Copa Holdings Reports Net Income of US$113.8 Million and EPS of US$2.56 for the First Quarter of 2013

Excluding special items, adjusted net income came in at $124.4 million, or EPS of $2.80 per share

13 May, 2013, 17:00 ET from Copa Holdings, S.A.

PANAMA CITY, May 13, 2013 /PRNewswire/ -- Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the first quarter of 2013(1Q13). 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 2012 (1Q12).

OPERATING AND FINANCIAL HIGHLIGHTS

  • Copa Holdings reported net income of US$113.8 million for 1Q13, or diluted earnings per share (EPS) of US$2.56.  Excluding special items, Copa Holdings would have reported an adjusted net income of $124.4 million, or $2.80 per share, a 37.3% increase over adjusted net income of US$90.6 million and US$2.04 per share for 1Q12.
  • Operating income for 1Q13 came in at US$142.6 million, a 27.9% increase over operating income of US$111.6 million in 1Q12.  Operating margin for the period came in at 22.2%, compared to 20.5% in 1Q12, as a result of lower unit costs. 
  • Total revenues increased 18.0% to US$641.3 million.  Yield per passenger mile decreased 0.8% to 17.6 cents and operating revenue per available seat mile (RASM) decreased 1.5% to 14.0 cents.  However, adjusting for a 6.3% increase in length of haul, yields and RASM increased 2.2% and 1.5%, respectively.
  • For 1Q13, robust demand trends resulted in passenger traffic (RPMs) growth of 19.5% on a 19.9% capacity expansion.  Consolidated load factor came in at 76.9%, or 0.3 percentage points below 1Q12.
  • Operating cost per available seat mile (CASM) decreased 3.6%, from 11.3 cents in 1Q12 to 10.9 cents in 1Q13.  CASM, excluding fuel, decreased 4.7% to 6.5 cents.
  • Cash, short term and long term investments ended 1Q13 at US$733.4 million, representing 31.2% of the last twelve months' revenues. 
  •  During the first quarter, Copa Airlines took delivery of two Boeing 737-800 aircraft.  As a result, Copa Holdings ended the quarter with a consolidated fleet of 85 aircraft.
  • For 1Q13, Copa Holdings reported consolidated on-time performance of 90.0% and a flight-completion factor of 99.7%, maintaining its position among the best in the industry.

 

Consolidated Financial & Operating Highlights

1Q13

1Q12

% Change 

4Q12

% Change 

Revenue Passengers Carried ('000)

1,926

1,714

12.4%

1,899

1.4%

RPMs (mm) 

3,529

2,954

19.5%

3,366

4.8%

ASMs (mm) 

4,590

3,829

19.9%

4,447

3.2%

Load Factor 

76.9%

77.2%

-0.3 p.p.

75.7%

1.2 p.p.

Yield

17.6

17.7

-0.8%

17.1

2.8%

PRASM (US$ Cents) 

13.5

13.7

-1.2%

12.9

4.4%

RASM (US$ Cents) 

14.0

14.2

-1.5%

13.5

3.6%

CASM (US$ Cents) 

10.9

11.3

-3.6%

11.1

-2.5%

CASM Excl. Fuel (US$ Cents) 

6.5

6.8

-4.7%

6.8

-4.1%

Breakeven Load Factor (1)

58.7%

61.2%

-2.5 p.p.

61.6%

-2.9 p.p.

Fuel Gallons Consumed (Millions) 

60.1

51.3

17.1%

58.4

2.9%

Avg. Price Per Fuel Gallon (US$ Dollars)

3.34

3.33

0.4%

3.34

0.1%

Average Length of Haul (Miles)

1,832

1,724

6.3%

1,772

3.4%

Average Stage Length (Miles)

1,123

1,066

5.4%

1,090

3.1%

Departures

29,428

26,647

10.4%

29,555

-0.4%

Block Hours

84,490

73,394

15.1%

83,146

1.6%

Average Aircraft Utilization (Hours)

11.3

10.9

3.1%

11.0

2.7%

Operating Revenues (US$ mm) 

641.3

543.3

18.0%

599.8

6.9%

Operating Income (US$ mm)

142.6

111.6

27.9%

104.3

36.8%

Operating Margin 

22.2%

20.5%

1.7 p.p.

17.4%

4.9 p.p.

Net Income (US$ mm)

113.8

95.9

18.7%

86.6

31.4%

Adjusted Net Income (US$ mm) (1)

124.4

90.6

37.3%

89.3

39.3%

EPS - Basic and Diluted (US$)

2.56

2.16

18.5%

1.95

31.5%

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

2.80

2.04

37.1%

2.01

39.4%

# of Shares - Basic and Diluted ('000) 

44,387

44,341

0.1%

44,409

0.0%

(1) Breakeven Load Factor, Adjusted Net Income and Adjusted EPS for 1Q13, 1Q12, and 4Q12 exclude non-cash charges/gains associated with the mark-to-market of fuel hedges.   Additionally, for 1Q13 excludes a US$13.9 million charge related to the devaluation of the Venezuelan currency. Note: Attached to this press release is a reconciliation of non-IFRS financial measures to the comparable IFRS measures.

FULL 1Q13 EARNINGS RELEASE AVAILABLE FOR DOWNLOAD AT: http://investor.shareholder.com/copa/results.cfm

1Q13 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST

Date:

May 14, 2013

Time:

11:00 AM US ET (10:00 AM Local Time)

Conference telephone number: 

877-293-5456 (US Domestic Callers)

707-287-9357 (International Callers)

Webcast:

http://investor.shareholder.com/copa/events.cfm

Speakers:

Pedro Heilbron, Chief Executive Officer

Jose Montero, Chief Financial Officer

Copa Holdings is a leading Latin American provider of passenger and cargo services.  The Company, through its operating subsidiaries, provides service to 64 destinations in 29 countries in North, Central and South America and the Caribbean with one of the youngest and most modern fleets in the industry, consisting of 86 aircraft: 60 Boeing 737NG aircraft and 26 EMBRAER-190s. For more information visit: www.copaair.com.

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

%

1Q13

1Q12

Change

4Q12

Change

Operating Revenues

Passenger Revenue

620,488

523,812

18.5%

575,731

7.8%

Cargo, mail and other

20,793

19,444

6.9%

24,109

-13.8%

Total Operating Revenue

641,282

543,257

18.0%

599,839

6.9%

Operating Expenses

Aircraft fuel

200,773

170,875

17.5%

194,754

3.1%

Salaries and benefits

66,728

57,536

16.0%

65,782

1.4%

Passenger servicing

60,316

49,433

22.0%

59,788

0.9%

Commissions

24,260

22,223

9.2%

22,382

8.4%

Reservations and sales

21,449

20,090

6.8%

22,112

-3.0%

Maintenance, material and repairs

22,284

20,530

8.5%

24,311

-8.3%

Depreciation

24,806

20,526

20.9%

24,446

1.5%

Flight operations

29,479

25,039

17.7%

27,747

6.2%

Aircraft rentals

19,952

17,300

15.3%

19,472

2.5%

Landing fees and other rentals

12,195

10,846

12.4%

12,266

-0.6%

Other

16,412

17,300

-5.1%

22,510

-27.1%

Total Operating Expense

498,655

431,699

15.5%

495,570

0.6%

Operating Income

142,626

111,558

27.9%

104,269

36.8%

Non-operating Income (Expense):

Interest expense

(7,660)

(7,959)

-3.7%

(8,130)

-5.8%

Interest capitalized

0

0

nm

0

nm

Interest income

2,706

2,286

18.3%

3,427

-21.0%

Other, net

(9,195)

4,866

-289.0%

(2,721)

238.0%

Total Non-Operating Income/(Expense)

(14,150)

(806)

n/a

(7,424)

90.6%

Income before Income Taxes

128,476

110,751

16.0%

96,845

32.7%

Provision for Income Taxes

14,646

14,822

-1.2%

10,222

43.3%

Net Income

113,830

95,930

18.7%

86,623

31.4%

EPS - Basic and Diluted

2.56

2.16

18.5%

1.95

31.5%

Shares - Basic and Diluted

44,387,148

44,340,562

0.1%

44,409,211

0.0%

 

 

Copa Holdings, S.A.

Balance Sheet - IFRS

(US$ Thousands)

March 31,

December 31,

2013

2012

 (Unaudited) 

 (Audited) 

ASSETS

Current Assets:

Cash and cash equivalents

$      325,184

$          76,094

Short-term investments

349,628

575,009

Total cash, cash equivalents and short-term investments

674,812

651,103

Accounts receivable, net of allowance for doubtful accounts

174,537

135,207

Accounts receivable from related parties

1,121

1,129

Expendable parts and supplies, net of allowance for obsolescence

58,050

50,603

Prepaid expenses

56,767

63,120

Other current assets

19,687

16,328

Total Current Assets

984,974

917,490

Long-term investments

58,598

69,445

Property and Equipment:

Owned property and equipment:

Flight equipment

2,420,436

2,405,346

Other equipment

68,893

66,330

2,489,329

2,471,676

Less: Accumulated depreciation

(456,281)

(432,589)

2,033,048

2,039,087

Purchase deposits for flight equipment

271,916

245,544

Total Property and Equipment

2,304,964

2,284,631

Other Assets:

Net pension asset

10,618

10,009

Goodwill

26,612

27,575

Intangible asset

59,127

59,382

Other assets

122,357

110,968

Total Other Assets

218,714

207,934

Total Assets

$   3,567,250

$     3,479,500

LIABILITIES AND SHAREHOLDER'S EQUITY

Current Liabilities:

Current maturities of long-term debt

$      122,414

$        136,268

Accounts payable

114,498

104,975

Accounts payable to related parties

23,857

20,255

Air traffic liability

369,286

382,807

Taxes and interest payable

98,795

85,436

Accrued expenses payable

46,374

48,047

Other current liabilities

9,309

10,902

Total Current Liabilities

784,533

788,690

Non-Current Liabilities:

Long-term debt

1,038,793

1,069,836

Post employment benefits liability

6,322

6,340

Other long-term liabilities

46,285

43,726

Deferred tax liabilities

37,691

34,364

Total Non-Current Liabilities

1,129,091

1,154,266

Total Liabilities

1,913,624

1,942,956

Shareholders' Equity:

Class A - 33,418,117 shares issued and outstanding

22,630

22,591

Class B - 10,938,125 shares issued and outstanding

7,466

7,466

Additional paid in capital

42,363

40,660

Retained earnings

1,572,088

1,458,258

Accumulated other comprehensive income (loss)

9,078

7,569

Total Shareholders' Equity

1,653,626

1,536,544

Total Liabilities and Shareholders' Equity

$   3,567,250

$     3,479,500

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

1Q13

1Q12

4Q12

Net income as Reported

$113,830

$95,930

$86,623

Special Items (adjustments):

     Unrealized (gain) loss on fuel hedging instruments 

(3,376)

(5,328)

2,673

     Loss due to devaluation of Venezuelan Bolivar

13,927

Adjusted Net Income

$124,381

$90,602

$89,296

Shares used for Computation (in thousands)

     Basic and Diluted

44,387

44,341

44,409

Adjusted earnings per share - Basic and Diluted

2.80

2.04

2.01

Reconciliation Operating Costs per ASM

Excluding Fuel and Special Items

1Q13

1Q12

4Q12

Operating Costs per ASM as Reported

10.9

11.3

11.1

Aircraft fuel per ASM

(4.4)

(4.5)

(4.4)

Operating Costs per ASM excluding fuel 

6.5

6.8

6.8

SOURCE Copa Holdings, S.A.



RELATED LINKS

http://www.copaair.com