2014

Copa Holdings Reports Net Income of US$126.0 Million and EPS of US$2.84 for the Third Quarter of 2013 Excluding special items, adjusted net income came in at $116.2 million, or EPS of $2.62 per share

PANAMA CITY, Nov. 12, 2013 /PRNewswire/ -- Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the third quarter of 2013 (3Q13). 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 third quarter of 2012 (3Q12).

OPERATING AND FINANCIAL HIGHLIGHTS

  • Copa Holdings reported net income of US$126.0 million for 3Q13, or diluted earnings per share (EPS) of US$2.84.  Excluding special items, Copa Holdings would have reported an adjusted net income of $116.2 million, or $2.62 per share, a 19.0% increase over adjusted net income of US$97.6 million and US$2.20 per share for 3Q12.
  • Operating income for 3Q13 came in at US$147.5 million, a 29.3% increase over operating income of US$114.1 million in 3Q12.  Operating margin for the period came in at 21.8% or 2.5 percentage points over 3Q12, mostly as a result of higher unit revenues. 
  • Total revenues increased 14.7% to US$677.3 million.  Yield per passenger mile decreased 0.1% to 17.2 cents and operating revenue per available seat mile (RASM) increased 2.8% to 13.9 cents.  However, adjusting for a 7.5% increase in average length of haul, yields increased 3.6% and RASM increased 6.6%.
  • For 3Q13, passenger traffic (RPMs) grew 15.5% on an 11.6% capacity expansion.  Consolidated load factor came in at 78.1%, or 2.6 percentage points above 3Q12.
  • Operating cost per available seat mile (CASM) improved 0.3% to 10.9 cents.  CASM, excluding fuel, increased 2.7% to 6.8 cents.
  • Cash, short term and long term investments ended 3Q13 at US$1.0 billion, representing 40.7% of the last twelve months' revenues. 
  • During the third quarter, Copa Airlines took delivery of three Boeing 737-800 aircraft.  As a result, Copa Holdings ended the quarter with a consolidated fleet of 89 aircraft. Additionally, during the months of September and October, Copa Airlines completed the extension of four 737-700 aircraft leases that were expiring in 2014. 
  • For 3Q13, Copa Holdings reported consolidated on-time performance of 87.3% and a flight-completion factor of 99.7%, maintaining its position among the best in the industry.

Consolidated Financial & Operating Highlights

3Q13

3Q12

% Change 

2Q13

% Change 

Revenue Passengers Carried ('000)

2,007

1,869

7.4%

1,861

7.8%

RPMs (mm) 

3,803

3,294

15.5%

3,475

9.4%

ASMs (mm) 

4,872

4,367

11.6%

4,618

5.5%

Load Factor 

78.1%

75.4%

2.6 p.p.

75.3%

2.8 p.p.

Yield

17.2

17.3

-0.1%

16.4

5.4%

PRASM (US$ Cents) 

13.5

13.0

3.4%

12.3

9.3%

RASM (US$ Cents) 

13.9

13.5

2.8%

12.8

8.4%

CASM (US$ Cents) 

10.9

10.9

-0.3%

10.7

1.6%

CASM Excl. Fuel (US$ Cents) 

6.8

6.6

2.7%

6.7

1.5%

Breakeven Load Factor (1)

61.4%

59.8%

1.6 p.p.

61.6%

-0.2 p.p.

Fuel Gallons Consumed (Millions) 

63.6

57.7

10.3%

60.0

6.0%

Avg. Price Per Fuel Gallon (US$ Dollars)

3.12

3.24

-3.8%

3.08

1.2%

Average Length of Haul (Miles)

1,895

1,763

7.5%

1,868

1.5%

Average Stage Length (Miles)

1,160

1,082

7.2%

1,126

3.0%

Departures

30,126

29,365

2.6%

29,357

2.6%

Block Hours

89,623

82,103

9.2%

84,985

5.5%

Average Aircraft Utilization (Hours)

11.2

11.2

0.1%

10.9

2.7%

Operating Revenues (US$ mm) 

677.3

590.4

14.7%

592.0

14.4%

Operating Income (US$ mm)

147.5

114.1

29.3%

97.7

51.0%

Operating Margin 

21.8%

19.3%

2.5 p.p.

16.5%

5.3 p.p.

Net Income (US$ mm)

126.0

111.9

12.6%

74.4

69.3%

Adjusted Net Income (US$ mm) (1)

116.2

97.6

19.0%

85.0

36.7%

EPS - Basic and Diluted (US$)

2.84

2.52

12.6%

1.68

69.2%

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

2.62

2.20

19.0%

1.92

36.6%

# of Shares - Basic and Diluted ('000) 

44,380

44,407

-0.1%

44,387

0.0%

(1)Breakeven Load Factor, Adjusted Net Income and Adjusted EPS for 3Q13, 3Q12, and 2Q13 exclude non-cash charges/gains associated with the mark-to-market of fuel hedges.   

Note: Attached to this press release is a reconciliation of non-IFRS financial measures to the comparable IFRS measures.

FULL 3Q13 EARNINGS RELEASE AVAILABLE FOR DOWNLOAD AT: http://investor.shareholder.com/copa/results.cfm

3Q13 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST

Date:

November 13, 2013



Time:

11:00 AM US ET (11:00 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



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 66 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 90 aircraft: 64 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.

Copa Holdings, S.A.










Income Statement - IFRS










(US$ Thousands)





















Unaudited


Unaudited


%


Unaudited


%


3Q13


3Q12


Change


2Q13


Change

Operating Revenues










Passenger Revenue

655,991


568,564


15.4%


568,960


15.3%

Cargo, mail and other

21,288


21,884


-2.7%


23,038


-7.6%

Total Operating Revenue

677,279


590,448


14.7%


591,998


14.4%











Operating Expenses










Aircraft fuel

198,163


186,844


6.1%


184,767


7.3%

Salaries and benefits

69,941


62,964


11.1%


66,105


5.8%

Passenger servicing

64,913


56,973


13.9%


60,389


7.5%

Commissions

27,717


23,501


17.9%


24,279


14.2%

Reservations and sales

27,588


22,203


24.2%


24,763


11.4%

Maintenance, material and repairs

25,035


23,370


7.1%


22,807


9.8%

Depreciation

26,576


23,031


15.4%


26,866


-1.1%

Flight operations

30,829


27,217


13.3%


30,028


2.7%

Aircraft rentals

23,540


18,504


27.2%


22,124


6.4%

Landing fees and other rentals

12,607


12,190


3.4%


12,789


-1.4%

Other

22,878


19,561


17.0%


19,393


18.0%

Total Operating Expense

529,787


476,359


11.2%


494,309


7.2%











Operating Income

147,492


114,089


29.3%


97,689


51.0%











Non-operating Income (Expense):










Interest expense

(7,513)


(8,124)


-7.5%


(7,560)


-0.6%

Interest income

3,127


3,235


-3.3%


2,841


10.1%

Other, net

10,700


13,750


-22.2%


(10,616)


-200.8%

Total Non-Operating Income/(Expense)

6,314


8,861


n/a


(15,336)


-141.2%











Income before Income Taxes

153,807


122,951


25.1%


82,354


86.8%











Provision for Income Taxes

27,798


11,033


152.0%


7,912


251.3%











Net Income

126,008


111,917


12.6%


74,441


69.3%





















EPS - Basic and Diluted

2.84


2.52


12.7%


1.68


69.3%

Shares - Basic and Diluted

44,379,507


44,406,679


-0.1%


44,387,279


0.0%

 

 

 

Copa Holdings, S.A.

Balance Sheet - IFRS

(US$ Thousands)

 














September 30,



December 31,



2013



2012



 (Unaudited) 



 (Audited) 

ASSETS






Current Assets:






Cash and cash equivalents


$       475,181



$          76,094

Short-term investments


499,047



575,009

Total cash, cash equivalents and short-term investments


974,228



651,103







Accounts receivable, net of allowance for doubtful accounts


173,175



135,207

Accounts receivable from related parties


2,109



1,129

Expendable parts and supplies, net of allowance for obsolescence


56,314



50,603

Prepaid expenses


62,163



63,120

Other current assets


19,073



16,328

Total Current Assets


1,287,062



917,490







Long-term investments


46,590



69,445







Property and Equipment:






Owned property and equipment:






Flight equipment


2,462,278



2,405,346

Other equipment


71,570



66,330



2,533,848



2,471,676

Less: Accumulated depreciation


(505,147)



(432,589)



2,028,701



2,039,087

Purchase deposits for flight equipment


302,371



245,544

Total Property and Equipment


2,331,072



2,284,631







Other Assets:






Net pension asset


10,826



10,009

Goodwill


25,466



27,575

Intangible asset


57,767



59,382

Other assets


110,889



110,968

Total Other Assets


204,948



207,934

Total Assets


$    3,869,672



$     3,479,500













LIABILITIES AND SHAREHOLDER'S EQUITY






Current Liabilities:






Current maturities of long-term debt


$       140,114



$        136,268

Accounts payable


101,128



104,975

Accounts payable to related parties


15,380



20,255

Air traffic liability


549,721



382,807

Taxes and interest payable


121,647



85,436

Accrued expenses payable


65,993



48,047

Other current liabilities


7,835



10,902

Total Current Liabilities


1,001,818



788,690







Non-Current Liabilities:






Long-term debt


960,462



1,069,836

Post employment benefits liability


6,309



6,340

Other long-term liabilities


49,912



43,726

Deferred tax liabilities


32,274



34,364

Total Non-Current Liabilities


1,048,957



1,154,266







Total Liabilities


2,050,775



1,942,956







Shareholders' Equity:






Class A - 33,408,055 shares issued and outstanding


22,626



22,591

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


7,466



7,466

Additional paid in capital


45,594



40,660

Retained earnings


1,739,740



1,458,258

Accumulated other comprehensive income (loss)


3,470



7,569

Total Shareholders' Equity


1,818,896



1,536,544

Total Liabilities and Shareholders' Equity


$    3,869,672



$     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


3Q13


3Q12


2Q13








Net income as Reported


$126,008


$111,917


$74,441








Special Items (adjustments):







     Unrealized (gain) loss on fuel hedging instruments 

(9,820)


(14,277)


10,582

Adjusted Net Income


$116,188


$97,640


$85,023








Shares used for Computation (in thousands)







     Basic and Diluted


44,380


44,407


44,387








Adjusted earnings per share - Basic and Diluted


2.62


2.20


1.92








Reconciliation Operating Costs per ASM






Excluding Fuel and Special Items


3Q13


3Q12


2Q13








Operating Costs per ASM as Reported


10.9


10.9


10.7

Aircraft fuel per ASM


(4.1)


(4.3)


(4.0)

Operating Costs per ASM excluding fuel 


6.8


6.6


6.7

 

CPA-G 

SOURCE Copa Holdings, S.A.



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