Copa Holdings Reports Net Income of US$86.6 Million for the Fourth Quarter of 2012 and US$326.5 Million for Full Year 2012

Feb 06, 2013, 16:05 ET from Copa Holdings, S.A.

PANAMA CITY, Feb. 6, 2013 /PRNewswire/ -- Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the fourth quarter of 2012 (4Q12) and full year 2012. The terms "Copa Holdings" or "the Company" refers 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 fourth quarter of 2011 (4Q11).

OPERATING AND FINANCIAL HIGHLIGHTS

  • Copa Holdings reported net income of US$86.6 million for 4Q12 or earnings per share (EPS) of US$1.95, as compared to net income of US$104.4 million or EPS of US$2.36 in 4Q11.  Excluding special items, Copa Holdings reported an adjusted net income of US$89.3 million or adjusted EPS of $2.01, compared to adjusted net income of US$85.3 million or adjusted EPS of $1.93 in 4Q11. 
  • Net income for full year 2012 reached US$326.5 million or EPS of US$7.35, compared to US$310.4 million or EPS of US$6.98 for full year 2011.  Excluding special items, however, Copa Holdings would have reported an adjusted net income of US$336.1 million or EPS of US$7.57, compared to adjusted net income of US$314.1 or adjusted EPS of $7.06 for full year 2011.
  • Operating income for 4Q12 came in at US$104.3 million, representing a 6.5% decline from operating income of US$111.5 million in 4Q11, mainly as a result of a 3.7% drop in unit operating revenue per available seat mile (RASM) and a 6.3% increase in the all-in price of jet fuel.  As a result, operating margin for 4Q12 came in at 17.4%, or 4.5 percentage points below 4Q11. 
  • The Company reported operating income of US$402.5 million for full year 2012, representing an increase of 4.6% over operating income of US$385.0 million in 2011.  Operating margin for full year 2012 came in at 17.9%, as compared to an operating margin of 21.0% in 2011.
  • Total revenues for 4Q12 increased 17.7% to US$599.8 million. Yield per passenger mile decreased 4.1% to 17.1 cents and RASM came in at 13.5 cents, or 3.7% below 4Q11.  However, on a quarter over quarter basis, both yields and RASM remained relatively flat over our third quarter high season, declining only 0.9% and 0.2%, respectively. 
  • For 4Q12 consolidated passenger traffic grew 23.7%, led by international traffic growth which expanded a robust 26.0%.  At the same time, consolidated capacity grew 22.3%, led by a 24.4% increase in international capacity.  As a result, consolidated load factor for the quarter increased 0.8 percentage points to 75.7%.  For full year 2012, consolidated load factor came in at 75.4%, down 0.9 percentage points from 2011, on 24.1% capacity growth. 
  • Operating cost per available seat mile (CASM) increased 1.8%, from 11.0 cents in 4Q11 to 11.1 cents in 4Q12 as a result of an increase in the all-in price of jet fuel.  However, CASM excluding fuel cost decreased 1.3% from 6.9 cents in 4Q11 to 6.8 cents in 4Q12, as a result of lower labor, maintenance and distribution unit costs, which were partly offset mainly by higher passenger servicing costs and other administrative expenses.
  • Cash, short term and long term investments ended 2012 at US$720.5 million, representing 32% of the last twelve months' revenues. 
  • During the fourth quarter, Copa Airlines took delivery of two Boeing 737-800s and returned one leased Boeing 737-800 aircraft.  As a result, Copa Holdings ended the year with a consolidated fleet of 83 aircraft, composed of 18 Boeing 737-700s, 39 Boeing 737-800s and 26 Embraer-190s.
  • During the fourth quarter, Copa Holdings and Boeing agreed to reschedule four future B737-800 aircraft deliveries (2 firm and 2 options).  As a result, the company now has eight firm deliveries of Boeing 737-800 aircraft and four lease expirations of B737-700 aircraft for 2014.
  • For 2012, Copa Holdings reported on-time performance of 85.5% and a flight-completion factor of 99.6%, maintaining its position among the best in the industry.

Subsequent Events

  • In January 2013, Copa Holdings completed the sale-leaseback of eight Boeing 737-800 aircraft, four of which involve 2013 deliveries and four involving 2014 deliveries.  The sale-leaseback transactions for the 2013 deliveries were closed with MC Aviation Partners, the aircraft leasing arm of Mitsubishi Corporation, and the sale-leaseback transactions for the 2014 deliveries were closed with SMBC Aviation Capital.
  • Effective March 15, 2013, and after 17 years of valuable service, Copa Holdings' CFO, Mr. Victor Vial, will be resigning.  Mr. Vial will continue to be involved with the company as an advisor to the Board of Directors. The company is currently undergoing a selection process to appoint a new CFO.

Consolidated Financial & Operating Highlights

4Q12

Variance vs. 4Q11

Variance vs. 3Q12

FY 2012

Variance vs. 2011

Revenue Passengers Carried ('000)

1,899

17.8%

1.6%

7,140

13.5%

RPMs (mm) 

3,366

23.7%

2.2%

12,499

22.6%

ASMs (mm) 

4,447

22.3%

1.8%

16,567

24.1%

Load Factor 

75.7%

0.8p.p.

0.4%

75.4%

-0.9p.p.

Yield

17.1

-4.1%

-0.9%

17.3

1.0%

PRASM (US$ Cents) 

12.9

-3.0%

-0.5%

13.1

-0.2%

RASM (US$ Cents) 

13.5

-3.7%

-0.2%

13.6

-1.0%

CASM (US$ Cents) 

11.1

1.8%

2.2%

11.1

2.9%

CASM Excl. Fuel (US$ Cents) 

6.8

-1.3%

2.1%

6.8

0.5%

Breakeven Load Factor (1)

61.6%

2.6p.p.

1.8p.p.

61.3%

1.4p.p.

Fuel Gallons Consumed (Millions) 

58.4

23.3%

1.3%

219.5

24.4%

Avg. Price Per Fuel Gallon (US$ Dollars)

3.34

6.3%

3.0%

3.31

6.6%

Average Length of Haul (Miles)

1,772

5.0%

0.6%

1,751

8.0%

Average Stage Length (Miles)

1,090

2.2%

0.6%

1,076

5.8%

Departures

29,555

15.9%

0.7%

112,551

12.7%

Block Hours

83,146

21.4%

1.3%

313,321

22.6%

Average Aircraft Utilization (Hours)

11.0

5.4%

-1.7%

10.9

4.4%

Operating Revenues (US$ mm) 

599.8

17.7%

1.6%

2,249.4

22.9%

Operating Income (US$ mm)

104.3

-6.5%

-8.6%

402.5

4.6%

Operating Margin 

17.4%

-4.5p.p.

-1.9p.p.

17.9%

-3.1p.p.

Net Income (US$ mm)

86.6

-17.0%

-22.6%

326.5

5.2%

Adjusted Net Income (US$ mm) (1)

89.3

4.7%

-8.5%

336.1

7.0%

EPS - Basic and Diluted (US$)

1.95

-17.2%

-22.6%

7.35

5.4%

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

2.01

4.4%

-8.6%

7.57

7.2%

# of Shares - Basic and Diluted ('000) 

44,409

0.2%

0.0%

44,400

-0.2%

 (1) Breakeven Load Factor, Adjusted Net Income and Adjusted EPS for 4Q12, 4Q11, and 3Q12 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 4Q12 EARNINGS RELEASE AVAILABLE FOR DOWNLOAD AT: http://investor.shareholder.com/copa/results.cfm

4Q12 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST

Date:

February 7, 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

Victor Vial, 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 83 aircraft: 57 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

%

Unaudited

Audited

%

4Q12

4Q11

Change

3Q12

Change

2012

2011

Change

Operating Revenues

Passenger Revenue

575,731

485,324

18.6%

568,564

1.3%

2,163,136

1,747,102

23.8%

Cargo, mail and other

24,109

24,125

-0.1%

21,884

10.2%

86,252

83,819

2.9%

Total Operating Revenue

599,839

509,449

17.7%

590,448

1.6%

2,249,388

1,830,921

22.9%

Operating Expenses

Aircraft fuel

194,754

148,678

31.0%

186,844

4.2%

725,763

547,221

32.6%

Salaries and benefits

65,782

57,854

13.7%

62,964

4.5%

247,405

213,094

16.1%

Passenger servicing

59,788

45,903

30.2%

56,973

4.9%

217,137

160,725

35.1%

Commissions

22,382

19,750

13.3%

23,501

-4.8%

89,378

72,947

22.5%

Reservations and sales

22,112

18,813

17.5%

22,203

-0.4%

84,992

70,363

20.8%

Maintenance, material and repairs

24,311

22,323

8.9%

23,370

4.0%

92,166

70,969

29.9%

Depreciation

24,446

19,727

23.9%

23,031

6.1%

89,217

75,458

18.2%

Flight operations

27,747

22,251

24.7%

27,217

1.9%

104,993

83,782

25.3%

Aircraft rentals

19,472

15,573

25.0%

18,504

5.2%

72,468

51,259

41.4%

Landing fees and other rentals

12,266

10,388

18.1%

12,190

0.6%

46,233

41,881

10.4%

Other

22,510

16,684

34.9%

19,561

15.1%

77,101

58,237

32.4%

Total Operating Expense

495,570

397,943

24.5%

476,359

4.0%

1,846,852

1,445,936

27.7%

Operating Income

104,269

111,506

-6.5%

114,089

-8.6%

402,535

384,985

4.6%

Non-operating Income (Expense):

Interest expense

(8,130)

(8,808)

-7.7%

(8,124)

0.1%

(32,795)

(32,680)

0.4%

Interest income

3,427

2,152

59.2%

3,235

5.9%

11,689

6,774

72.6%

Other, net

(2,721)

11,605

nm

13,750

nm

(15,086)

(13,068)

15.4%

Total Non-Operating Income/(Expense)

(7,424)

4,950

nm

8,861

nm

(36,192)

(38,974)

-7.1%

Income before Income Taxes

96,845

116,456

-16.8%

122,951

-21.2%

366,343

346,011

5.9%

Provision for Income Taxes

10,222

12,073

-15.3%

11,033

-7.4%

39,867

35,586

12.0%

Net Income

86,623

104,383

-17.0%

111,917

-22.6%

326,476

310,425

5.2%

EPS - Basic and Diluted

1.95

2.36

-17.2%

2.52

-22.6%

7.35

6.98

5.4%

Shares - Basic and Diluted

44,409,211

44,314,505

0.2%

44,406,679

0.0%

44,400,224

44,493,779

-0.2%

  

Copa Holdings, S.A.

Balance Sheet - IFRS

(US$ Thousands)

December 31,

September 30,

December 31,

2012

2012

2011

 (Unaudited) 

 (Unaudited) 

 (Audited) 

Current Assets:

Cash and cash equivalents

166,265

$       282,642

$   243,801

Short-term investments

484,838

441,349

262,345

Total cash, cash equivalents and short-term investments

651,103

723,991

506,146

Accounts receivable, net of allowance for doubtful accounts

135,207

143,057

142,297

Accounts receivable from related parties

1,129

505

704

Expendable parts and supplies, net of allowance for obsolescence

50,603

51,292

42,382

Prepaid expenses

63,120

49,745

40,058

Other current assets

16,328

17,964

22,655

Total Current Assets

917,490

986,554

754,242

Long-term investments

69,445

71,500

104,834

Property and Equipment:

Owned property and equipment:

Flight equipment

2,405,346

2,346,637

2,036,983

Other equipment

66,330

63,757

67,577

2,471,676

2,410,394

2,104,560

Less: Accumulated depreciation

(432,589)

(408,965)

(346,656)

2,039,087

2,001,429

1,757,904

Purchase deposits for flight equipment

245,544

163,696

242,287

Total Property and Equipment

2,284,631

2,165,125

2,000,191

Other Assets:

Net pension asset

10,009

9,685

8,974

Goodwill

27,575

27,081

25,099

Intangible asset

59,382

57,537

47,047

Other assets

114,933

120,776

125,409

Total Other Assets

211,899

215,079

206,529

Total Assets

$    3,483,465

$     3,438,258

$   3,065,796

LIABILITIES AND SHAREHOLDER'S EQUITY

Current Liabilities:

Current maturities of long-term debt

$       136,268

$        118,387

$      131,069

Accounts payable

104,975

105,609

92,842

Accounts payable to related parties

20,255

14,765

22,074

Air traffic liability

382,807

360,223

297,135

Taxes and interest payable

85,436

86,174

71,223

Accrued expenses payable

48,047

45,753

30,472

Other current liabilities

10,902

9,897

13,845

Total Current Liabilities

788,690

740,808

658,660

Non-Current Liabilities:

Long-term debt

1,069,836

1,067,549

936,657

Post employment benefits liability

6,340

6,286

5,847

Other long-term liabilities

43,726

44,635

44,657

Deferred tax liabilities

38,329

31,888

30,444

Total Non-Current Liabilities

1,158,231

1,150,358

1,017,605

Total Liabilities

1,946,921

1,891,166

1,676,265

Shareholders' Equity:

Class A - 33,391,400 shares issued and outstanding

22,591

22,496

22,495

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

7,466

7,466

7,466

Additional paid in capital

40,660

38,977

33,567

Retained earnings

1,458,258

1,471,258

1,324,394

Accumulated other comprehensive income (loss)

7,569

6,895

1,609

Total Shareholders' Equity

1,536,544

1,547,092

1,389,531

Total Liabilities and Shareholders' Equity

$    3,483,465

$     3,438,258

$   3,065,796

Copa Holdings, S.A.

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

4Q12

4Q11

3Q12

2012

2011

Net income as Reported

$86,623

$104,383

$111,917

$326,476

$310,425

Special Items (adjustments):

     Unrealized (gain) loss on fuel hedging instruments (1)

2,673

(19,069)

(14,277)

9,577

3,634

    Other Special Items, net (2)

-

-

-

-

Adjusted Net Income

$89,296

$85,314

$97,640

$336,053

$314,059

Shares used for Computation (in thousands)

    Basic and Diluted

44,409

44,315

44,407

44,400

44,494

Adjusted earnings per share

     Basic and Diluted

2.01

1.93

2.20

7.57

7.06

Reconciliation Operating Costs per ASM

Excluding Fuel and Special Items

4Q12

4Q11

3Q12

2012

2011

Operating Costs per ASM as Reported

11.1

10.9

10.9

11.1

10.8

Aircraft fuel per ASM

(4.4)

(4.1)

(4.3)

(4.4)

(4.1)

Operating Costs per ASM excluding fuel 

6.8

6.9

6.6

6.8

6.7

FOOTNOTES:

(1)    Include unrealized gains resulting from the mark-to-market accounting for changes in the fair value of fuel hedging instruments. 

SOURCE Copa Holdings, S.A.



RELATED LINKS

http://www.copaair.com