Copa Holdings Reports Net Income of US$113.9 Million for the Fourth Quarter of 2013
PANAMA CITY, Feb. 12, 2014 /PRNewswire/ -- Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the fourth quarter of 2013 (4Q13) and full year 2013. 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 2012 (4Q12).
OPERATING AND FINANCIAL HIGHLIGHTS
- Copa Holdings reported net income of US$113.9 million for 4Q13 or earnings per share (EPS) of US$2.57, as compared to net income of US$86.6 million or EPS of US$1.95 in 4Q12. Excluding special items, which for 4Q13 includes a non-cash impairment charge of US$31.2 million on Intangible Assets booked in 2005 related to the acquisition of AeroRepublica (now Copa Colombia) and a non-cash gain of US$2.6 million associated with the mark-to-market of fuel hedge contracts, Copa Holdings would have reported adjusted net income of US$142.5 million or adjusted EPS of US$3.21, compared to adjusted net income of US$89.3 million or adjusted EPS of US$2.01 in 4Q12.
- Net income for full year 2013 reached US$428.2 million or EPS of US$9.64, compared to US$326.5 million or EPS of US$7.35 for full year 2012. Excluding special items, which for 2013 includes a non-cash impairment charge of US$31.2 million on Intangible Assets booked in 2005 related to the acquisition of AeroRepublica (now Copa Colombia), a US$13.9 million loss related to the Venezuelan devaluation of February 2013, and a non-cash gain of US$5.2 million associated with the mark-to-market of fuel hedge contracts, Copa Holdings would have reported an adjusted net income of US$468.1 million or EPS of US$10.54, compared to adjusted net income of US$336.1 or adjusted EPS of US$7.57 for full year 2012.
- Operating income for 4Q13 came in at US$130.7 million, representing a 25% increase over operating income of US$104.3 million in 4Q12, mainly as a result of a 6.2% increase in unit operating revenue per available seat mile (RASM) and a 6.5% drop in the all-in price of jet fuel. As a result, operating margin for 4Q13 came in at 18.7%, or 1.3 percentage points higher than 4Q12. Excluding special items, operating income would have been US$161.8 million, which would have represented an operating margin of 23.2%, or 5.8 percentage points higher than 4Q12.
- The Company reported operating income of US$518.5 million for full year 2013, representing an increase of 28.8% over operating income of US$402.5 million in 2012. Operating margin for full year 2013 came in at 19.9%, as compared to an operating margin of 17.9% in 2012. However, excluding the intangible impairment charge of US$31.2 million recorded in 4Q13, the adjusted operating margin for 2013 would have been 21.1%.
- Total revenues for 4Q13 increased 16.3% to US$697.8 million. Yield per passenger mile increased 5.8% to 18.1 cents and RASM came in at 14.3 cents, or 6.2% above 4Q12. On a quarter-over-quarter basis, both yields and RASM increased over our third quarter high season, rising 4.9% and 3.1%, respectively.
- For 4Q13 consolidated passenger traffic grew 10.7%, led by international traffic growth which expanded a robust 12.2%. At the same time, consolidated capacity grew 9.5%, led by a 10.9% increase in international capacity. As a result, consolidated load factor for the quarter increased 0.8 percentage points to 76.5%. For full year 2013, consolidated load factor came in at 76.7%, up 1.2 percentage points from 2012, on 14.4% capacity growth.
- Operating cost per available seat mile (CASM) increased 4.5%, from 11.1 cents in 4Q12 to 11.7 cents in 4Q13 as a result of the non-cash intangible impairment charge partly offset by a decrease in the all-in price of jet fuel. However, CASM excluding special items decreased 1.2% to 11.0 cents. CASM excluding fuel cost and special items increased 2.1% from 6.8 cents in 4Q12 to 6.9 cents in 4Q13, as a result of higher distribution unit costs related to the higher revenues, and aircraft rentals, which were partly offset mainly by lower maintenance costs and other rentals.
- Cash, short term and long term investments ended 2013 at US$1,169.4 million, representing 45% of the last twelve months' revenues.
- During the fourth quarter, Copa Airlines took delivery of one Boeing 737-800 aircraft. As a result, Copa Holdings ended the year with a consolidated fleet of 90 aircraft, composed of 18 Boeing 737-700s, 46 Boeing 737-800s and 26 Embraer-190s.
- For 2013, Copa Holdings reported international on-time performance of 88.6%, 80.8% for domestic and 87.7% overall, as well as a flight-completion factor of 99.6%, maintaining its position among the best in the industry.
| Consolidated Financial & |
4Q13 |
Variance vs. 4Q12 |
Variance vs. 3Q13 |
FY 2013 |
Variance vs. 2012 |
||
| Revenue Passengers Carried ('000) |
2,013 |
6.0% |
0.3% |
7,779 |
8.9% |
||
| RPMs (mm) |
3,725 |
10.7% |
-2.1% |
14,533 |
16.3% |
||
| ASMs (mm) |
4,870 |
9.5% |
-0.1% |
18,950 |
14.4% |
||
| Load Factor |
76.5% |
0.8 p.p. |
-1.6 p.p. |
76.7% |
1.2 p.p. |
||
| Yield |
18.1 |
5.8% |
4.9% |
17.3 |
0.2% |
||
| PRASM (US$ Cents) |
13.8 |
6.9% |
2.8% |
13.3 |
1.8% |
||
| RASM (US$ Cents) |
14.3 |
6.2% |
3.1% |
13.8 |
1.4% |
||
| CASM (US$ Cents) |
11.6 |
4.5% |
7.1% |
11.0 |
-1.1% |
||
| Adjusted CASM (US$ Cents) (1) |
11.0 |
-1.2% |
1.2% |
10.9 |
-2.5% |
||
| CASM Excl. Fuel (US$ Cents) |
7.6 |
11.6% |
10.9% |
6.9 |
1.9% |
||
| Adjusted CASM Excl. Fuel (US$ Cents) (1) |
6.9 |
2.1% |
1.5% |
6.7 |
-0.5% |
||
| Breakeven Load Factor (2) |
57.3% |
-4.3 p.p. |
-4.1 p.p. |
59.7% |
-1.6 p.p. |
||
| Fuel Gallons Consumed (Millions) |
63.9 |
9.4% |
0.5% |
247.5 |
12.8% |
||
| Avg. Price Per Fuel Gallon (US$ Dollars) |
3.12 |
-6.5% |
0.1% |
3.16 |
-4.3% |
||
| Average Length of Haul (Miles) |
1,850 |
4.4% |
-2.4% |
1,868 |
6.7% |
||
| Average Stage Length (Miles) |
1,151 |
5.7% |
-0.7% |
1,140 |
6.0% |
||
| Departures |
30,266 |
2.4% |
0.5% |
119,177 |
5.9% |
||
| Block Hours |
89,783 |
8.0% |
0.2% |
348,882 |
11.3% |
||
| Average Aircraft Utilization (Hours) |
10.9 |
-0.9% |
-2.7% |
11.1 |
1.2% |
||
| Operating Revenues (US$ mm) |
697.8 |
16.3% |
3.0% |
2,608.3 |
16.0% |
||
| Operating Income (US$ mm) |
130.7 |
25.3% |
-11.4% |
518.5 |
28.8% |
||
| Adjusted Operating Income (US$ mm) (1) |
161.8 |
55.2% |
9.7% |
549.6 |
36.5% |
||
| Operating Margin |
18.7% |
1.3 p.p. |
-3.0 p.p. |
19.9% |
2.0 p.p. |
||
| Adjusted Operating Margin (1) |
23.2% |
5.8 p.p. |
1.4 p.p. |
21.1% |
3.2 p.p. |
||
| Net Income (US$ mm) |
113.9 |
31.5% |
-9.6% |
428.2 |
31.2% |
||
| Adjusted Net Income (US$ mm) (2) |
142.5 |
59.6% |
22.7% |
468.1 |
39.3% |
||
| EPS - Basic and Diluted (US$) |
2.57 |
31.6% |
-9.5% |
9.64 |
31.1% |
||
| Adjusted EPS - Basic and Diluted (US$) (2) |
3.21 |
59.7% |
22.7% |
10.54 |
39.2% |
||
| # of Shares - Basic and Diluted ('000) |
44,379 |
-0.1% |
0.0% |
44,424 |
0.1% |
||
|
(1) Adjusted CASM, Adjusted Operating Income, Adjusted Operating Margin for 4Q13 and 2013 exclude non-cash impairment charge on Intangible Assets booked in 2005 related to the acquisition of AeroRepublica (now Copa Colombia).
|
|||||||
Note: Attached to this press release is a reconciliation of non-IFRS financial measures to the comparable IFRS measures.
FULL 4Q13 EARNINGS RELEASE AVAILABLE FOR DOWNLOAD AT: http://investor.shareholder.com/copa/results.cfm
4Q13 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST
| Date: |
February 13, 2014 |
||
| Time: |
10:00 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 |
||
| 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.
CONTACT: Copa Holdings S.A.
Investor Relations:
Ph: (507) 304-2431
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.
| Copa Holdings, S.A. |
|||||||||||||||
| Income Statement - IFRS |
|||||||||||||||
| (US$ Thousands) |
|||||||||||||||
| Unaudited |
Unaudited |
% |
Unaudited |
% |
Unaudited |
Audited |
% |
||||||||
| 4Q13 |
4Q12 |
Change |
3Q13 |
Change |
2013 |
2012 |
Change |
||||||||
| Operating Revenues |
|||||||||||||||
| Passenger Revenue |
674,209 |
575,731 |
17.1% |
655,991 |
2.8% |
2,519,649 |
2,163,136 |
16.5% |
|||||||
| Cargo, mail and other |
23,562 |
24,109 |
-2.3% |
21,288 |
10.7% |
88,682 |
86,252 |
2.8% |
|||||||
| Total Operating Revenue |
697,771 |
599,839 |
16.3% |
677,279 |
3.0% |
2,608,331 |
2,249,388 |
16.0% |
|||||||
| Operating Expenses |
|||||||||||||||
| Aircraft fuel |
199,388 |
194,754 |
2.4% |
198,163 |
0.6% |
783,092 |
725,763 |
7.9% |
|||||||
| Salaries and benefits |
73,382 |
65,782 |
11.6% |
69,941 |
4.9% |
276,156 |
247,405 |
11.6% |
|||||||
| Passenger servicing |
64,986 |
59,788 |
8.7% |
64,913 |
0.1% |
250,604 |
217,137 |
15.4% |
|||||||
| Commissions |
27,428 |
22,382 |
22.5% |
27,717 |
-1.0% |
103,685 |
89,378 |
16.0% |
|||||||
| Reservations and sales |
26,013 |
22,112 |
17.6% |
27,588 |
-5.7% |
99,812 |
84,992 |
17.4% |
|||||||
| Maintenance, material and repairs |
22,866 |
24,311 |
-5.9% |
25,035 |
-8.7% |
92,993 |
92,166 |
0.9% |
|||||||
| Depreciation |
27,082 |
24,446 |
10.8% |
26,576 |
1.9% |
105,331 |
89,217 |
18.1% |
|||||||
| Flight operations |
31,451 |
27,747 |
13.3% |
30,829 |
2.0% |
121,786 |
104,993 |
16.0% |
|||||||
| Aircraft rentals |
24,617 |
19,472 |
26.4% |
23,540 |
4.6% |
90,233 |
72,468 |
24.5% |
|||||||
| Landing fees and other rentals |
12,813 |
12,266 |
4.5% |
12,607 |
1.6% |
50,405 |
46,233 |
9.0% |
|||||||
| Other |
25,907 |
22,510 |
15.1% |
22,878 |
13.2% |
84,589 |
77,101 |
9.7% |
|||||||
| Intangible Impairment |
31,162 |
0 |
n/m |
0 |
n/m |
31,162 |
0 |
n/m |
|||||||
| Total Operating Expense |
567,097 |
495,570 |
14.4% |
529,787 |
7.0% |
2,089,848 |
1,846,852 |
13.2% |
|||||||
| Operating Income |
130,675 |
104,269 |
25.3% |
147,492 |
-11.4% |
518,483 |
402,535 |
28.8% |
|||||||
| Non-operating Income (Expense): |
|||||||||||||||
| Interest expense |
(7,447) |
(8,130) |
-8.4% |
(7,513) |
-0.9% |
(30,180) |
(32,795) |
-8.0% |
|||||||
| Interest income |
3,963 |
3,427 |
15.6% |
3,127 |
26.7% |
12,636 |
11,689 |
8.1% |
|||||||
| Other, net |
(4,081) |
(2,721) |
50.0% |
10,700 |
-138.1% |
(13,192) |
(15,086) |
-12.6% |
|||||||
| Total Non-Operating Income/(Expense) |
(7,565) |
(7,424) |
n/a |
6,314 |
-219.8% |
(30,736) |
(36,192) |
n/a |
|||||||
| Income before Income Taxes |
123,110 |
96,845 |
27.1% |
153,807 |
-20.0% |
487,747 |
366,343 |
33.1% |
|||||||
| Provision for Income |
9,189 |
10,222 |
-10.1% |
27,798 |
-66.9% |
59,546 |
39,867 |
49.4% |
|||||||
| Net Income |
113,921 |
86,623 |
31.5% |
126,008 |
-9.6% |
428,200 |
326,476 |
31.2% |
|||||||
| EPS - Basic and Diluted |
2.57 |
1.95 |
31.6% |
2.84 |
-9.6% |
9.64 |
7.35 |
31.1% |
|||||||
| Shares - Basic and Diluted |
44,379,289 |
44,409,211 |
-0.1% |
44,379,507 |
0.0% |
44,423,845 |
44,400,224 |
0.1% |
|||||||
| Copa Holdings, S.A. |
||||||||||
| Balance Sheet - IFRS |
||||||||||
| (US$ Thousands) |
December 31, |
September 30, |
December 31, |
|||||||
| 2013 |
2013 |
2012 |
||||||||
| (Unaudited) |
(Unaudited) |
(Audited) |
||||||||
| Current Assets: |
||||||||||
| Cash and cash equivalents |
$ 139,240 |
$ 475,181 |
$ 76,094 |
|||||||
| Short-term investments |
930,399 |
499,047 |
575,009 |
|||||||
| Total cash, cash equivalents and short-term investments |
1,069,640 |
974,228 |
651,103 |
|||||||
| Accounts receivable, net of allowance for doubtful accounts |
132,001 |
173,175 |
135,207 |
|||||||
| Accounts receivable from related parties |
2,189 |
2,109 |
1,129 |
|||||||
| Expendable parts and supplies, net of allowance for obsolescence |
56,814 |
56,314 |
50,603 |
|||||||
| Prepaid expenses |
59,160 |
62,163 |
63,120 |
|||||||
| Other current assets |
22,783 |
19,073 |
16,328 |
|||||||
| Total Current Assets |
1,342,586 |
1,287,062 |
917,490 |
|||||||
| Long-term investments |
99,770 |
46,590 |
69,445 |
|||||||
| Property and Equipment: |
||||||||||
| Owned property and equipment: |
||||||||||
| Flight equipment |
2,477,830 |
2,462,278 |
2,405,346 |
|||||||
| Other equipment |
73,487 |
71,570 |
66,330 |
|||||||
| 2,551,317 |
2,533,848 |
2,471,676 |
||||||||
| Less: Accumulated depreciation |
(530,347) |
(505,147) |
(432,589) |
|||||||
| 2,020,970 |
2,028,701 |
2,039,087 |
||||||||
| Purchase deposits for flight equipment |
327,544 |
302,371 |
245,544 |
|||||||
| Total Property and Equipment |
2,348,514 |
2,331,072 |
2,284,631 |
|||||||
| Other Assets: |
||||||||||
| Net pension asset |
11,114 |
10,826 |
10,009 |
|||||||
| Goodwill |
25,305 |
25,466 |
27,575 |
|||||||
| Intangible asset |
28,214 |
57,767 |
59,382 |
|||||||
| Other assets |
96,949 |
110,889 |
110,968 |
|||||||
| Total Other Assets |
161,583 |
204,948 |
207,934 |
|||||||
| Total Assets |
$ 3,952,454 |
$ 3,869,672 |
$ 3,479,500 |
|||||||
| LIABILITIES AND SHAREHOLDER'S EQUITY |
||||||||||
| Current Liabilities: |
||||||||||
| Current maturities of long-term debt |
$ 156,460 |
$ 140,114 |
$ 136,268 |
|||||||
| Accounts payable |
95,046 |
101,128 |
104,975 |
|||||||
| Accounts payable to related parties |
14,460 |
15,380 |
20,255 |
|||||||
| Air traffic liability |
578,439 |
549,721 |
382,807 |
|||||||
| Taxes and interest payable |
113,517 |
121,647 |
85,436 |
|||||||
| Accrued expenses payable |
74,963 |
65,993 |
48,047 |
|||||||
| Other current liabilities |
8,133 |
7,835 |
10,902 |
|||||||
| Total Current Liabilities |
1,041,019 |
1,001,818 |
788,690 |
|||||||
| Non-Current Liabilities: |
||||||||||
| Long-term debt |
913,507 |
960,462 |
1,069,836 |
|||||||
| Post employment benefits liability |
6,223 |
6,309 |
6,340 |
|||||||
| Other long-term liabilities |
51,223 |
49,912 |
43,726 |
|||||||
| Deferred tax liabilities |
38,743 |
32,274 |
34,364 |
|||||||
| Total Non-Current Liabilities |
1,009,696 |
1,048,957 |
1,154,266 |
|||||||
| Total Liabilities |
2,050,715 |
2,050,775 |
1,942,956 |
|||||||
| Shareholders' Equity: |
||||||||||
| Class A - 33,407,876 shares issued and outstanding |
22,626 |
22,626 |
22,591 |
|||||||
| Class B - 10,938,125 shares issued and outstanding |
7,466 |
7,466 |
7,466 |
|||||||
| Additional paid in capital |
47,031 |
45,594 |
40,660 |
|||||||
| Retained earnings |
1,821,243 |
1,739,740 |
1,458,258 |
|||||||
| Accumulated other comprehensive income (loss) |
3,372 |
3,470 |
7,569 |
|||||||
| Total Shareholders' Equity |
1,901,738 |
1,818,896 |
1,536,544 |
|||||||
| Total Liabilities and Shareholders' Equity |
$ 3,952,454 |
$ 3,869,672 |
$ 3,479,500 |
|||||||
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 |
4Q13 |
4Q12 |
3Q13 |
2013 |
2012 |
|||||
| Net income as Reported |
$113,921 |
$86,623 |
$126,008 |
$428,200 |
$326,476 |
|||||
| Special Items (adjustments): |
||||||||||
| Intangible Impairment |
$31,162 |
$0 |
$0 |
$31,162 |
$0 |
|||||
| Unrealized (gain) loss on fuel hedging instruments |
-$2,553 |
$2,673 |
-$9,820 |
-$5,167 |
$9,577 |
|||||
| Venezuela Devaluation |
$0 |
$0 |
$0 |
$13,927 |
$0 |
|||||
| Adjusted Net Income |
$142,530 |
$89,296 |
$116,188 |
$468,123 |
$336,053 |
|||||
| Shares used for Computation (in thousands) |
||||||||||
| Basic and Diluted |
44,379 |
44,409 |
44,380 |
44,424 |
44,400 |
|||||
| Adjusted earnings per share - Basic and Diluted |
3.21 |
2.01 |
2.62 |
10.54 |
7.57 |
|||||
| Reconciliation Operating Costs per ASM |
||||||||||
| Excluding Fuel and Special Items |
4Q13 |
4Q12 |
3Q13 |
2013 |
2012 |
|||||
| Operating Costs per ASM as Reported |
11.6 |
11.1 |
10.9 |
11.0 |
11.1 |
|||||
| Intangible Impairment |
(0.6) |
- |
- |
(0.2) |
- |
|||||
| Aircraft fuel per ASM |
(4.1) |
(4.4) |
(4.1) |
(4.1) |
(4.4) |
|||||
| Adjusted Operating Costs per ASM excluding fuel |
6.9 |
6.8 |
6.8 |
6.7 |
6.8 |
|||||
CPA-G
SOURCE Copa Holdings, S.A.
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