsidiaries,
is a leading Latin American provider of international airline passenger and
cargo service. Copa Airlines currently offers approximately 116 daily scheduled
flights to 41 destinations in 22 countries in North, Central and South America
and the Caribbean. In addition, Copa Airlines provides passengers with
access to flights to more than 120 other international destinations through
code
share agreements with Continental Airlines and other airlines. Aero Republica,
the second-largest domestic carrier in Colombia, provides service to 12 cities
in Colombia as well as international connectivity with Copa Airlines’ Hub of the
Americas through flights from Bogota, Bucaramanga, Cali, Cartagena and
Medellin.
CONTACT:
Copa
Holdings S.A.
Investor
Relations:
Ph:
(507) 304-2677
e-mail:
investorrelations@copaair.com
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.
This
press release shall not constitute an offer to sell or the solicitation of
an
offer to buy any securities. There shall be no sale of any securities in
any
jurisdiction in which such offer; solicitation or sale would be unlawful
prior
to registration under the securities laws of such jurisdiction.
7
|
Copa
Holdings, S.A.
|
|
|
|
|
|
|||||||||||
|
Operating
data
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|||||||||||
|
|
Unaudited
|
Unaudited
|
%
|
Unaudited
|
%
|
|||||||||||
|
|
1Q08
|
1Q07
|
Change
|
4Q07
|
Change
|
|||||||||||
|
|
|
|
|
|
|
|||||||||||
|
Copa
Holdings (Consolidated)
|
|
|
|
|
|
|||||||||||
|
Revenue
passengers carried (thousands)
|
1,217
|
1,121
|
8.6
|
%
|
1,249
|
-2.6
|
%
|
|||||||||
|
Revenue
passengers miles (RPMs) (mm)
|
1,619
|
1,427
|
13.5
|
%
|
1,524
|
6.3
|
%
|
|||||||||
|
Available
seat miles (ASMs) (mm)
|
2,077
|
1,868
|
11.2
|
%
|
2,066
|
0.5
|
%
|
|||||||||
|
Load
factor
|
78.0
|
%
|
76.4
|
%
|
1.6
p.p.
|
73.8
|
%
|
4.2
p.p.
|
||||||||
|
Break-even
load factor
|
64.3
|
%
|
54.3
|
%
|
10.0
p.p.
|
60.2
|
%
|
4.1
p.p.
|
||||||||
|
Yield
(cents)
|
17.3
|
16.1
|
7.2
|
%
|
17.5
|
-0.9
|
%
|
|||||||||
|
RASM
(cents)
|
14.2
|
13.0
|
9.6
|
%
|
13.8
|
3.4
|
%
|
|||||||||
|
CASM
(cents)
|
11.8
|
9.7
|
20.7
|
%
|
11.7
|
0.6
|
%
|
|||||||||
|
Adj.CASM
- excl. special charges and fuel (cents)
|
7.7
|
6.7
|
14.1
|
%
|
7.6
|
1.4
|
%
|
|||||||||
|
Fuel
gallons consumed (mm)
|
29.6
|
26.5
|
11.7
|
%
|
29.5
|
0.2
|
%
|
|||||||||
|
Average
price of Fuel - Net of Hedges (US$)
|
2.82
|
2.09
|
35.1
|
%
|
2.61
|
8.1
|
%
|
|||||||||
|
|
||||||||||||||||
|
Copa
Segment
|
||||||||||||||||
|
Revenue
passengers miles (RPMs) (mm)
|
1,393
|
1,209
|
15.2
|
%
|
1,276
|
9.2
|
%
|
|||||||||
|
Available
seat miles (ASMs) (mm)
|
1,715
|
1,468
|
16.9
|
%
|
1,676
|
2.4
|
%
|
|||||||||
|
Load
factor
|
81.2
|
%
|
82.4
|
%
|
-1.2
p.p.
|
76.1
|
%
|
5.1
p.p.
|
||||||||
|
Break-even
load factor
|
62.2
|
%
|
56.2
|
%
|
5.9
p.p.
|
57.7
|
%
|
4.5
p.p.
|
||||||||
|
Yield
(US$ cents)
|
16.0
|
15.4
|
4.3
|
%
|
16.2
|
-1.3
|
%
|
|||||||||
|
RASM
(cents)
|
13.8
|
13.4
|
3.1
|
%
|
13.3
|
4.1
|
%
|
|||||||||
|
CASM
(cents)
|
10.8
|
9.5
|
13.0
|
%
|
10.7
|
0.2
|
%
|
|||||||||
|
CASM
- excl. fuel (cents)
|
6.9
|
6.6
|
4.3
|
%
|
7.2
|
-3.2
|
%
|
|||||||||
|
Fuel
gallons consumed (mm)
|
23.5
|
19.9
|
18.1
|
%
|
22.9
|
2.4
|
%
|
|||||||||
|
Average
price of Fuel - Net of Hedges (US$)
|
2.76
|
2.09
|
31.8
|
%
|
2.56
|
7.8
|
%
|
|||||||||
|
|
||||||||||||||||
|
Aero
Republica Segment
|
||||||||||||||||
|
Revenue
passengers miles (RPMs) (mm)
|
226
|
218
|
3.9
|
%
|
248
|
-8.8
|
%
|
|||||||||
|
Available
seat miles (ASMs) (mm)
|
361
|
400
|
-9.7
|
%
|
391
|
-7.5
|
%
|
|||||||||
|
Load
factor
|
62.6
|
%
|
54.4
|
%
|
8.2
p.p.
|
63.5
|
%
|
-0.9
p.p.
|
||||||||
|
Break-even
load factor
|
67.5
|
%
|
54.3
|
%
|
13.2
p.p.
|
64.0
|
%
|
3.5
p.p.
|
||||||||
|
Yield
(cents)
|
25.2
|
20.5
|
23.1
|
%
|
23.8
|
5.8
|
%
|
|||||||||
|
RASM
(cents)
|
17.1
|
11.7
|
45.9
|
%
|
16.6
|
3.1
|
%
|
|||||||||
|
CASM
(cents)
|
17.3
|
10.8
|
60.7
|
%
|
16.4
|
5.3
|
%
|
|||||||||
|
Adj.CASM
- excl. special charges and fuel (cents)
|
12.1
|
7.4
|
65.0
|
%
|
10.1
|
20.1
|
%
|
|||||||||
|
Fuel
gallons consumed (mm)
|
6.1
|
6.6
|
-7.6
|
%
|
6.6
|
-7.7
|
%
|
|||||||||
|
Average
price of Fuel - Net of Hedges (US$)
|
3.07
|
2.08
|
47.8
|
%
|
2.79
|
10.0
|
%
|
|||||||||
8
|
Copa
Holdings, S.A.
|
|
|
|
|
|
||||||||||||
|
Income
Statement - USGAAP
|
|
|
|
|
|
||||||||||||
|
(US$
Thousands)
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
||||||||||||
|
|
Unaudited
|
Unaudited
|
%
|
Unaudited
|
%
|
||||||||||||
|
|
1Q08
|
1Q07
|
Change
|
4Q07
|
Change
|
||||||||||||
|
Operating
Revenues
|
|
|
|
|
|
||||||||||||
|
Passenger
Revenue
|
280,224
|
230,271
|
21.7
|
%
|
266,228
|
5.3
|
%
|
||||||||||
|
Cargo,
mail and other
|
15,662
|
12,479
|
25.5
|
%
|
18,359
|
-14.7
|
%
|
||||||||||
|
Total
Operating Revenue
|
295,886
|
242,750
|
21.9
|
%
|
284,587
|
4.0
|
%
|
||||||||||
|
|
|||||||||||||||||
|
Operating
Expenses
|
|||||||||||||||||
|
Aircraft
fuel
|
84,344
|
55,912
|
50.9
|
%
|
78,400
|
7.6
|
%
|
||||||||||
|
Salaries
and benefits
|
34,147
|
26,749
|
27.7
|
%
|
32,152
|
6.2
|
%
|
||||||||||
|
Passenger
servicing
|
23,235
|
17,932
|
29.6
|
%
|
23,052
|
0.8
|
%
|
||||||||||
|
Commissions
|
16,961
|
14,813
|
14.5
|
%
|
18,488
|
-8.3
|
%
|
||||||||||
|
Reservations
and sales
|
13,256
|
10,997
|
20.5
|
%
|
12,039
|
10.1
|
%
|
||||||||||
|
Maintenance,
material and repairs
|
17,323
|
11,134
|
55.6
|
%
|
13,376
|
29.5
|
%
|
||||||||||
|
Depreciation
|
10,000
|
7,994
|
25.1
|
%
|
9,821
|
1.8
|
%
|
||||||||||
|
Flight
operations
|
12,979
|
9,410
|
37.9
|
%
|
12,394
|
4.7
|
%
|
||||||||||
|
Aircraft
rentals
|
10,673
|
9,163
|
16.5
|
%
|
9,692
|
10.1
|
%
|
||||||||||
|
Landing
fees and other rentals
|
8,008
|
6,256
|
28.0
|
%
|
7,629
|
5.0
|
%
|
||||||||||
|
Other
|
13,246
|
11,590
|
14.3
|
%
|
18,253
|
-27.4
|
%
|
||||||||||
|
Special
fleet charges
|
-
|
-
|
-
|
6,300
|
-100.0
|
%
|
|||||||||||
|
Total
Operating Expense
|
244,171
|
181,951
|
34.2
|
%
|
241,596
|
1.1
|
%
|
||||||||||
|
|
|||||||||||||||||
|
Operating
Income
|
51,715
|
60,799
|
-14.9
|
%
|
42,991
|
20.3
|
%
|
||||||||||
|
|
|||||||||||||||||
|
Non-operating
Income (Expense):
|
|||||||||||||||||
|
Interest
expense
|
(10,980
|
)
|
(9,848
|
)
|
11.5
|
%
|
(12,567
|
)
|
-12.6
|
%
|
|||||||
|
Interest
capitalized
|
521
|
531
|
-1.9
|
%
|
584
|
-10.8
|
%
|
||||||||||
|
Interest
income
|
2,768
|
2,542
|
8.9
|
%
|
3,361
|
-17.6
|
%
|
||||||||||
|
Other,
net
|
(420
|
)
|
(1,097
|
)
|
nm
|
6,215
|
-106.8
|
%
|
|||||||||
|
Total
Non-Operating Income/(Expense)
|
(8,111
|
)
|
(7,872
|
)
|
3.0
|
%
|
(2,407
|
)
|
237.0
|
%
|
|||||||
|
|
|||||||||||||||||
|
Income
before Income Taxes
|
43,604
|
52,927
|
-17.6
|
%
|
40,584
|
7.4
|
%
|
||||||||||
|
|
|||||||||||||||||
|
Provision
for Income Taxes
|
4,104
|
4,361
|
-5.9
|
%
|
5,058
|
-18.9
|
%
|
||||||||||
|
|
|||||||||||||||||
|
Net
Income
|
39,499
|
48,567
|
-18.7
|
%
|
35,526
|
11.2
|
%
|
||||||||||
|
|
|||||||||||||||||
|
|
|||||||||||||||||
|
Basic
EPS
|
0.92
|
1.13
|
-19.0
|
%
|
0.83
|
11.1
|
%
|
||||||||||
|
Basic
Shares
|
42,985,220
|
42,816,678
|
0.4
|
%
|
42,937,844
|
0.1
|
%
|
||||||||||
|
|
|||||||||||||||||
|
Diluted
EPS
|
0.91
|
1.12
|
-18.6
|
%
|
0.82
|
11.1
|
%
|
||||||||||
|
Diluted
Shares
|
43,432,584
|
43,449,121
|
0.0
|
%
|
43,401,305
|
0.1
|
%
|
||||||||||
9
|
Copa
Holdings, S.A.
|
|
|
|
|||||||
|
Balance
Sheet - USGAAP
|
|
|
||||||||
|
(US$
Thousands)
|
March
31,
|
December
31,
|
March
31,
|
|||||||
|
|
2008
|
2007
|
2007
|
|||||||
|
|
(Unaudited)
|
(Audited)
|
(Unaudited)
|
|||||||
|
ASSETS
|
|
|
|
|||||||
|
Current
Assets:
|
|
|
|
|||||||
|
Cash
and cash equivalents
|
$
|
234,593
|
$
|
285,858
|
$
|
190,158
|
||||
|
Short-term
investments
|
70,500
|
22,500
|
27,500
|
|||||||
|
Total
cash, cash equivalents and short-term investments
|
305,093
|
308,358
|
217,658
|
|||||||
|
|
||||||||||
|
Accounts
receivable, net of allowance for doubtful accounts
|
84,194
|
73,389
|
80,628
|
|||||||
|
Accounts
receivable from related parties
|
3,462
|
780
|
2,270
|
|||||||
|
Expendable
parts and supplies, net of allowance for obsolescence
|
16,526
|
14,088
|
9,748
|
|||||||
|
Prepaid
expenses
|
25,317
|
25,574
|
19,017
|
|||||||
|
Other
current assets
|
15,593
|
13,547
|
8,015
|
|||||||
|
Total
Current Assets
|
450,185
|
432,358
|
337,336
|
|||||||
|
|
||||||||||
|
Long-term
investments
|
17,538
|
17,038
|
26,036
|
|||||||
|
|
||||||||||
|
Property
and Equipment:
|
||||||||||
|
Owned
property and equipment:
|
||||||||||
|
Flight
equipment
|
1,195,518
|
1,188,641
|
948,680
|
|||||||
|
Other
equipment
|
53,352
|
50,909
|
44,065
|
|||||||
|
|
1,248,870
|
1,239,550
|
992,745
|
|||||||
|
Less:
Accumulated depreciation
|
(147,667
|
)
|
(137,367
|
)
|
(111,181
|
)
|
||||
|
|
1,101,203
|
1,102,183
|
881,564
|
|||||||
|
Purchase
deposits for flight equipment
|
74,046
|
64,079
|
73,849
|
|||||||
|
Total
Property and Equipment
|
1,175,249
|
1,166,262
|
955,413
|
|||||||
|
|
||||||||||
|
Other
Assets:
|
||||||||||
|
Net
pension asset
|
1,171
|
1,034
|
759
|
|||||||
|
Goodwill
|
26,767
|
24,201
|
21,392
|
|||||||
|
Intangible
asset
|
39,247
|
35,484
|
32,640
|
|||||||
|
Other
assets
|
30,604
|
27,496
|
16,233
|
|||||||
|
Total
Other Assets
|
97,789
|
88,215
|
71,024
|
|||||||
|
Total
Assets
|
$
|
1,740,761
|
$
|
1,707,251
|
$
|
1,389,809
|
||||
|
|
||||||||||
|
|
||||||||||
|
LIABILITIES
AND SHAREHOLDER'S EQUITY
|
||||||||||
|
Current
Liabilities:
|
||||||||||
|
Current
maturities of long-term debt
|
$
|
96,243
|
$
|
110,658
|
$
|
103,154
|
||||
|
Accounts
payable
|
51,193
|
57,468
|
47,799
|
|||||||
|
Accounts
payable to related parties
|
9,439
|
10,824
|
8,242
|
|||||||
|
Air
traffic liability
|
150,383
|
153,422
|
116,730
|
|||||||
|
Taxes
and interest payable
|
34,397
|
36,644
|
34,688
|
|||||||
|
Accrued
expenses payable
|
57,342
|
52,233
|
33,317
|
|||||||
|
Other
current liabilities
|
4,631
|
3,740
|
2,836
|
|||||||
|
Total
Current Liabilities
|
403,628
|
424,989
|
346,766
|
|||||||
|
|
||||||||||
|
Non-Current
Liabilities:
|
||||||||||
|
Long-term
debt
|
739,886
|
732,209
|
599,851
|
|||||||
|
Post
employment benefits liability
|
1,866
|
1,894
|
1,792
|
|||||||
|
Other
long-term liabilities
|
10,273
|
9,775
|
8,023
|
|||||||
|
Deferred
tax liabilities
|
8,119
|
6,747
|
4,933
|
|||||||
|
Total
Non-Current Liabilities
|
760,144
|
750,625
|
614,599
|
|||||||
|
|
|
|
|
|||||||
|
Total
Liabilities
|
1,163,772
|
1,175,614
|
961,365
|
|||||||
|
|
||||||||||
|
Shareholders'
Equity:
|
||||||||||
|
Class
A - 30,416,440 shares issued and outstanding
|
20,761
|
20,586
|
20,586
|
|||||||
|
Class
B - 12,778,125 shares issued and outstanding
|
8,722
|
8,722
|
8,722
|
|||||||
|
Additional
paid in capital
|
10,037
|
8,064
|
3,473
|
|||||||
|
Retained
earnings
|
531,098
|
491,599
|
392,816
|
|||||||
|
Accumulated
other comprehensive loss
|
6,371
|
2,666
|
2,847
|
|||||||
|
Total
Shareholders' Equity
|
576,989
|
531,637
|
428,444
|
|||||||
|
Total
Liabilities and Shareholders' Equity
|
$
|
1,740,761
|
$
|
1,707,251
|
$
|
1,389,809
|
||||
10
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)
|
1Q08
|
1Q07
|
4Q07
|
|||||||
|
Net
Income
|
$
|
39,499
|
$
|
48,566
|
$
|
35,526
|
||||
|
|
||||||||||
|
Interest
Expense
|
(10,980
|
)
|
(9,848
|
)
|
(12,567
|
)
|
||||
|
Capitalized
Interest
|
521
|
531
|
584
|
|||||||
|
Interest
Income
|
2,768
|
2,542
|
3,361
|
|||||||
|
Income
Taxes
|
(4,104
|
)
|
(4,361
|
)
|
(5,058
|
)
|
||||
|
EBIT
|
51,295
|
59,703
|
49,206
|
|||||||
|
|
||||||||||
|
Depreciation
and Amortization
|
10,000
|
7,995
|
9,821
|
|||||||
|
EBITDA
|
61,295
|
67,697
|
59,027
|
|||||||
|
|
||||||||||
|
Aircraft
Rent
|
10,673
|
9,163
|
9,692
|
|||||||
|
Other
Rentals
|
3,883
|
2,685
|
3,461
|
|||||||
|
EBITDAR
|
$
|
71,981
|
$
|
79,546
|
$
|
72,180
|
||||
|
|
||||||||||
|
Special
Charges
|
-
|
-
|
6,300
|
|||||||
|
Non-recurring
gain
|
-
|
-
|
-
|
|||||||
|
Adjusted
EBITDAR
|
$
|
75,851
|
$
|
70,272
|
$
|
78,281
|
||||
|
|
||||||||||
|
|
||||||||||
|
|
||||||||||
|
EARNINGS
PER SHARE
|
4Q07
|
|
|
4Q06
|
|
|
4Q07
|
|||
|
Diluted
Earnings per Share
|
$
|
0.91
|
$
|
1.12
|
$
|
0.82
|
||||
|
|
||||||||||
|
Adjustments:
|
||||||||||
|
Special
Charges
|
-
|
-
|
0.15
|
|||||||
|
Adjusted
Diluted EPS
|
$
|
0.91
|
$
|
1.12
|
$
|
0.96
|
||||
|
|
||||||||||
|
|
||||||||||
|
|
||||||||||
|
CASM
(cents)
|
4Q07
|
|
|
4Q06
|
|
|
4Q07
|
|||
|
Cost
per available seat mile (CASM)
|
$
|
11.8
|
$
|
9.7
|
$
|
11.7
|
||||
|
|
||||||||||
|
Less:
Special Charges per ASM
|
-
|
-
|
(0.3
|
)
|
||||||
|
Adjusted
CASM
|
$
|
11.8
|
$
|
9.7
|
$
|
11.4
|
||||
|
|
||||||||||
|
Less:
Fuel Cost per ASM
|
(4.1
|
)
|
(3.0
|
)
|
(3.8
|
)
|
||||
|
Adjusted
CASM Excluding Fuel
|
$
|
7.7
|
$
|
6.7
|
$
|
7.6
|
||||
11
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned, hereunto
duly authorized.
|
Copa
Holdings, S.A.
|
||
|
|
(Registrant)
|
|
|
Date:
5/8/2008
|
||
|
By:
|
/s/ Victor
Vial
|
|
|
Name:
|
Victor
Vial
|
|
|
Title:
|
CFO
|
|