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 August,
2008
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- )
Enclosure:
Press
Release - Copa
Holdings Reports Earnings of US$30.4 Million and EPS of US$0.70 for
2Q08
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.
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Copa
Holdings, S.A.
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(Registrant)
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Date:
08/14/2008
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By:
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/s/ Victor
Vial
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Name:
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Victor
Vial
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Title:
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CFO
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Copa
Holdings Reports Earnings of US$30.4 Million and EPS of US$0.70 for 2Q08
PANAMA
CITY, Aug. 14 /PRNewswire-FirstCall/ -- Copa Holdings, S.A. (NYSE: CPA),
parent company of Copa Airlines and Aero Republica, today announced financial
results for the second quarter of 2008 (2Q08). The terms “Copa Holdings" or "the
Company" refer to the consolidated entity, whose operating subsidiaries are
Copa
Airlines and Aero Republica. The following financial and operating information,
unless otherwise indicated, is presented in accordance with US GAAP. Unless
otherwise stated, all comparisons with prior periods refer to the second
quarter
of 2007 (2Q07).
OPERATING
AND FINANCIAL HIGHLIGHTS
| · |
Copa
Holdings reported net income of US$30.4 million for 2Q08, or diluted
earnings per share (EPS) of US$0.70, as compared to net income of
US$30.9
million or diluted EPS of US$0.71 in 2Q07.
|
| · |
Operating
income for 2Q08 came in at US$31.2 million, as compared to operating
income of US$39.0 million for 2Q07. Operating margin decreased from
16.6% to 10.5%, maintaining its position among the world’s most profitable
airlines. These strong results were achieved despite US$37.0 million
in
additional fuel costs as a result of a 56% increase in the all-in
average
price per gallon of jet fuel.
|
| · |
In
2Q08, total revenues increased to US$297.9 million, representing
growth of
26.6 %, on an 11.3% capacity expansion. Yield per passenger mile
increased
9.6% to 18.0 cents and operating revenue per available seat mile
(RASM)
increased 13.7% to 14.2 cents.
|
| · |
Revenue
passenger miles (RPMs) increased 15.8% from 1.35 billion in 2Q07
to 1.56
billion in 2Q08, and available seat miles (ASMs) increased 11.3%
from 1.88
billion in 2Q07 to 2.09 billion in 2Q08, with the Copa Airlines segment
increasing 17.2% year-over-year and Aero Republica decreasing 10.2%,
mainly as a result of its down-gauge to an Embraer-190 fleet.
|
| · |
Consolidated
load factor increased 2.9 percentage points to 74.5%, driven by a
year-over-year load factor improvement at both Copa Airlines and
Aero
Republica.
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| · |
Operating
cost per available seat mile (CASM) increased 22.1%, from 10.4 cents
in
2Q07 to 12.7 cents in 2Q08. CASM, excluding fuel costs, increased
6.9%
from 7.3 cents in 2Q07 to 7.8 cents in 2Q08, 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$347.2 million, representing 30% of
last
twelve months revenues.
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| · |
On
May 24, Aero Republica continued its international expansion by initiating
new direct daily service to Caracas, Venezuela, from the Colombian
cities
of Bogota and Medellin. Aero Republica currently provides service
to 12
cities in Colombia as well as international connectivity with Copa
Airlines' Hub of the Americas from the cities of Bogota, Bucaramanga,
Cali, Cartagena and Medellin.
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| · |
On
June 30, Copa Airlines announced that it will begin service from
Panama
and connecting cities to Belo Horizonte, Brazil,
beginning August 21, 2008. More recently, Copa Airlines announced
new
service to three additional destinations: Oranjestad (Aruba), Valencia
(Venezuela) and Santa Cruz (Bolivia). By year-end, Copa Airlines'
network
is expected to serve 45 destinations in 24 countries in the
Americas.
|
| · |
During
the second quarter, Copa Airlines took delivery of three aircraft,
two
Embraer-190’s and one Boeing 737-800, ending the quarter with 40 aircraft.
Copa Holdings ended the second quarter with a consolidated fleet
of 53
aircraft.
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| · |
For
2Q08, Copa Airlines reported an on-time performance of 89.3% and
a
flight-completion factor of 99.7%, maintaining its position among
the best
in the industry.
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Consolidated
Financial & Operating Highlights
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2Q08
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2Q07
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%
Change
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1Q08
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%
Change
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|||||||||||
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RPMs
(millions)
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1,559
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1,346
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15.8
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%
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1,619
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-3.8
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%
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|||||||||
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ASMs
(mm)
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2,093
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1,880
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11.3
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%
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2,077
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0.8
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%
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|||||||||
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Load
Factor
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74.5
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%
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71.6
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%
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2.9
p.p.
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78.0
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%
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-3.5
p.p.
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||||||||
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Yield
|
18.0
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16.4
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9.6
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%
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17.3
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4.1
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%
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|||||||||
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PRASM
(cents)
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13.4
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11.8
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14.1
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%
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13.5
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-0.5
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%
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|||||||||
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RASM
(cents)
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14.2
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12.5
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13.7
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%
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14.2
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-0.1
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%
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|||||||||
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CASM
(cents)
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12.7
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10.4
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22.1
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%
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11.8
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8.4
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%
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|||||||||
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CASM
Excl. Fuel (cents)
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7.8
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7.3
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6.9
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%
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7.7
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0.9
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%
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|||||||||
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Breakeven
Load Factor
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64.6
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%
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59.3
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%
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5.3
p.p.
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64.6
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%
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0.0
p.p.
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||||||||
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Operating
Revenues (US$ mm)
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297.9
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235.3
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26.6
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%
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295.9
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0.7
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%
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|||||||||
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EBITDAR
(US$ mm) (1)
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66.7
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61.7
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8.1
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%
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75.9
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-12.1
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%
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|||||||||
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EBITDAR
Margin (1)
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22.4
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%
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26.2
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%
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-3.8
p.p.
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25.6
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%
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-3.2
p.p.
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||||||||
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Operating
Income (US$ mm)
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31.2
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39.0
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-20.0
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%
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51.7
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-39.7
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%
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|||||||||
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Operating
Margin
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10.5
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%
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16.6
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%
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-6.1
p.p.
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17.5
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%
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-7.0
p.p.
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||||||||
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Net
Income (US$ mm)
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30.4
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30.9
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-1.5
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%
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39.5
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-23.0
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%
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|||||||||
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Net
Margin
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10.2
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%
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13.1
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%
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-2.9
p.p.
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13.3
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%
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-3.1
p.p.
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||||||||
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EPS
- Basic (US$)
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0.70
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0.72
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-2.4
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%
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0.92
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-23.3
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%
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|||||||||
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EPS
- Diluted (US$)
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0.70
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0.71
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-1.5
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%
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0.91
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-23.0
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%
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|||||||||
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Weighted
Avg. # of Shares - Basic (000)
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43,195
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42,817
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0.9
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%
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42,985
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0.5
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%
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|||||||||
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Weighted
Avg. # of Shares - Diluted (000)
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43,465
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43,502
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-0.1
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%
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43,433
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0.1
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%
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|||||||||
(1)
EBITDAR
(earnings before interest, taxes, depreciation, amortization and rent) is
presented as supplemental information 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. However, EBITDAR
should not be considered in isolation, as a substitute for net income prepared
in accordance with US GAAP or as a measure of a company’s profitability. In
addition, our calculations may not be comparable to other similarly titled
measures of other companies. A reconciliation of EBITDAR to consolidated
net
income is attached to this press release.
MANAGEMENT’S
COMMENTS ON 2Q08 RESULTS
Copa
Holdings second quarter performance once again highlighted the company’s ability
to deliver strong earnings, despite a record fuel price environment. For
2Q08
the company recorded operating income of US$31.2 million and net income of
US$30.4 million. Operating margin decreased 6.1 percentage points from 16.6%
to
10.5%, as a result of increased fuel prices.
Total
revenues increased 26.6% during the quarter, significantly outpacing capacity
expansion of 11.3%, which led to an 11.7% increase in revenues per ASM (RASM)
from 12.5 cents to 14.2 cents. Passenger revenues, which represented 94%
of
total revenues, increased 27.0% to US$280.9 million, due to an 11.3% increase
in
capacity and a 14.1% increase in passenger revenue per ASM. The latter was
driven by a 9.6% increase in yield and a 2.9 percentage point increase in
consolidated load factor from 71.6% to 74.5%.
In
2Q08,
Copa Airlines’ yields came in at 16.6 cents, representing an increase of 9.4%
compared to 2Q07. Copa Airlines yields increased mainly as a result of strong
demand and revenue management initiatives that resulted in increased fares
and
higher fuel surcharges. Aero Republica’s yields increased 18.5% to 27.3 cents
and continued to benefit mostly from a stronger Colombian currency and increased
capacity in higher yielding international flights.
2
Consolidated
operating expenses for 2Q08 increased 35.9% to US$266.7 million, while
consolidated operating expenses per ASM (CASM) increased 22.1% to 12.7 cents.
Incremental fuel costs as a result of higher fuel prices totaled US$37.0
million. Excluding fuel costs, unit costs increased 6.9% to 7.8 cents, mostly
as
a result of an increase in Aero Republica’s unit cost mainly driven by timing of
major overhaul events related to their MD-80 fleet, Colombian currency
appreciation and down-gauging to an Embraer-190 fleet.
Aircraft
fuel reached unprecedented prices during the quarter, representing 39% of
consolidated operating expenses as compared to 30% in 2Q07. Jet fuel prices,
net
of hedges, increased 56.2% from an average of US$2.22 in 2Q07 to US$3.47
in
2Q08. For 2Q08, the Company had fuel hedges in place representing 18% of
its consolidated volume. Continuing with the execution of its fuel hedge
policy,
the company currently has hedged approximately 25% of its consolidated fuel
requirements for the second half of 2008. Additionally, the Company currently
has hedged 25%, 19% and 10% of its consolidated volume for 1Q09, 2Q09 and
3Q09
respectively.
The
Company recorded a US$2.7 million non-operating gain for 2Q08 compared to
a
US$4.3 million non-operating loss in 2Q07. This gain resulted mainly from
the
mark-to-market of fuel and currency hedge contracts which for 2Q08 resulted
in
unrealized gains of US$5.7 million and US$3.0 million respectively, as compared
to an expense of US$0.1 million and US$4.0 million in 2Q07,
respectively.
The
Company maintains a solid liquidity position, which includes US$20 million
in
committed credit lines for a total of US$347.2 million in 2Q08, representing
approximately 30% of the last twelve-months´ revenues. During the same period,
total debt amounted to US$896.3 million, which relates for the most part
to
aircraft and equipment financing.
For
2Q08,
Aero Republica recorded an operating loss of US$2.8 million, compared to
operating income of US$2.5 million in 2Q07, as a result of higher fuel prices
and more scheduled maintenance events related to its MD-80 fleet. The airline
continues to focus on its international expansion and fleet transition strategy
aimed at replacing its MD-80 fleet with modern and fuel efficient Embraer-190
aircraft by 2009.
Aero
Republica’s capacity, in terms of ASMs flown in Embraer-190 aircraft as a
percentage of its total capacity, increased from 18.9% in 2Q07 to 51.8% in
2Q08. Additionally, as part of its international expansion Aero
Republica’s international capacity more than doubled year-over-year reaching
18.8% of total capacity during 2Q08 as compared to 9.2% in 2Q07.
Copa
Holdings’ strong second quarter results and strong balance sheet underscore its
ability to operate profitably and grow in a challenging fuel price environment.
Going forward, Copa Airlines will keep on strengthening and expanding its
network with the delivery of three 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 - 9 Embraer-190’s and 4 MD-80’s. On a
consolidated basis, Copa Holdings is expected to end 2008 with a consolidated
fleet 56 aircraft.
3
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.
For
the
second half of 2008, Copa Holdings expects a healthy demand environment,
driven
by regional economic growth and the growing preference for its network and
services. In light of a continued high fuel price environment and adjustments
in
our operational plan, we have revised our 2008 full year guidance as
follows:
| · |
Capacity,
measured in ASMs, is reduced from 9.1 billion to 8.8 billion ASMs,
mainly
as a result of capacity optimization and a later than expected launch
of
new service. The current capacity growth forecast represents
year-over-year consolidated growth of approximately 11%, with Copa
Airlines’ year-over-year growth expected at 17% while Aero Republica´s
capacity will decrease approximately 9%.
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| · |
Average
load factor
is
expected to come in at 76%, up from previous guidance of 75% and
compared
to 74% in 2007, as demand is projected to remain robust for the remainder
of the year.
|
| · |
RASM
is
expected to come in at approximately 14.5 cents, up from the previous
guidance of 14.2 cents and compared to 13.0 cents in
2007.
|
| · |
CASM
Ex-fuel
is
projected to remain unchanged from previous guidance at 7.5.cents,
up from
7.1 cents in 2007.
|
| · |
Operating
margin
is
projected to remain unchanged in the range of 15-17%, though as a
result
of an increase in the estimated price of jet fuel for the year, from
an
average price per gallon of $2.98 to $3.17 (US Gulf Coast), the Company
now expects to come in at the lower end of this
range.
|
|
Financial
Outlook
(US
GAAP)
|
2008
- Full Year
Prior
|
2008
- Full Year
Revised
|
2007
Actual
|
|||||||
|
ASMs
(billion)
|
+/-9.1
|
+/-8.8
|
7.9
|
|||||||
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Average
Load Factor
|
+/-75
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%
|
+/-76
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%
|
74
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%
|
||||
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RASM
(cents)
|
+/-14.2
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+/-14.5
|
13.0
|
|||||||
|
CASM
Ex-fuel (cents)
|
+/-
7.5
|
+/-
7.5
|
7.1
|
|||||||
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Operating
Margin
|
15-17
|
%
|
15-17
|
%
|
19.2
|
|||||
CONSOLIDATED
SECOND QUARTER RESULTS
Operating
revenue
Consolidated
revenue for 2Q08 totaled US$297.9 million, a 26.6% or US$62.6 million
increase over operating revenue of US$235.3 million in 2Q07, mainly due to
a 30.8% or US$56.8 million increase in Copa Airlines’ operating revenue and a
16.4% or US$8.5 million increase in Aero Republica’s operating
revenue.
Copa
Airlines operating
revenue
Copa
Airlines operating revenue for 2Q08 totaled US$240.8 million, a 30.8% increase
over operating revenue of US$184.1 million in 2Q07. This increase was
primarily due to a 30.8% or US$53.2 million increase in passenger revenue.
4
Passenger
revenue. For
2Q08
passenger revenue totaled US$225.7 million, a 30.8% increase over passenger
revenue of US$172.5 million in 2Q07 as ASMs increased by 17.2% in 2Q08 as
compared to 2Q07. Passenger yield increased 9.4% to 16.6 cents, while load
factor increased from 76.7% in 2Q07 to 78.3% in 2Q08.
Cargo,
mail and other. Cargo,
mail and other revenue totaled US$15.1 million in 2Q08, a 30.9% increase
over
cargo, mail and other of US$11.5 million in 2Q07.
Aero
Republica operating
revenue
During
2Q08, Aero Republica generated operating revenue of US$60.3 million,
representing a 16.4% increase over 2Q07. This increase resulted mainly from
a
US$6.5 million or 13.4% increase in passenger revenue. During the quarter
Aero
Republica’s capacity (ASMs) decreased by 10.2% mainly as a result of the
down-gauge from an MD-80 fleet to an Embraer-190 fleet, while traffic (RPMs)
decreased 4.3%, resulting in a load factor of 56.0% or 3.4 percentage points
above 2Q07. Yields increased by 18.5% primarily due to the strengthening
of the
Colombian currency and increased capacity in higher yielding international
routes.
Operating
expenses
For
2Q08,
consolidated operating expenses rose 35.9% to US$266.7 million, representing
operating cost per available seat mile (CASM) of 12.7 cents. Operating cost
per
available seat mile (CASM), excluding fuel costs, increased 6.9% from 7.3
cents
in 2Q07 to 7.8 cents in 2Q08. An overview of the major variances on a
consolidated basis follows:
Aircraft
fuel. For
2Q08,
aircraft fuel totaled US$104.2 million, a US$44.5 million or 74.6% increase
over aircraft fuel of US$59.7 million in 2Q07. This increase was primarily
a result of a 11.7% increase in gallons consumed resulting from increased
capacity and a 56.1% increase in the average price per gallon of jet fuel
(all-in), which net of hedges averaged US$3.47 in 2Q08 as compared to US$2.22
in
2Q07.
Salaries
and benefits. For
2Q08,
salaries and benefits totaled US$32.6 million, a 13.1% increase over
salaries and benefits of US$28.8 million in 2Q07. 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
2Q08,
passenger servicing totaled US$23.4 million, a 22.9% increase over passenger
servicing of US$19.0 million in 2Q07. 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.
Commissions.
For
2Q08,
commissions totaled US$17.8 million, a 6.0% increase over commissions of
US$16.8 million in 2Q07. 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$14.5 million, a 19.5% increase over reservation and
sales
of US$12.1 million in 2Q07. This increase was primarily a result of more
passengers carried by Copa Airlines.
Maintenance,
material and repairs. For
2Q08,
maintenance, material and repairs totaled US$16.2 million, a 21.2% increase
over
maintenance, material and repairs of US$13.4 million in 2Q07. This increase
was primarily a result of more major overhaul events scheduled in Aero
Republica.
Depreciation.
Depreciation
totaled US$10.4 million in 2Q08, a 23.4% increase over depreciation of
US$8.5 million in 2Q07. This increase was primarily related to the
depreciation of new aircraft and spares.
Aircraft
Rentals.
Aircraft
rentals totaled US$12.0 million in 2Q08, a 29.1% increase over aircraft rentals
of US$9.3 million in 2Q07. This increase was primarily related to leased
aircraft supplemental rents and new leased Embraer-190 aircraft at Aero
Republica.
5
Flight
operations, landing fees and other rentals.
Combined,
flight operations, landing fees and other rentals increased 32.9% from US$16.2
million in 2Q07 to US$21.6 million in 2Q08, primarily as a result of
increased capacity and higher crew related expenses.
Other. Other
expenses totaled US$14.0 million in 2Q08, an increase of 12.5% over US$12.5
million in 2Q07.
Copa
Airlines operating
expenses
Copa
Airlines’ operating expenses increased 39.9% to US$206.8 million from US$147.9
million in 2Q07. Operating expenses per available seat mile increased 19.4%
to
11.9 cents in 2Q08 from 10.0 cents in 2Q07. Excluding fuel costs, operating
expenses per available seat mile increased 2.9% from 7.0 cents in 2Q07 to
7.2
cents in 2Q08.
Aircraft
fuel.
For
2Q08,
aircraft fuel totaled US$81.5 million, an 85.8% increase over aircraft fuel
expense of US$43.9 million in the same period in 2007. This increase was
primarily a result of a 19.1% increase in gallons consumed resulting from
increased capacity and a 56.0% increase in the average price per gallon of
jet
fuel (all-in), which net of hedges averaged US$3.38 in 2Q08 as compared to
US$2.17 in 2Q07.
Salaries
and benefits.
For
2Q08,
salaries and benefits totaled US$25.1 million, an 11.3% increase over
salaries and benefits of US$22.6 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$18.9 million for 2Q08, a 19.8% increase over passenger
servicing of US$15.7 million in 2Q07. This increase was primarily the
result of an increase in passengers carried.
Commissions.
Commissions
totaled US$14.2 million for 2Q08, a 22.3% increase over commissions of
US$11.6 million in 2Q07. This increase was primarily a result of a 30.8%
increase in passenger revenue, partially offset by a lower average commission
rate.
Reservations
and sales.
Reservations
and sales totaled US$10.8 million, a 26.3% increase over reservation and
sales
of US$8.5 million in 2Q07. This increase was primarily a result of more
passengers carried and higher GDS rates.
Maintenance,
materials and repairs.
Maintenance,
materials and repairs totaled US$10.5 million in 2Q08, an 8.2% increase
over maintenance, materials and repairs of US$9.7 million in 2Q07. This
increase resulted from higher capacity and less major overhaul events during
the
period.
Depreciation.
Depreciation
totaled US$9.1 million in 2Q08, a 25.7% increase over depreciation of
US$7.2 million in 2Q07, 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
35.4% from US$12.9 million in 2Q07 to US$17.4 million in 2Q08, primarily as
a result of increased capacity and higher crew related expenses.
Other.
Other
expenses increased a total of US$1.0 million from US$9.1 million in 2Q07 to
US$10.1 million in 2Q08.
Aero
Republica operating
expenses
Aero
Republica’s operating expenses increased 28.1% to US$63.1 million in 2Q08 from
US$49.2 million in 2Q07. Operating expenses per available seat mile (CASM)
increased 42.6% to 17.5 cents in 2Q08 from 12.3 cents in 2Q07. CASM, excluding
fuel costs, increased 34.5% from 8.3 cents in 2Q07 to 11.2 cents in 2Q08,
mainly
due higher aircraft rentals, 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.
6
Non-operating
income (expense)
Consolidated
non-operating expenses totaled a net gain of US$2.7 million in 2Q08,
compared to a US$4.3 million expense in 2Q07.
Interest
expense.
Interest expense totaled US$9.8 million in 2Q08, a 5.6% decrease over interest
expense of US$10.4 million in 2Q07, primarily as a result of lower rates
on
variable rate debt.
Interest
capitalized.
Interest capitalized totaled US$0.5 million in 2Q08, a 34.2% decrease over
2Q07.
Interest
income. Interest
income totaled US$2.6 million, a 14.4% decrease over interest income of US$3.0
million in 2Q07, mostly a result of lower rates on invested liquidity.
Other,
net. Other
net
totaled a gain of US$9.5 million in 2Q08, mainly related to US$5.7 million
related to the mark-to-market of fuel hedge contracts, in addition to currency
translation gains and prior period adjustments.
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 136 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.
7
Copa
Holdings, S.A.
Operating
data
|
|
Unaudited
|
Unaudited
|
%
|
Unaudited
|
%
|
|||||||||||
|
|
2Q08
|
2Q07
|
Change
|
1Q08
|
Change
|
|||||||||||
|
|
|
|
|
|
|
|||||||||||
|
Copa
Holdings (Consolidated)
|
|
|
|
|
|
|||||||||||
|
Revenue
passengers carried (thousands)
|
1,168
|
1,107
|
5.6
|
%
|
1,217
|
-4.0
|
%
|
|||||||||
|
Revenue
passengers miles (RPMs) (mm)
|
1,559
|
1,346
|
15.8
|
%
|
1,619
|
-3.8
|
%
|
|||||||||
|
Available
seat miles (ASMs) (mm)
|
2,093
|
1,880
|
11.3
|
%
|
2,077
|
0.8
|
%
|
|||||||||
|
Load
factor
|
74.5
|
%
|
71.6
|
%
|
2.9
p.p.
|
78.0
|
%
|
-3.5
p.p.
|
||||||||
|
Break-even
load factor
|
64.6
|
%
|
59.3
|
%
|
5.3
p.p.
|
64.6
|
%
|
0.0
p.p.
|
||||||||
|
Yield
(cents)
|
18.0
|
16.4
|
9.6
|
%
|
17.3
|
4.1
|
%
|
|||||||||
|
RASM
(cents)
|
14.2
|
12.5
|
13.7
|
%
|
14.2
|
-0.1
|
%
|
|||||||||
|
CASM
(cents)
|
12.7
|
10.4
|
22.1
|
%
|
11.8
|
8.4
|
%
|
|||||||||
|
CASM
- excl. fuel (cents)
|
7.8
|
7.3
|
6.9
|
%
|
7.7
|
0.9
|
%
|
|||||||||
|
Fuel
gallons consumed (mm)
|
29.7
|
26.6
|
11.7
|
%
|
29.6
|
0.2
|
%
|
|||||||||
|
Average
price of Fuel - Net of Hedges (US$)
|
3.47
|
2.22
|
56.2
|
%
|
2.82
|
23.0
|
%
|
|||||||||
|
|
||||||||||||||||
|
Copa
Segment
|
||||||||||||||||
|
Revenue
passengers miles (RPMs) (mm)
|
1,357
|
1,134
|
19.6
|
%
|
1,393
|
-2.6
|
%
|
|||||||||
|
Available
seat miles (ASMs) (mm)
|
1,732
|
1,478
|
17.2
|
%
|
1,715
|
1.0
|
%
|
|||||||||
|
Load
factor
|
78.3
|
%
|
76.7
|
%
|
1.6
p.p.
|
81.2
|
%
|
-2.9
p.p.
|
||||||||
|
Break-even
load factor
|
63.5
|
%
|
58.6
|
%
|
4.9
p.p.
|
62.2
|
%
|
1.3
p.p.
|
||||||||
|
Yield
(US$ cents)
|
16.6
|
15.2
|
9.4
|
%
|
16.0
|
3.9
|
%
|
|||||||||
|
RASM
(cents)
|
13.9
|
12.5
|
11.7
|
%
|
13.8
|
0.7
|
%
|
|||||||||
|
CASM
(cents)
|
11.9
|
10.0
|
19.4
|
%
|
10.8
|
11.0
|
%
|
|||||||||
|
CASM
- excl. fuel (cents)
|
7.2
|
7.0
|
2.9
|
%
|
6.9
|
4.5
|
%
|
|||||||||
|
Fuel
gallons consumed (mm)
|
23.7
|
19.9
|
19.1
|
%
|
23.5
|
0.8
|
%
|
|||||||||
|
Average
price of Fuel - Net of Hedges (US$)
|
3.38
|
2.17
|
56.0
|
%
|
2.76
|
22.8
|
%
|
|||||||||
|
|
||||||||||||||||
|
Aero
Republica Segment
|
||||||||||||||||
|
Revenue
passengers miles (RPMs) (mm)
|
202
|
211
|
-4.3
|
%
|
226
|
-10.7
|
%
|
|||||||||
|
Available
seat miles (ASMs) (mm)
|
361
|
401
|
-10.2
|
%
|
361
|
-0.2
|
%
|
|||||||||
|
Load
factor
|
56.0
|
%
|
52.6
|
%
|
3.4
p.p.
|
62.6
|
%
|
-6.6
p.p.
|
||||||||
|
Break-even
load factor
|
61.7
|
%
|
54.7
|
%
|
7.0
p.p.
|
67.8
|
%
|
-6.1
p.p.
|
||||||||
|
Yield
(cents)
|
27.3
|
23.1
|
18.2
|
%
|
25.2
|
8.1
|
%
|
|||||||||
|
RASM
(cents)
|
16.7
|
12.9
|
29.6
|
%
|
17.1
|
-2.4
|
%
|
|||||||||
|
CASM
(cents)
|
17.5
|
12.3
|
42.6
|
%
|
17.3
|
1.0
|
%
|
|||||||||
|
CASM
- excl. fuel (cents)
|
11.2
|
8.5
|
30.9
|
%
|
12.1
|
-7.9
|
%
|
|||||||||
|
Fuel
gallons consumed (mm)
|
6.0
|
6.7
|
-10.4
|
%
|
6.1
|
-1.7
|
%
|
|||||||||
|
Average
price of Fuel - Net of Hedges (US$)
|
3.80
|
2.37
|
60.2
|
%
|
3.07
|
23.8
|
%
|
|||||||||
8
Copa
Holdings, S.A.
Income
Statement - USGAAP
(US$
Thousands)
|
|
Unaudited
|
Unaudited
|
%
|
Unaudited
|
%
|
|||||||||||
|
|
2Q08
|
2Q07
|
Change
|
1Q08
|
Change
|
|||||||||||
|
Operating
Revenues
|
||||||||||||||||
|
Passenger
Revenue
|
280,919
|
221,221
|
27.0
|
%
|
280,224
|
0.2
|
%
|
|||||||||
|
Cargo,
mail and other
|
17,010
|
14,073
|
20.9
|
%
|
15,662
|
8.6
|
%
|
|||||||||
|
Total
Operating Revenue
|
297,929
|
235,294
|
26.6
|
%
|
295,886
|
0.7
|
%
|
|||||||||
|
|
||||||||||||||||
|
Operating
Expenses
|
||||||||||||||||
|
Aircraft
fuel
|
104,239
|
59,711
|
74.6
|
%
|
84,344
|
23.6
|
%
|
|||||||||
|
Salaries
and benefits
|
32,553
|
28,789
|
13.1
|
%
|
34,147
|
-4.7
|
%
|
|||||||||
|
Passenger
servicing
|
23,375
|
19,020
|
22.9
|
%
|
23,235
|
0.6
|
%
|
|||||||||
|
Commissions
|
17,818
|
16,809
|
6.0
|
%
|
16,961
|
5.1
|
%
|
|||||||||
|
Reservations
and sales
|
14,505
|
12,143
|
19.5
|
%
|
13,256
|
9.4
|
%
|
|||||||||
|
Maintenance,
material and repairs
|
16,180
|
13,355
|
21.2
|
%
|
17,323
|
-6.6
|
%
|
|||||||||
|
Depreciation
|
10,433
|
8,457
|
23.4
|
%
|
10,000
|
4.3
|
%
|
|||||||||
|
Flight
operations
|
14,015
|
9,912
|
41.4
|
%
|
12,979
|
8.0
|
%
|
|||||||||
|
Aircraft
rentals
|
12,012
|
9,303
|
29.1
|
%
|
10,673
|
12.5
|
%
|
|||||||||
|
Landing
fees and other rentals
|
7,557
|
6,314
|
19.7
|
%
|
8,008
|
-5.6
|
%
|
|||||||||
|
Other
|
14,047
|
12,483
|
12.5
|
%
|
13,246
|
6.0
|
%
|
|||||||||
|
Total
Operating Expense
|
266,734
|
196,296
|
35.9
|
%
|
244,171
|
9.2
|
%
|
|||||||||
|
|
|
|
|
|
|
|||||||||||
|
Operating
Income
|
31,195
|
38,997
|
-20.0
|
%
|
51,715
|
-39.7
|
%
|
|||||||||
|
|
||||||||||||||||
|
Non-operating
Income (Expense):
|
||||||||||||||||
|
Interest
expense
|
(9,815
|
)
|
(10,393
|
)
|
-5.6
|
%
|
(10,980
|
)
|
-10.6
|
%
|
||||||
|
Interest
capitalized
|
484
|
736
|
-34.2
|
%
|
521
|
-7.1
|
%
|
|||||||||
|
Interest
income
|
2,596
|
3,031
|
-14.4
|
%
|
2,768
|
-6.2
|
%
|
|||||||||
|
Other,
net
|
9,479
|
2,373
|
299.5
|
%
|
(420
|
)
|
-2357.1
|
%
|
||||||||
|
Total
Non-Operating Income/(Expense)
|
2,744
|
(4,253
|
)
|
-164.5
|
%
|
(8,111
|
)
|
-133.8
|
%
|
|||||||
|
|
|
|
|
|
|
|||||||||||
|
Income
before Income Taxes
|
33,938
|
34,744
|
-2.3
|
%
|
43,604
|
-22.2
|
%
|
|||||||||
|
|
||||||||||||||||
|
Provision
for Income Taxes
|
3,507
|
3,839
|
-8.6
|
%
|
4,104
|
-14.5
|
%
|
|||||||||
|
|
|
|
|
|
|
|||||||||||
|
Net
Income
|
30,431
|
30,905
|
-1.5
|
%
|
39,499
|
-23.0
|
%
|
|||||||||
|
Basic
EPS
|
0.70
|
0.72
|
-2.4
|
%
|
0.92
|
-23.3
|
%
|
|||||||||
|
Basic
Shares
|
43,194,566
|
42,816,678
|
0.9
|
%
|
42,985,220
|
0.5
|
%
|
|||||||||
|
|
||||||||||||||||
|
Diluted
EPS
|
0.70
|
0.71
|
-1.5
|
%
|
0.91
|
-23.0
|
%
|
|||||||||
|
Diluted
Shares
|
43,464,749
|
43,501,720
|
-0.1
|
%
|
43,432,584
|
0.1
|
%
|
9
Copa
Holdings, S.A.
Balance
Sheet - USGAAP
(US$
Thousands)
|
June
30,
|
March
31,
|
June
30,
|
||||||||
|
|
2008
|
2008
|
2007
|
|||||||
|
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||
|
ASSETS
|
|
|
|
|||||||
|
Current
Assets:
|
||||||||||
|
Cash
and cash equivalents
|
$
|
223,505
|
$
|
234,593
|
$
|
223,418
|
||||
|
Short-term
investments
|
86,500
|
70,500
|
27,500
|
|||||||
|
Total
cash, cash equivalents and short-term investments
|
310,005
|
305,093
|
250,918
|
|||||||
|
|
||||||||||
|
Accounts
receivable, net of allowance for doubtful accounts
|
97,525
|
84,194
|
92,394
|
|||||||
|
Accounts
receivable from related parties
|
2,108
|
3,462
|
860
|
|||||||
|
Expendable
parts and supplies, net of allowance for obsolescence
|
18,287
|
16,526
|
11,501
|
|||||||
|
Prepaid
expenses
|
23,173
|
25,317
|
18,677
|
|||||||
|
Other
current assets
|
23,395
|
15,593
|
8,759
|
|||||||
|
Total
Current Assets
|
474,493
|
450,185
|
383,109
|
|||||||
|
|
||||||||||
|
Long-term
investments
|
17,730
|
17,538
|
21,038
|
|||||||
|
|
||||||||||
|
Property
and Equipment:
|
||||||||||
|
Owned
property and equipment:
|
||||||||||
|
Flight
equipment
|
1,300,486
|
1,195,518
|
980,287
|
|||||||
|
Other
equipment
|
53,263
|
53,352
|
47,445
|
|||||||
|
|
1,353,749
|
1,248,870
|
1,027,732
|
|||||||
|
Less:
Accumulated depreciation
|
(155,915
|
)
|
(147,667
|
)
|
(119,660
|
)
|
||||
|
|
1,197,834
|
1,101,203
|
908,072
|
|||||||
|
Purchase
deposits for flight equipment
|
64,567
|
74,046
|
93,206
|
|||||||
|
Total
Property and Equipment
|
1,262,401
|
1,175,249
|
1,001,278
|
|||||||
|
|
||||||||||
|
Other
Assets:
|
||||||||||
|
Net
pension asset
|
1,236
|
1,171
|
815
|
|||||||
|
Goodwill
|
25,355
|
26,767
|
24,869
|
|||||||
|
Intangible
asset
|
37,177
|
39,247
|
36,464
|
|||||||
|
Other
assets
|
31,020
|
30,604
|
24,290
|
|||||||
|
Total
Other Assets
|
94,788
|
97,789
|
86,438
|
|||||||
|
Total
Assets
|
$
|
1,849,412
|
$
|
1,740,761
|
$
|
1,491,863
|
||||
|
|
||||||||||
|
LIABILITIES
AND SHAREHOLDER'S EQUITY
|
||||||||||
|
Current
Liabilities:
|
||||||||||
|
Current
maturities of long-term debt
|
$
|
100,454
|
$
|
96,243
|
$
|
118,197
|
||||
|
Accounts
payable
|
48,213
|
51,193
|
50,935
|
|||||||
|
Accounts
payable to related parties
|
9,511
|
9,439
|
10,709
|
|||||||
|
Air
traffic liability
|
195,579
|
150,383
|
153,951
|
|||||||
|
Taxes
and interest payable
|
38,208
|
34,397
|
37,228
|
|||||||
|
Accrued
expenses payable
|
44,599
|
57,342
|
38,826
|
|||||||
|
Other
current liabilities
|
4,190
|
4,631
|
11,205
|
|||||||
|
Total
Current Liabilities
|
440,754
|
403,628
|
421,051
|
|||||||
|
|
||||||||||
|
Non-Current
Liabilities:
|
||||||||||
|
Long-term
debt
|
795,820
|
739,886
|
605,977
|
|||||||
|
Post
employment benefits liability
|
1,897
|
1,866
|
1,927
|
|||||||
|
Other
long-term liabilities
|
10,965
|
10,273
|
8,766
|
|||||||
|
Deferred
tax liabilities
|
8,375
|
8,119
|
5,440
|
|||||||
|
Total
Non-Current Liabilities
|
817,057
|
760,144
|
622,110
|
|||||||
|
|
|
|
|
|||||||
|
Total
Liabilities
|
1,257,811
|
1,163,772
|
1,043,161
|
|||||||
|
|
||||||||||
|
Shareholders'
Equity:
|
||||||||||
|
Class
A - 30,416,440 shares issued and outstanding
|
20,761
|
20,761
|
20,586
|
|||||||
|
Class
B - 12,778,125 shares issued and outstanding
|
8,722
|
8,722
|
8,722
|
|||||||
|
Additional
paid in capital
|
11,160
|
10,037
|
5,593
|
|||||||
|
Retained
earnings
|
545,322
|
531,098
|
409,302
|
|||||||
|
Accumulated
other comprehensive (loss)
|
5,636
|
6,371
|
4,499
|
|||||||
|
Total
Shareholders' Equity
|
591,601
|
576,989
|
448,702
|
|||||||
|
Total
Liabilities and Shareholders' Equity
|
$
|
1,849,412
|
$
|
1,740,761
|
$
|
1,491,863
|
||||
10
Copa
Holdings, S.A.
NON-GAAP
FINANCIAL MEASURE RECONCILIATION
|
EBITDAR
(Figures in US$ thousands)
|
2Q08
|
2Q07
|
1Q08
|
|||||||
|
Net
Income
|
$30,431
|
$30,905
|
$39,499
|
|||||||
|
|
|
|
|
|||||||
|
Interest
Expense
|
(9,815
|
)
|
(10,393
|
)
|
(10,980
|
)
|
||||
|
Capitalized
Interest
|
484
|
736
|
521
|
|||||||
|
Interest
Income
|
2,596
|
3,031
|
2,768
|
|||||||
|
Income
Taxes
|
(3,507
|
)
|
(3,839
|
)
|
(4,104
|
)
|
||||
|
EBIT
|
40,674
|
41,370
|
51,295
|
|||||||
|
|
||||||||||
|
Depreciation
and Amortization
|
10,433
|
8,457
|
10,000
|
|||||||
|
EBITDA
|
51,107
|
49,827
|
61,295
|
|||||||
|
|
||||||||||
|
Aircraft
Rent
|
12,012
|
9,303
|
10,673
|
|||||||
|
Other
Rentals
|
3,610
|
2,575
|
3,883
|
|||||||
|
EBITDAR
|
$
|
66,729
|
$
|
61,706
|
$
|
75,851
|
||||
11