Copa Holdings Reports Financial Results for the Second Quarter of 2021
PANAMA CITY, Aug. 4, 2021 /PRNewswire/ -- Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the second quarter of 2021 (2Q21). The terms "Copa Holdings" and "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 the financial tables section of this earnings release. Unless otherwise stated, all comparisons with prior periods refer to the second quarter of 2019 (2Q19) (which the Company believes are more relevant than year-over-year comparisons due to the significant impacts in 2020 of the COVID-19 pandemic).
OPERATING AND FINANCIAL HIGHLIGHTS
- Copa Holdings reported a net profit of US$28.1 million for the quarter or US$0.66 per share. Excluding special items, the Company would have reported a net loss of US$16.2 million or US$0.38 per share. Special items include a US$33.9 million unrealized mark-to-market gain related to the Company's convertible notes and a passenger revenue adjustment of US$10.4 million related to 2019 and 2020 sales.
- Copa Holdings reported an operating profit of US$8.7 million for the quarter. Excluding the US$10.4 million passenger revenue adjustment, the company would have reported an operating loss of US$1.7 million.
- Cash accretion, defined as cash proceeds minus disbursements, excluding extraordinary financing activities and asset sales but including capital expenditures and payment of financial obligations, averaged approximately US$21 million per month during the quarter.
- The Company ended the quarter with US$1.6 billion of available liquidity, consisting of approximately US$1.3 billion in cash, short-term and long-term investments, and US$345 million of committed and undrawn credit facilities.
- The Company closed the quarter with total debt, including lease liabilities, of US$1.6 billion.
- The Company's flight operations, measured in terms of available seat miles (ASMs), represented approximately 48% of the capacity flown in the same period in 2019.
- During the quarter, 3 Embraer 190 aircraft exited the fleet as part of a previously agreed sale to a third party. As of June 30, 2021, there was one remaining Embraer 190 aircraft pending to be delivered to the buyer.
- Excluding the aircraft classified as assets held for sale, and including aircraft in temporary storage, Copa Holdings ended the quarter with a consolidated fleet of 81 aircraft – 68 Boeing 737-800s and 13 Boeing 737 MAX 9s, compared to a total fleet of 102 aircraft at the end of the first quarter of 2020.
- During the quarter, Copa Airlines had an on-time performance of 92.1% and a flight completion factor of 99.5%, once again positioning itself amongst the best in the industry.
Subsequent Events
- In July, Copa Airlines' last remaining Embraer 190 aircraft was delivered to its new owner.
- The Company entered into an agreement for the sale of 6 737-700s and has now decided to keep the remaining 6 737-700s.
Consolidated Financial | 2Q21 | 2Q19 (3) | Variance vs. 2Q19 | 1Q21 | Variance vs. 1Q21 |
Revenue Passengers Carried (000s) | 1,175 | 2,550 | -53.9% | 924 | 27.2% |
RPMs (millions) | 2,268 | 5,249 | -56.8% | 1,716 | 32.1% |
ASMs (millions) | 2,949 | 6,166 | -52.2% | 2,481 | 18.9% |
Load Factor | 76.9% | 85.1% | -8.2 p.p. | 69.2% | 7.7 p.p. |
Yield (US$ Cents) | 12.4 | 11.8 | 4.9% | 10.1 | 23.0% |
PRASM (US$ Cents) | 9.5 | 10.1 | -5.2% | 7.0 | 36.7% |
RASM (US$ Cents) | 10.3 | 10.5 | -1.4% | 7.5 | 37.8% |
CASM (US$ Cents) | 10.0 | 9.1 | 9.8% | 10.6 | -5.4% |
CASM Excl. Fuel (US$ Cents) | 7.6 | 6.2 | 22.3% | 8.5 | -10.4% |
Fuel Gallons Consumed (millions) | 35.3 | 79.31 | -55.5% | 29.1 | 21.4% |
Avg. Price Per Fuel Gallon (US$) | 1.98 | 2.22 | -10.9% | 1.75 | 13.0% |
Average Length of Haul (miles) | 1,930 | 2,058 | -6.2% | 1,858 | 3.9% |
Average Stage Length (miles) | 1,194 | 1,279 | -6.7% | 1,256 | -5.0% |
Departures | 15,366 | 32,676 | -53.0% | 12,372 | 24.2% |
Block Hours | 46,426 | 106,425 | -56.4% | 38,851 | 19.5% |
Average Aircraft Utilization (hours) (2) | 8.0 | 11.2 | -29.1% | 6.6 | 21.3% |
Operating Revenues (US$ millions) | 304.3 | 645.1 | -52.8% | 185.7 | 63.9% |
Operating Profit (Loss) (US$ millions) | 8.7 | 82.6 | -89.4% | (77.1) | -111.3% |
Adjusted Operating Profit (Loss) (US$ millions) (1) | (1.7) | 82.6 | -102.0% | (77.1) | -97.8% |
Operating Margin | 2.9% | 12.8% | -9.9 p.p. | -41.5% | 44.4 p.p. |
Adjusted Operating Margin (1) | -0.6% | 12.8% | -13.4 p.p. | -41.5% | 40.9 p.p. |
Net Profit (Loss) (US$ millions) | 28.1 | 50.9 | -44.8% | (110.7) | -125.4% |
Adjusted Net Profit (Loss) (US$ millions) (1) | (16.2) | 50.9 | -131.9% | (95.1) | -82.9% |
Basic EPS (US$) | 0.66 | 1.20 | -45.0% | (2.60) | -125.3% |
Adjusted Basic EPS (US$) (1) | (0.38) | 1.20 | -131.8% | (2.23) | -83.0% |
Shares for calculation of Basic EPS (000s) | 42,651 | 42,478 | 0.4% | 42,571 | 0.2% |
(1) | Excludes Special Items. This earnings release includes a reconciliation of non-IFRS financial measures to the comparable IFRS measures. |
(2) | Average Aircraft Utilization is calculated based on the Company's active fleet, excluding aircraft in storage as well as those classified as assets held for sale. |
(3) | The Company believes that comparisons with 2019 are more relevant than year-over-year comparisons due to the significant impacts in 2020 of the COVID-19 pandemic. |
FULL 2Q21 EARNINGS RELEASE AVAILABLE FOR DOWNLOAD AT:
https://copa.gcs-web.com/financial-information/quarterly-results
2Q21 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST
Date: | August 5, 2021 | ||
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: | |||
Speakers: | Pedro Heilbron, Chief Executive Officer | ||
José 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 countries in North, Central and South America and the Caribbean. For more information visit: www.copa.com.
CONTACT: Copa Holdings S.A.
Investor Relations:
Ph: 011 507 304-2774
www.copa.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 | Audited | % | Audited | % | ||||||
2Q21 | 2Q19 | Change | 1Q21 | Change | ||||||
Operating Revenues | ||||||||||
Passenger revenue | 281,258 | 620,538 | -54.7% | 173,095 | 62.5% | |||||
Cargo and mail revenue | 16,689 | 16,464 | 1.4% | 7,956 | 109.8% | |||||
Other operating revenue | 6,311 | 8,100 | -22.1% | 4,626 | 36.4% | |||||
Total Operating Revenue | 304,259 | 645,102 | -52.8% | 185,677 | 63.9% | |||||
Operating Expenses | ||||||||||
Fuel | 70,156 | 177,169 | -60.4% | 51,308 | 36.7% | |||||
Wages, salaries, benefits and other employees' expenses | 55,071 | 108,342 | -49.2% | 54,575 | 0.9% | |||||
Passenger servicing | 7,502 | 25,530 | -70.6% | 5,586 | 34.3% | |||||
Airport facilities and handling charges | 27,021 | 44,698 | -39.5% | 22,044 | 22.6% | |||||
Sales and distribution | 28,441 | 51,289 | -44.5% | 21,652 | 31.4% | |||||
Maintenance, materials and repairs | 17,773 | 31,235 | -43.1% | 19,727 | -9.9% | |||||
Depreciation and amortization | 59,526 | 70,549 | -15.6% | 59,450 | 0.1% | |||||
Flight operations | 10,891 | 25,450 | -57.2% | 9,410 | 15.7% | |||||
Other operating and administrative expenses | 19,140 | 28,240 | -32.2% | 19,006 | 0.7% | |||||
Total Operating Expense | 295,523 | 562,502 | -47.5% | 262,759 | 12.5% | |||||
Operating Profit (Loss) | 8,736 | 82,601 | -89.4% | (77,081) | -111.3% | |||||
Non-operating Income (Expense): | ||||||||||
Finance cost | (18,625) | (13,573) | 37.2% | (17,818) | 4.5% | |||||
Finance income | 2,745 | 6,041 | -54.6% | 2,853 | -3.8% | |||||
Gain (loss) on foreign currency fluctuations | 764 | (2,213) | -134.5% | (1,809) | -142.2% | |||||
Net change in fair value of derivatives | 33,898 | - | n/m | (15,663) | -316.4% | |||||
Other non-operating income (expense) | 417 | (2,115) | -119.7% | (976) | -142.7% | |||||
Total Non-Operating Income/(Expense) | 19,198 | (11,859) | -261.9% | (33,412) | -157.5% | |||||
Profit (Loss) before taxes | 27,935 | 70,742 | -60.5% | (110,494) | -125.3% | |||||
Income tax expense | (138) | 19,876 | -100.7% | 239 | -157.7% | |||||
Net Profit (Loss) | 28,073 | 50,866 | -44.8% | (110,733) | -125.4% | |||||
EPS | ||||||||||
Basic | 0.66 | 1.20 | -45.0% | -2.60 | -125.3% | |||||
Shares used for calculation: | ||||||||||
Basic | 42,650,595 | 42,478,415 | 42,570,983 |
Copa Holdings, S. A. and subsidiaries | ||
Consolidated statement of financial position | ||
(US$ Thousands) | June | December |
2021 | 2020 | |
(Unaudited) | ||
ASSETS | ||
Current Assets | ||
Cash and cash equivalents | 256,764 | 119,065 |
Short-term investments | 925,680 | 770,816 |
Total cash, cash equivalents and short-term investments | 1,182,444 | 889,881 |
Accounts receivable, net | 103,956 | 63,206 |
Accounts receivable from related parties | 1,383 | 1,429 |
Expendable parts and supplies, net | 70,867 | 74,319 |
Prepaid expenses | 25,444 | 30,473 |
Prepaid income tax | 14,264 | 16,716 |
Other current assets | 7,825 | 7,805 |
223,739 | 193,948 | |
Assets held for sale | 34,157 | 135,542 |
TOTAL CURRENT ASSETS | 1,440,339 | 1,219,371 |
Long-term investments | 99,235 | 119,617 |
Long-term accounts receivable | 1,042 | 1,054 |
Long-term prepaid expenses | 6,554 | 6,066 |
Property and equipment, net | 2,255,792 | 2,147,486 |
Right of use assets | 178,103 | 214,279 |
Intangible, net | 88,031 | 95,568 |
Deferred tax assets | 37,854 | 35,595 |
Other Non-Current Assets | 15,136 | 14,348 |
TOTAL NON-CURRENT ASSETS | 2,681,748 | 2,634,013 |
TOTAL ASSETS | 4,122,088 | 3,853,385 |
LIABILITIES | ||
Loans and borrowings | 153,515 | 127,946 |
Current portion of lease liability | 79,573 | 83,605 |
Accounts payable | 97,355 | 63,461 |
Accounts payable to related parties | 4,661 | 2,970 |
Air traffic liability | 538,768 | 470,695 |
Frequent flyer deferred revenue | 93,036 | 91,213 |
Taxes Payable | 29,587 | 13,400 |
Employee benefits obligations | 13,671 | 33,995 |
Income tax payable | 1,912 | 1,023 |
Other Current Liabilities | 3,801 | 252 |
TOTAL CURRENT LIABILITIES | 1,015,879 | 888,561 |
Loans and borrowings long-term | 1,283,447 | 1,035,954 |
Lease Liability | 112,003 | 146,905 |
Net employee defined benefit liabilities | 12,018 | 14,332 |
Derivative financial instruments | 227,325 | 245,560 |
Deferred tax Liabilities | 19,534 | 22,190 |
Other long - term liabilities | 247,668 | 216,325 |
TOTAL NON-CURRENT LIABILITIES | 1,901,994 | 1,681,265 |
TOTAL LIABILITIES | 2,917,874 | 2,569,825 |
EQUITY | ||
Issued Capital | ||
Class A - 33,998,981 issued and 31,545,862 outstanding | 21,284 | 21,199 |
Class B common stock - 10,938,125 | 7,466 | 7,466 |
Additional Paid-In Capital | 94,588 | 91,341 |
Treasury Stock | (136,388) | (136,388) |
Retained Earnings | 1,324,025 | 1,931,086 |
Net loss | (82,660) | (607,062) |
Other comprehensive loss | (24,099) | (24,082) |
TOTAL EQUITY | 1,204,214 | 1,283,560 |
TOTAL EQUITY & LIABILITIES | 4,122,088 | 3,853,385 |
Copa Holdings, S. A. and subsidiaries | ||||||||||||||
Consolidated Statement of Cash Flows | ||||||||||||||
For the six months ended June 30, | ||||||||||||||
(In US$ thousands) | ||||||||||||||
2021 | 2020 | 2019 | ||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||
Cash flow from (used in) operating activities | 149,669 | (56,632) | 331,143 | |||||||||||
Cash flow used in investing activities | (119,776) | (48,009) | (8,691) | |||||||||||
Cash flow from (used in) financing activities | 107,806 | 253,205 | (252,469) | |||||||||||
Net increase in cash and cash equivalents | 137,699 | 148,564 | 69,982 | |||||||||||
Cash and cash equivalents at January 1 | 119,065 | 158,733 | 156,158 | |||||||||||
Cash and cash equivalents at June 30 | $ 256,764 | $ 307,297 | $ 226,140 | |||||||||||
Short-term investments | 925,680 | 740,887 | 523,134 | |||||||||||
Long-term investments | 99,235 | 94,540 | 144,072 | |||||||||||
Total cash and cash equivalents and investments at June 30 | $ 1,281,679 | $ 1,142,724 | $ 893,346 | |||||||||||
Copa Holdings, S.A.
NON-IFRS FINANCIAL MEASURE RECONCILIATION
This press release includes the following non-IFRS financial measures: Adjusted Operating Profit, Adjusted Net Profit, Adjusted Basic EPS and Monthly Cash Consumption. 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 profit and net profit. The following is a reconciliation of these non-IFRS financial measures to the comparable IFRS measures:
Reconciliation of Adjusted Operating Profit | |||||||||||||
and Adjusted Net Profit | 2Q21 | 2Q20 | 1Q21 | 2Q19 | |||||||||
Operating Profit as Reported | $ | 8,736 | $ | (357,875) | $ | (77,081) | $ | 82,601 | |||||
Add: Unredeemed Ticket Revenue provision reversal | $ | (10,395) | $ | 12,341 | |||||||||
Add: Fleet Impairment loss | $ | 186,807 | |||||||||||
Add: Expected loss (gain) on Embraer assets held for sale | $ | 50,048 | |||||||||||
Adjusted Operating Profit | $ | (1,659) | $ | (108,679) | $ | (77,081) | $ | 82,601 | |||||
Net Profit as Reported | $ | 28,073 | $ | (386,018) | $ | (110,733) | $ | 50,866 | |||||
Add: Unredeemed Ticket Revenue provision reversal | $ | (10,395) | $ | 12,341 | |||||||||
Add: Fleet Impairment loss | $ | 186,807 | |||||||||||
Add: Expected loss (gain) on Embraer assets held for sale | $ | 50,048 | |||||||||||
Add: Net change in fair value of derivatives | $ | (33,898) | $ | 22,198 | $ | 15,663 | |||||||
Adjusted Net Profit | $ | (16,220) | $ | (114,624) | $ | (95,070) | $ | 50,866 | |||||
Reconciliation of Adjusted Basic EPS | 2Q21 | 2Q20 | 1Q21 | 2Q19 | |||||||||
Adjusted Net Profit | $ | (16,220) | $ | (114,624) | $ | (95,070) | $ | 50,866 | |||||
Shares used for calculation of Basic EPS | 42,651 | 42,512 | 42,571 | 42,478 | |||||||||
Adjusted Basic Earnings per share (Adjusted Basic EPS) | $ | (0.38) | $ | (2.70) | $ | (2.23) | $ | 1.20 | |||||
Reconciliation of Monthly Cash Accretion (Consumption) for 2020 and 2021 | 2Q21 | 1Q21 | 4Q20 | 3Q20 | |||||||||
Beginning Cash balance | $ | 1,203 | $ | 1,009 | $ | 1,006 | $ | 1,143 | |||||
Ending Cash balance | $ | 1,282 | $ | 1,203 | $ | 1,009 | $ | 1,006 | |||||
Net cashflows in the quarter | $ | 79 | $ | 194 | $ | 4 | $ | (137) | |||||
Subtract: Net Proceeds from new Aircraft Financing & Pre Delivery Payments | $ | (21) | $ | 241 | $ | - | $ | - | |||||
Subtract: Others proceeds (assets sold and other non-op proceeds) | $ | 36 | $ | 20 | $ | 23 | $ | 22 | |||||
Add: Repayment of short term credit lines | $ | - | $ | - | $ | - | $ | 50 | |||||
Cash Consumption excluding extraordinary activities | $ | 64 | $ | (68) | $ | (19) | $ | (109) | |||||
Monthly Cash Accretion (Consumption) excluding extraordinary activities | $ | 21 | $ | (23) | $ | (6) | $ | (36) |
SOURCE Copa Holdings, S.A.
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