Copa Holdings Reports Net Income of US$113.1 Million and EPS of US$2.57 for the First Quarter of 2015
Excluding special items, adjusted net income came in at US$106.0 million, or EPS of US$2.41 per share
PANAMA CITY, May 6, 2015 /PRNewswire/ -- Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the first quarter of 2015 (1Q15). The terms "Copa Holdings" or "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 financial tables section of this earnings release. Unless otherwise stated, all comparisons with prior periods refer to the first quarter of 2014 (1Q14).
OPERATING AND FINANCIAL HIGHLIGHTS
- Copa Holdings reported net income of US$113.1 million for 1Q15, or diluted earnings per share (EPS) of US$2.57. Excluding special items, Copa Holdings would have reported an adjusted net income of US$106.0 million, or EPS of US$2.41 per share, a 30.4% decrease over adjusted net income of US$153.6 million and US$3.46 per share for 1Q14.
- Operating income for 1Q15 came in at US$127.3 million, a 28.1% decrease over operating income of US$177.0 million in 1Q14. Operating margin for the period came in at 20.1%, compared to 24.8% in 1Q14, as a result of lower unit revenues partially offset by lower unit costs.
- Total revenues decreased 11.5% to US$631.8 million. Yield per passenger mile decreased 16.2% to 14.8 cents and operating revenue per available seat mile (RASM) decreased 18.3% to 11.6 cents. Adjusting for an 8.5% increase in length of haul, yields and RASM decreased 12.7% and 14.9%, respectively.
- For 1Q14, passenger traffic (RPMs) grew 5.8% on a 8.3% capacity expansion. Consolidated load factor came in at 76.3%, 1.8 percentage points below 1Q14.
- Operating cost per available seat mile (CASM) decreased 13.2%, from 10.7 cents in 1Q14 to 9.3 cents in 1Q15 mainly due to lower jet fuel costs. CASM, excluding fuel, decreased 3.4% to 6.3 cents mainly due to lower sales related expenses and lower overhead expenses.
- Cash, short-term and long-term investments ended 1Q15 at US$1.16 billion, representing 44% of the last twelve months' revenues. Of this amount, 41% or US$470.1 million was in Venezuela pending repatriation due to government currency controls.
- During the first quarter, Copa Airlines took delivery of one Boeing 737-800 aircraft, and returned a leased Boeing 737-700. As a result, Copa Holdings ended the quarter with a consolidated fleet of 98 aircraft.
- For 1Q15, Copa Holdings reported consolidated on-time performance of 90.0% and a flight-completion factor of 99.5%, maintaining its position among the best in the industry.
Subsequent Events
- On April 10, 2015, Copa Holdings signed an order with Boeing to purchase 61 737-MAX aircraft, worth US$6.6 billion at Boeing list prices. The aircraft are expected to be delivered between 2018 and 2024.
- On June 15, 2015, Copa Holdings will pay its second quarter dividend of US$0.84 per share, on all outstanding Class A and Class B shares, to stockholders of record as of May 29, 2015.
| Consolidated Financial & Operating Highlights |
1Q15 |
1Q14 |
% Change |
4Q14 |
% Change |
| Revenue Passengers Carried ('000) |
1,965 |
2,032 |
-3.3% |
1,952 |
0.6% |
| RPMs (mm) |
4,143 |
3,917 |
5.8% |
4,036 |
2.7% |
| ASMs (mm) |
5,433 |
5,015 |
8.3% |
5,377 |
1.0% |
| Load Factor |
76.3% |
78.1% |
-1.8 p.p. |
75.1% |
1.2 p.p. |
| Yield |
14.8 |
17.7 |
-16.2% |
16.1 |
-8.0% |
| PRASM (US$ Cents) |
11.3 |
13.8 |
-18.2% |
12.1 |
-6.5% |
| RASM (US$ Cents) |
11.6 |
14.2 |
-18.3% |
12.5 |
-6.8% |
| CASM (US$ Cents) |
9.3 |
10.7 |
-13.2% |
10.3 |
-9.5% |
| CASM Excl. Fuel (US$ Cents) |
6.3 |
6.6 |
-3.4% |
6.7 |
-4.9% |
| Breakeven Load Factor (1) |
60.0% |
57.6% |
2.4 p.p. |
57.5% |
2.5 p.p. |
| Fuel Gallons Consumed (Millions) |
69.6 |
65.3 |
6.6% |
69.1 |
0.8% |
| Avg. Price Per Fuel Gallon (US$ Dollars) |
2.31 |
3.19 |
-27.5% |
2.81 |
-17.9% |
| Average Length of Haul (Miles) |
2,109 |
1,944 |
8.5% |
2,067 |
2.0% |
| Average Stage Length (Miles) |
1,247 |
1,173 |
6.3% |
1,234 |
1.1% |
| Departures |
30,603 |
30,546 |
0.2% |
30,676 |
-0.2% |
| Block Hours |
97,530 |
91,569 |
6.5% |
97,399 |
0.1% |
| Average Aircraft Utilization (Hours) |
11.1 |
11.3 |
-2.2% |
10.8 |
2.0% |
| Operating Revenues (US$ mm) |
631.8 |
713.6 |
-11.5% |
670.9 |
-5.8% |
| Operating Income (US$ mm) |
127.3 |
177.0 |
-28.1% |
118.8 |
7.1% |
| Operating Margin |
20.1% |
24.8% |
-4.7 p.p. |
17.7% |
2.4 p.p. |
| Net Income (US$ mm) |
113.1 |
151.4 |
-25.3% |
35.9 |
214.9% |
| Adjusted Net Income (US$ mm) (1) |
106.0 |
153.6 |
-30.9% |
125.3 |
-15.4% |
| EPS - Basic and Diluted (US$) |
2.57 |
3.41 |
-24.7% |
0.81 |
216.9% |
| Adjusted EPS - Basic and Diluted (US$) (1) |
2.41 |
3.46 |
-30.4% |
2.83 |
-14.9% |
| # of Shares - Basic and Diluted ('000) |
44,077 |
44,403 |
-0.7% |
44,355 |
-0.6% |
(1) Breakeven Load Factor, Adjusted Net Income and Adjusted EPS for 1Q15, 1Q14, and 4Q14 exclude non-cash charges/gains associated with the mark-to-market of fuel hedges, and the impact of the Venezuelan currency devaluation.
Note: Attached to this press release is a reconciliation of non-IFRS financial measures to the comparable IFRS measures.
FULL 1Q15 EARNINGS RELEASE AVAILABLE FOR DOWNLOAD AT: http://investor.shareholder.com/copa/results.cfm
1Q15 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST
| Date: |
May 7, 2015 |
||
| Time: |
11:00 AM US ET (10:00 AM Local Time) |
||
| Conference telephone number: |
877-293-5456 (US Domestic Callers) |
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| 707-287-9357 (International Callers) |
|||
| Webcast: |
|||
| Speakers: |
Pedro Heilbron, Chief Executive Officer |
||
| Jose 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 73 destinations in 30 countries in North, Central and South America and the Caribbean with one of the youngest and most modern fleets in the industry, consisting of 98 aircraft: 72 Boeing 737NG aircraft and 26 EMBRAER-190s. For more information visit: www.copa.com.
CONTACT: Copa Holdings S.A.
Investor Relations:
Ph: (507) 304-2431
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.
CPA-G
| Copa Holdings, S.A. |
|||||||||
| Income Statement - IFRS |
|||||||||
| (US$ Thousands) |
|||||||||
| Unaudited |
Unaudited |
% |
Unaudited |
% |
|||||
| 1Q15 |
1Q14 |
Change |
4Q14 |
Change |
|||||
| Operating Revenues |
|||||||||
| Passenger Revenue |
613,510 |
691,977 |
-11.3% |
649,521 |
-5.5% |
||||
| Cargo, mail and other |
18,323 |
21,629 |
-15.3% |
21,406 |
-14.4% |
||||
| Total Operating Revenue |
631,833 |
713,605 |
-11.5% |
670,927 |
-5.8% |
||||
| Operating Expenses |
|||||||||
| Aircraft fuel |
160,791 |
208,014 |
-22.7% |
194,143 |
-17.2% |
||||
| Salaries and benefits |
78,022 |
73,976 |
5.5% |
81,605 |
-4.4% |
||||
| Passenger servicing |
66,142 |
64,118 |
3.2% |
70,319 |
-5.9% |
||||
| Commissions |
25,988 |
26,132 |
-0.6% |
25,311 |
2.7% |
||||
| Reservations and sales |
21,500 |
23,853 |
-9.9% |
23,809 |
-9.7% |
||||
| Maintenance, material and repairs |
25,709 |
24,746 |
3.9% |
23,187 |
10.9% |
||||
| Depreciation |
31,464 |
27,821 |
13.1% |
31,512 |
-0.2% |
||||
| Flight operations |
33,346 |
31,134 |
7.1% |
34,461 |
-3.2% |
||||
| Aircraft rentals |
30,245 |
25,315 |
19.5% |
30,152 |
0.3% |
||||
| Landing fees and other rentals |
13,748 |
13,253 |
3.7% |
13,745 |
0.0% |
||||
| Other |
17,601 |
18,246 |
-3.5% |
23,847 |
-26.2% |
||||
| Total Operating Expense |
504,555 |
536,607 |
-6.0% |
552,091 |
-8.6% |
||||
| Operating Income |
127,279 |
176,999 |
-28.1% |
118,836 |
7.1% |
||||
| Non-operating Income (Expense): |
|||||||||
| Interest expense |
(7,590) |
(7,094) |
7.0% |
(7,940) |
-4.4% |
||||
| Interest income |
6,275 |
3,736 |
68.0% |
6,379 |
-1.6% |
||||
| Other, net |
2,083 |
67 |
n/m |
(81,867) |
n/m |
||||
| Total Non-Operating Income/(Expense) |
768 |
(3,291) |
-123.4% |
(83,427) |
-100.9% |
||||
| Income before Income Taxes |
128,047 |
173,707 |
-26.3% |
35,409 |
261.6% |
||||
| Provision for Income Taxes |
14,926 |
22,350 |
-33.2% |
(516) |
n/m |
||||
| Net Income |
113,121 |
151,357 |
-25.3% |
35,925 |
214.9% |
||||
| EPS - Basic and Diluted |
2.57 |
3.41 |
-24.7% |
0.81 |
216.9% |
||||
| Shares - Basic and Diluted |
44,077,111 |
44,402,832 |
-0.7% |
44,354,963 |
-0.6% |
| Copa Holdings, S.A. |
|||||
| Balance Sheet - IFRS |
|||||
| (US$ Thousands) |
March 31, |
December 31, |
|||
| 2015 |
2014 |
||||
| (Unaudited) |
(Audited) |
||||
| ASSETS |
|||||
| Current Assets: |
|||||
| Cash and cash equivalents |
$ 220,409 |
$ 221,443 |
|||
| Short-term investments |
380,872 |
545,160 |
|||
| Total cash, cash equivalents and short-term investments |
601,281 |
766,603 |
|||
| Accounts receivable, net of allowance for doubtful accounts |
138,234 |
121,258 |
|||
| Accounts receivable from related parties |
755 |
892 |
|||
| Expendable parts and supplies, net of allowance for obsolescence |
61,891 |
59,954 |
|||
| Prepaid expenses |
61,818 |
56,793 |
|||
| Other current assets |
6,455 |
5,949 |
|||
| Total Current Assets |
870,434 |
1,011,449 |
|||
| Long-term investments |
558,290 |
396,802 |
|||
| Property and Equipment: |
|||||
| Owned property and equipment: |
|||||
| Flight equipment |
2,776,098 |
2,725,407 |
|||
| Other equipment |
94,337 |
89,257 |
|||
| 2,870,435 |
2,814,664 |
||||
| Less: Accumulated depreciation |
(651,761) |
(630,503) |
|||
| 2,218,674 |
2,184,161 |
||||
| Purchase deposits for flight equipment |
324,466 |
321,175 |
|||
| Total Property and Equipment |
2,543,139 |
2,505,336 |
|||
| Other Assets: |
|||||
| Net pension asset |
13,473 |
13,784 |
|||
| Goodwill |
18,928 |
20,380 |
|||
| Intangible asset |
38,506 |
36,915 |
|||
| Deferred tax Assets |
12,985 |
17,235 |
|||
| Other assets |
86,307 |
88,973 |
|||
| Total Other Assets |
170,199 |
177,287 |
|||
| Total Assets |
$ 4,142,063 |
$ 4,090,874 |
|||
| LIABILITIES AND SHAREHOLDER'S EQUITY |
|||||
| Current Liabilities: |
|||||
| Current maturities of long-term debt |
$ 206,544 |
$ 187,646 |
|||
| Accounts payable |
115,340 |
125,412 |
|||
| Accounts payable to related parties |
10,625 |
6,749 |
|||
| Air traffic liability |
382,742 |
408,012 |
|||
| Taxes and interest payable |
67,030 |
58,554 |
|||
| Accrued expenses payable |
76,412 |
85,847 |
|||
| Other current liabilities |
98,307 |
109,277 |
|||
| Total Current Liabilities |
957,000 |
981,497 |
|||
| Non-Current Liabilities: |
|||||
| Long-term debt |
943,003 |
928,964 |
|||
| Post employment benefits liability |
11,834 |
11,262 |
|||
| Other long-term liabilities |
66,508 |
57,747 |
|||
| Deferred tax liabilities |
31,775 |
36,296 |
|||
| Total Non-Current Liabilities |
1,053,120 |
1,034,269 |
|||
| Total Liabilities |
2,010,120 |
2,015,766 |
|||
| Shareholders' Equity: |
|||||
| Class A - 33,451,370 issued and 32,977,353 outstanding |
20,923 |
20,859 |
|||
| Class B - 10,938,125 shares issued and outstanding |
7,466 |
7,466 |
|||
| Additional paid in capital |
54,562 |
53,486 |
|||
| Treasury Stock |
(36,274) |
(18,426) |
|||
| Retained earnings |
2,084,253 |
2,011,485 |
|||
| Accumulated other comprehensive income (loss) |
1,013 |
238 |
|||
| Total Shareholders' Equity |
2,131,943 |
2,075,108 |
|||
| Total Liabilities and Shareholders' Equity |
$ 4,142,063 |
$ 4,090,874 |
|||
NON-IFRS FINANCIAL MEASURE RECONCILIATION
This press release includes the following non IFRS financial measures: CASM Excluding Fuel, Adjusted Net Income 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 income and net income. The following is a reconciliation of these non-IFRS financial measures to the comparable IFRS measures:
| Reconciliation of Net Income |
||||||
| Excluding Special Items |
1Q15 |
1Q14 |
4Q14 |
|||
| Net income as Reported |
$113,121 |
$151,357 |
$35,925 |
|||
| Special Items (adjustments): |
||||||
| Unrealized (gain) loss on fuel hedging instruments |
7,115 |
(3,373) |
(89,058) |
|||
| (Loss) gain due to devaluation of Venezuelan Bolivar |
(36) |
1,178 |
(350) |
|||
| Adjusted Net Income |
$106,043 |
$153,553 |
$125,333 |
|||
| Shares used for Computation (in thousands) |
||||||
| Basic and Diluted |
44,077 |
44,403 |
44,355 |
|||
| Adjusted earnings per share - Basic and Diluted |
2.41 |
3.46 |
2.83 |
|||
| Reconciliation Operating Costs per ASM |
||||||
| Excluding Fuel and Special Items |
1Q15 |
1Q14 |
4Q14 |
|||
| Operating Costs per ASM as Reported |
9.3 |
10.7 |
10.3 |
|||
| Aircraft fuel per ASM |
(3.0) |
(4.1) |
(3.6) |
|||
| Operating Costs per ASM excluding fuel |
6.3 |
6.6 |
6.7 |
|||
SOURCE Copa Holdings, S.A.
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