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

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.



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