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

Nov 12, 2013, 17:00 ET from Copa Holdings, S.A.

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.



RELATED LINKS

http://www.copaair.com