Copa Holdings Reports Net Income of US$118.2 Million and EPS of US$2.66 for the Second Quarter of 2014
Excluding special items, adjusted net income came in at $115.9 million, or EPS of $2.61 per share
PANAMA CITY, Aug. 6, 2014 /PRNewswire/ -- Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the second quarter of 2014 (2Q14). 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 second quarter of 2013 (2Q13).
OPERATING AND FINANCIAL HIGHLIGHTS
- Copa Holdings reported net income of US$118.2 million for 2Q14, or diluted earnings per share (EPS) of US$2.66. Excluding special items, Copa Holdings would have reported an adjusted net income of $115.9 million, or $2.61 per share, a 36.4% increase over adjusted net income of US$85.0 million and US$1.92 per share for 2Q13.
- Operating income for 2Q14 came in at US$131.2 million, a 34.3% increase over operating income of US$97.7 million in 2Q13. Operating margin for the period came in at 19.5%, compared to 16.5% in 2Q13, as a result of higher unit revenues.
- Total revenues increased 13.8% to US$673.6 million. Yield per passenger mile increased 1.6% to 16.6 cents and operating revenue per available seat mile (RASM) increased 3.7% to 13.3 cents. However, adjusting for a 10.9% increase in length of haul, yields increased 6.9% and RASM increased 9.2%.
- For 2Q14, passenger traffic (RPMs) grew 12.7% on a 9.7% capacity expansion. As a result, consolidated load factor came in at 77.3%, or 2.0 percentage points above 2Q13.
- Operating cost per available seat mile (CASM) remained unchanged at 10.7 cents from 2Q13. However, CASM, excluding fuel costs, decreased 0.9% to 6.6 cents.
- Cash, short term and long term investments ended 2Q14 at US$1.15 billion, representing 42% of the last twelve months' revenues. Of this amount, 46% is in Venezuela pending repatriation due to government currency controls.
- During the month of June, Copa Airlines received payment of US$43.3 million from CENCOEX ("Centro Nacional de Comercio Exterior") in Venezuela. The funds corresponded to repatriation requests from January and February 2013 and were honored at an exchange rate of 6.30 bolivars per dollar.
- During the second quarter, Copa Airlines took delivery of two Boeing 737-800 aircraft. As a result, Copa Holdings ended the quarter with a consolidated fleet of 93 aircraft.
- For 2Q14, Copa Holdings reported consolidated on-time performance of 89.5% and a flight-completion factor of 99.8%, maintaining its position among the best in the industry.
SUBSEQUENT EVENTS
- During July 2014, Copa Airlines signed a letter of intent agreeing to lease three new Boeing 737-800 aircraft and take delivery of these aircraft in August, October, and November of 2015.
- Copa Holdings will pay its third quarter dividend of US$0.96 per share on September 15, 2014, on all outstanding Class A and Class B shares, to stockholders of record as of August 29, 2014.
| Consolidated Financial & Operating Highlights |
2Q14 |
2Q13 |
% Change |
1Q14 |
% Change |
| Revenue Passengers Carried ('000) |
1,890 |
1,861 |
1.6% |
2,032 |
-6.9% |
| RPMs (mm) |
3,916 |
3,475 |
12.7% |
3,917 |
0.0% |
| ASMs (mm) |
5,067 |
4,618 |
9.7% |
5,015 |
1.0% |
| Load Factor |
77.3% |
75.3% |
2.0 p.p. |
78.1% |
-0.8 p.p. |
| Yield |
16.6 |
16.4 |
1.6% |
17.7 |
-5.9% |
| PRASM (US$ Cents) |
12.8 |
12.3 |
4.3% |
13.8 |
-6.9% |
| RASM (US$ Cents) |
13.3 |
12.8 |
3.7% |
14.2 |
-6.6% |
| CASM (US$ Cents) |
10.7 |
10.7 |
0.0% |
10.7 |
0.0% |
| CASM Excl. Fuel (US$ Cents) |
6.6 |
6.7 |
-0.9% |
6.6 |
1.3% |
| Breakeven Load Factor (1) |
60.8% |
61.6% |
-0.8 p.p. |
57.6% |
3.2 p.p. |
| Fuel Gallons Consumed (Millions) |
65.9 |
60.0 |
9.8% |
65.3 |
0.9% |
| Avg. Price Per Fuel Gallon (US$ Dollars) |
3.13 |
3.08 |
1.5% |
3.19 |
-1.9% |
| Average Length of Haul (Miles) |
2,072 |
1,868 |
10.9% |
1,928 |
7.5% |
| Average Stage Length (Miles) |
1,210 |
1,126 |
7.5% |
1,173 |
3.1% |
| Departures |
29,726 |
29,357 |
1.3% |
30,546 |
-2.7% |
| Block Hours |
92,115 |
84,985 |
8.4% |
91,569 |
0.6% |
| Average Aircraft Utilization (Hours) |
11.0 |
10.9 |
0.7% |
11.3 |
-3.0% |
| Operating Revenues (US$ mm) |
673.6 |
592.0 |
13.8% |
713.6 |
-5.6% |
| Operating Income (US$ mm) |
131.2 |
97.7 |
34.3% |
177.0 |
-25.9% |
| Operating Margin |
19.5% |
16.5% |
3.0 p.p. |
24.8% |
-5.3 p.p. |
| Net Income (US$ mm) |
118.2 |
74.4 |
58.7% |
151.4 |
-21.9% |
| Adjusted Net Income (US$ mm) (1) |
115.9 |
85.0 |
36.4% |
153.6 |
-24.5% |
| EPS - Basic and Diluted (US$) |
2.66 |
1.68 |
58.7% |
3.41 |
-21.9% |
| Adjusted EPS - Basic and Diluted (US$) (1) |
2.61 |
1.92 |
36.3% |
3.46 |
-24.5% |
| # of Shares - Basic and Diluted ('000) |
44,409 |
44,387 |
0.0% |
44,403 |
0.0% |
| (1)Breakeven Load Factor, Adjusted Net Income and Adjusted EPS for 2Q14, 2Q13, and 1Q14 exclude non-cash charges/gains associated with the mark-to-market of fuel hedges. Additionally, 2Q14 and 1Q14 exclude charges/gains related to the Venezuelan currency. |
|||||
Note: Attached to this press release is a reconciliation of non-IFRS financial measures to the comparable IFRS measures.
FULL 2Q14 EARNINGS RELEASE AVAILABLE FOR DOWNLOAD AT: http://investor.shareholder.com/copa/results.cfm
2Q14 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST
| Date: |
August 7, 2014 |
| 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 |
| 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 67 destinations in 30 countries in North, Central and South America and the Caribbean with one of the youngest and most modern fleets in the industry, consisting of 95 aircraft: 69 Boeing 737NG aircraft and 26 EMBRAER-190s. For more information visit: www.copaair.com.
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.
CPA-G
| Copa Holdings, S.A. |
|||||||||
| Income Statement - IFRS |
|||||||||
| (US$ Thousands) |
|||||||||
| Unaudited |
Unaudited |
% |
Unaudited |
% |
|||||
| 2Q14 |
2Q13 |
Change |
1Q14 |
Change |
|||||
| Operating Revenues |
|||||||||
| Passenger Revenue |
651,081 |
568,960 |
14.4% |
691,977 |
-5.9% |
||||
| Cargo, mail and other |
22,480 |
23,038 |
-2.4% |
21,629 |
3.9% |
||||
| Total Operating Revenue |
673,560 |
591,998 |
13.8% |
713,605 |
-5.6% |
||||
| Operating Expenses |
|||||||||
| Aircraft fuel |
205,942 |
184,767 |
11.5% |
208,014 |
-1.0% |
||||
| Salaries and benefits |
69,584 |
66,105 |
5.3% |
73,976 |
-5.9% |
||||
| Passenger servicing |
65,533 |
60,389 |
8.5% |
64,118 |
2.2% |
||||
| Commissions |
24,467 |
24,279 |
0.8% |
26,132 |
-6.4% |
||||
| Reservations and sales |
23,978 |
24,763 |
-3.2% |
23,853 |
0.5% |
||||
| Maintenance, material and repairs |
29,301 |
22,807 |
28.5% |
24,746 |
18.4% |
||||
| Depreciation |
27,744 |
26,866 |
3.3% |
27,821 |
-0.3% |
||||
| Flight operations |
32,547 |
30,028 |
8.4% |
31,134 |
4.5% |
||||
| Aircraft rentals |
28,534 |
22,124 |
29.0% |
25,315 |
12.7% |
||||
| Landing fees and other rentals |
13,250 |
12,789 |
3.6% |
13,253 |
0.0% |
||||
| Other |
21,490 |
19,393 |
10.8% |
18,246 |
17.8% |
||||
| Total Operating Expense |
542,369 |
494,309 |
9.7% |
536,607 |
1.1% |
||||
| Operating Income |
131,192 |
97,689 |
34.3% |
176,999 |
-25.9% |
||||
| Non-operating Income (Expense): |
|||||||||
| Interest expense |
(6,876) |
(7,560) |
-9.1% |
(7,094) |
-3.1% |
||||
| Interest income |
3,586 |
2,841 |
26.2% |
3,736 |
-4.0% |
||||
| Other, net |
4,107 |
(10,616) |
n/a |
67 |
n/a |
||||
| Total Non-Operating Income/(Expense) |
817 |
(15,336) |
n/a |
(3,291) |
n/a |
||||
| Income before Income Taxes |
132,008 |
82,354 |
60.3% |
173,707 |
-24.0% |
||||
| Provision for Income Taxes |
13,836 |
7,912 |
74.9% |
22,350 |
-38.1% |
||||
| Net Income |
118,172 |
74,441 |
58.7% |
151,357 |
-21.9% |
||||
| EPS - Basic and Diluted |
2.66 |
1.68 |
58.7% |
3.41 |
-21.9% |
||||
| Shares - Basic and Diluted |
44,408,515 |
44,387,279 |
0.0% |
44,402,832 |
0.0% |
||||
| Copa Holdings, S.A. |
||||||
| Balance Sheet - IFRS |
||||||
| (US$ Thousands) |
June 30, |
December 31, |
||||
| 2014 |
2013 |
|||||
| (Unaudited) |
(Audited) |
|||||
| ASSETS |
||||||
| Current Assets: |
||||||
| Cash and cash equivalents |
$ 172,103 |
$ 139,108 |
||||
| Short-term investments |
723,808 |
992,579 |
||||
| Total cash, cash equivalents and short-term investments |
895,911 |
1,131,687 |
||||
| Accounts receivable, net of allowance for doubtful accounts |
119,197 |
132,867 |
||||
| Accounts receivable from related parties |
2,195 |
2,189 |
||||
| Expendable parts and supplies, net of allowance for obsolescence |
63,806 |
56,814 |
||||
| Prepaid expenses |
59,682 |
59,175 |
||||
| Other current assets |
23,685 |
22,783 |
||||
| Total Current Assets |
1,164,476 |
1,405,515 |
||||
| Long-term investments |
253,876 |
37,590 |
||||
| Property and Equipment: |
||||||
| Owned property and equipment: |
||||||
| Flight equipment |
2,554,756 |
2,477,830 |
||||
| Other equipment |
84,529 |
73,487 |
||||
| 2,639,285 |
2,551,317 |
|||||
| Less: Accumulated depreciation |
(583,042) |
(530,347) |
||||
| 2,056,243 |
2,020,970 |
|||||
| Purchase deposits for flight equipment |
370,200 |
327,544 |
||||
| Total Property and Equipment |
2,426,443 |
2,348,514 |
||||
| Other Assets: |
||||||
| Net pension asset |
11,936 |
11,114 |
||||
| Goodwill |
25,919 |
25,305 |
||||
| Intangible asset |
30,968 |
28,214 |
||||
| Other assets |
98,193 |
96,509 |
||||
| Total Other Assets |
167,016 |
161,143 |
||||
| Total Assets |
$ 4,011,811 |
$ 3,952,762 |
||||
| LIABILITIES AND SHAREHOLDER'S EQUITY |
||||||
| Current Liabilities: |
||||||
| Current maturities of long-term debt |
$ 147,649 |
$ 156,329 |
||||
| Accounts payable |
113,697 |
95,046 |
||||
| Accounts payable to related parties |
16,235 |
14,483 |
||||
| Air traffic liability |
463,283 |
578,439 |
||||
| Taxes and interest payable |
96,211 |
113,541 |
||||
| Accrued expenses payable |
72,930 |
75,975 |
||||
| Other current liabilities |
8,484 |
8,133 |
||||
| Total Current Liabilities |
918,489 |
1,041,946 |
||||
| Non-Current Liabilities: |
||||||
| Long-term debt |
895,396 |
913,507 |
||||
| Post employment benefits liability |
6,176 |
6,223 |
||||
| Other long-term liabilities |
65,837 |
51,223 |
||||
| Deferred tax liabilities |
35,858 |
37,959 |
||||
| Total Non-Current Liabilities |
1,003,267 |
1,008,912 |
||||
| Total Liabilities |
1,921,756 |
2,050,858 |
||||
| Shareholders' Equity: |
||||||
| Class A - 33,433,789 shares issued and outstanding |
22,676 |
22,626 |
||||
| Class B - 10,938,125 shares issued and outstanding |
7,466 |
7,466 |
||||
| Additional paid in capital |
49,671 |
47,031 |
||||
| Retained earnings |
2,004,859 |
1,820,580 |
||||
| Accumulated other comprehensive income (loss) |
5,383 |
4,200 |
||||
| Total Shareholders' Equity |
2,090,054 |
1,901,903 |
||||
| Total Liabilities and Shareholders' Equity |
$ 4,011,811 |
$ 3,952,762 |
||||
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 |
2Q14 |
2Q13 |
1Q13 |
|||
| Net income as Reported |
$118,172 |
$74,441 |
$151,357 |
|||
| Special Items (adjustments): |
||||||
| Unrealized (gain) loss on fuel hedging instruments |
(4,105) |
10,582 |
3,373 |
|||
| Loss due to devaluation of Venezuelan Bolivar |
1,874 |
0 |
(1,178) |
|||
| Adjusted Net Income |
$115,941 |
$85,023 |
$153,553 |
|||
| Shares used for Computation (in thousands) |
||||||
| Basic and Diluted |
44,409 |
44,387 |
44,403 |
|||
| Adjusted earnings per share - Basic and Diluted |
2.61 |
1.92 |
3.46 |
|||
| Reconciliation Operating Costs per ASM |
||||||
| Excluding Fuel and Special Items |
2Q14 |
2Q13 |
1Q14 |
|||
| Operating Costs per ASM as Reported |
10.7 |
10.7 |
10.7 |
|||
| Aircraft fuel per ASM |
(4.1) |
(4.0) |
(4.1) |
|||
| Operating Costs per ASM excluding fuel |
6.6 |
6.7 |
6.6 |
|||
SOURCE Copa Holdings, S.A.
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