2014

Copa Holdings Reports Net Income of US$95.9 Million and EPS of US$2.16 for the First Quarter of 2012 Excluding special items, adjusted net income came in at $90.6 million, or EPS of $2.04 per share

PANAMA CITY, May 9, 2012 /PRNewswire/ -- Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the first quarter of 2012(1Q12). 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 2011 (1Q11).

OPERATING AND FINANCIAL HIGHLIGHTS

  • Copa Holdings reported net income of US$95.9 million for 1Q12, or diluted earnings per share (EPS) of US$2.16.  Excluding special items, Copa Holdings would have reported an adjusted net income of $90.6 million, or $2.04 per share, a 10.5% increase over adjusted net income of US$82.0 million and US$1.86 per share for 1Q11.
  • Operating income for 1Q12 came in at US$111.6 million, a 12.0% increase over operating income of US$99.6 million in 1Q11.  Operating margin for the period came in at 20.5%, compared to 23.7% in 1Q11, mostly as a result of a 19.5% increase in the effective price of jet fuel.  
  • Total revenues increased 29.5% to US$543.3 million, outpacing a strong capacity expansion.  Yield per passenger mile increased 6.8% to 17.7 cents and operating revenue per available seat mile (RASM) increased 5.5% to 14.2 cents, despite a 15.6% increase in average length of haul.  
  • For 1Q12, robust demand trends resulted in passenger traffic (RPMs) growth of 22.4% on a 22.8% capacity expansion.  Consolidated load factor came in at 77.2%, or 0.2 percentage point below 1Q11.
  • Operating cost per available seat mile (CASM) increased 9.9%, from 10.3 cents in 1Q11 to 11.3 cents in 1Q12.  CASM, excluding fuel costs, increased 4.2% to 6.8 cents, mainly due to increased passenger servicing and aircraft rental costs.
  • Cash, short term and long term investments ended 1Q12 at US$647.8 million, representing 33% of the last twelve months' revenues.  
  • During the first quarter, Copa Airlines took delivery of four Boeing 737-800 aircraft.  As a result, Copa Holdings ended the quarter with a consolidated fleet of 77 aircraft.
  • For 1Q12, Copa Holdings reported consolidated on-time performance of 85.9% and a flight-completion factor of 99.6%, maintaining its position among the best in the industry.

RECENT DEVELOPMENTS

  • The Board of Directors of Copa Holdings S.A. (NYSE: CPA) at its regular meeting held on May 9, 2012, declared an annual dividend of US$2.10 per share on all outstanding Class A and Class B shares.  This dividend, which is in accordance with the Company's dividend policy, represents 30% of 2011 consolidated net income. The dividend will be paid on June 15, 2012 to stockholders of record as of May 31, 2012.

Consolidated Financial & Operating Highlights

1Q12

1Q11

% Change

4Q11

% Change

Revenue Passengers Carried ('000)

1,714

1,619

5.8%

1,737

-1.3%

RPMs (mm)

2,954

2,414

22.4%

2,722

8.5%

ASMs (mm)

3,829

3,119

22.8%

3,635

5.3%

Load Factor

77.2%

77.4%

-0.2 p.p.

74.9%

2.3 p.p.

Yield

17.7

16.6

6.8%

17.8

-0.6%

PRASM (US$ Cents)

13.7

12.9

6.4%

13.4

2.5%

RASM (US$ Cents)

14.2

13.4

5.5%

14.0

1.2%

CASM (US$ Cents)

11.3

10.3

9.9%

10.9

3.0%

CASM Excl. Fuel (US$ Cents)

6.8

6.5

4.2%

6.9

-0.7%

Breakeven Load Factor (1)

61.2%

58.3%

2.9 p.p.

59.0%

2.2 p.p.

Fuel Gallons Consumed (Millions)

51.3

41.6

23.2%

47.3

8.3%

Avg. Price Per Fuel Gallon (US$ Dollars)

3.33

2.79

19.5%

3.14

6.1%

Average Length of Haul (Miles)

1,724

1,492

15.6%

1,567

10.0%

Average Stage Length (Miles)

1,066

968

10.1%

1,066

0.0%

Departures

26,647

24,943

6.8%

25,499

4.5%

Block Hours

73,480

60,760

20.9%

68,479

7.3%

Average Aircraft Utilization (Hours)

11.0

10.6

3.5%

10.4

5.3%

Operating Revenues (US$ mm)

543.3

419.5

29.5%

509.4

6.6%

Operating Income (US$ mm)

111.6

99.6

12.0%

111.5

0.0%

Operating Margin

20.5%

23.7%

-3.2 p.p.

21.9%

-1.4 p.p.

Net Income (US$ mm)

95.9

94.4

1.6%

104.4

-8.1%

Adjusted Net Income (US$ mm) (1)

90.6

82.0

10.5%

85.3

6.2%

EPS - Basic and Diluted (US$)

2.16

2.14

1.1%

2.36

-8.2%

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

2.04

1.86

10.0%

1.93

6.1%

# of Shares - Basic and Diluted ('000)

44,341

44,139

0.5%

44,315

0.1%



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

1Q12 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST




Date:

May 10, 2012



Time:

11:00 a.m. US EDT (10:00 a.m. 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











CONTACT: Copa Holdings S.A.
Investor Relations:
Ph: (507) 304-2677
www.copaair.com (IR section)

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

%


1Q12

1Q11

Change

4Q11

Change

Operating Revenues






Passenger Revenue

523,812

400,887

30.7%

485,324

7.9%

Cargo, mail and other

19,444

18,661

4.2%

24,125

-19.4%

Total Operating Revenue

543,257

419,548

29.5%

509,449

6.6%







Operating Expenses






Aircraft fuel

170,875

116,141

47.1%

148,678

14.9%

Salaries and benefits

57,536

48,345

19.0%

57,854

-0.5%

Passenger servicing

49,433

34,983

41.3%

45,903

7.7%

Commissions

22,223

18,072

23.0%

19,750

12.5%

Reservations and sales

20,090

15,472

29.8%

18,813

6.8%

Maintenance, material and repairs

20,530

15,344

33.8%

22,323

-8.0%

Depreciation

20,526

17,817

15.2%

19,727

4.1%

Flight operations

25,039

19,869

26.0%

22,251

12.5%

Aircraft rentals

17,300

11,227

54.1%

15,573

11.1%

Landing fees and other rentals

10,846

9,717

11.6%

10,388

4.4%

Other

17,300

12,975

33.3%

16,684

3.7%

Total Operating Expense

431,699

319,963

34.9%

397,943

8.5%







Operating Income

111,558

99,585

12.0%

111,506

0.0%







Non-operating Income (Expense):






Interest expense

-7,959

-7,926

0.4%

-8,808

-9.6%

Interest capitalized

0

0

nm

0

nm

Interest income

2,286

1,252

82.7%

2,152

6.2%

Other, net

4,866

10,876

-55.3%

11,605

-58.1%

Total Non-Operating Income/(Expense)

-806

4,202

n/a

4,950

-116.3%







Income before Income Taxes

110,751

103,787

6.7%

116,456

-4.9%







Provision for Income Taxes

14,822

9,341

58.7%

12,073

22.8%







Net Income

95,930

94,446

1.6%

104,383

-8.1%













EPS - Basic and Diluted

2.16

2.14

1.1%

2.36

-8.2%

Shares - Basic and Diluted

44,340,562

44,139,277

0.5%

44,314,505

0.1%



Copa Holdings, S.A.



Balance Sheet - IFRS



(US$ Thousands)

March 31,

December 31,


2011

2011


(Unaudited)

(Audited)

ASSETS



Current Assets:



Cash and cash equivalents

$       218,665

$        243,801

Short-term investments

254,303

262,345

Total cash, cash equivalents and short-term investments

472,969

506,146




Accounts receivable, net of allowance for doubtful accounts

150,173

142,297

Accounts receivable from related parties

273

704

Expendable parts and supplies, net of allowance for obsolescence

46,688

42,382

Prepaid expenses

45,748

40,058

Other current assets

27,317

22,655

Total Current Assets

743,167

754,242




Long-term investments

174,852

104,834




Property and Equipment:



Owned property and equipment:



Flight equipment

2,128,532

2,036,983

Other equipment

69,777

67,577


2,198,309

2,104,560

Less: Accumulated depreciation

(366,983)

(346,656)


1,831,326

1,757,904

Purchase deposits for flight equipment

235,183

242,287

Total Property and Equipment

2,066,508

2,000,191




Other Assets:



Net pension asset

9,120

8,974

Goodwill

27,208

25,099

Intangible asset

51,186

47,047

Other assets

133,234

125,409

Total Other Assets

220,748

206,529

Total Assets

$    3,205,278

$     3,065,796







LIABILITIES AND SHAREHOLDER'S EQUITY



Current Liabilities:



Current maturities of long-term debt

$       113,932

$        131,069

Accounts payable

89,709

92,842

Accounts payable to related parties

20,813

22,074

Air traffic liability

282,988

297,135

Taxes and interest payable

86,495

71,223

Accrued expenses payable

34,550

30,472

Other current liabilities

10,362

13,845

Total Current Liabilities

638,849

658,660




Non-Current Liabilities:



Long-term debt

987,375

936,657

Post employment benefits liability

5,895

5,847

Other long-term liabilities

48,951

44,657

Deferred tax liabilities

32,386

30,444

Total Non-Current Liabilities

1,074,606

1,017,605




Total Liabilities

1,713,455

1,676,265




Shareholders' Equity:



Class A - 33,341,822 shares issued and outstanding

22,496

22,495

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

7,466

7,466

Additional paid in capital

35,575

33,567

Retained earnings

1,420,324

1,324,394

Accumulated other comprehensive income (loss)

5,962

1,609

Total Shareholders' Equity

1,491,823

1,389,531

Total Liabilities and Shareholders' Equity

$    3,205,278

$     3,065,796



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

1Q12

1Q11

4Q11





Net income as Reported

$95,930

$94,446

$104,383





Special Items (adjustments):




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

-5,328

-12,457

-19,069

Adjusted Net Income

$90,602

$81,989

$85,314





Shares used for Computation (in thousands)




    Basic and Diluted

44,341

44,139

44,315





Adjusted earnings per share - Basic and Diluted

2.04

1.86

1.93





Reconciliation Operating Costs per ASM




Excluding Fuel and Special Items

1Q12

1Q11

4Q11





Operating Costs per ASM as Reported

11.3

10.3

10.9

Aircraft fuel per ASM

(4.5)

(3.7)

(4.1)

Operating Costs per ASM excluding fuel

6.8

6.5

6.9



FOOTNOTES:

(1) Includes unrealized (gains) losses resulting from the mark-to-market accounting for changes in the fair value of fuel hedging instruments.  For 1Q12, 1Q11 and 4Q11, the Company recorded unrealized fuel hedge gains of US$5.3 million, US$12.5 million and US$19.1 million, respectively.

SOURCE Copa Holdings, S.A.



RELATED LINKS
http://www.copaair.com
http://investor.shareholder.com/copa/events.cfm

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