Copa Holdings Reports Net Profit of $74.3 million and EPS of $1.75 for the First Quarter of 2020
PANAMA CITY, May 6, 2020 /PRNewswire/ -- Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the first quarter of 2020 (1Q20). 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 first quarter of 2019 (1Q19).
OPERATING AND FINANCIAL HIGHLIGHTS
- Due to air travel restrictions implemented in response to the Covid-19 outbreak, the Company was forced to temporarily suspend all commercial flights on March 22nd, 2020. The Company currently expects to re-start a scaled-down operation on June 1st, 2020, although this date could be delayed as a result of further travel restrictions.
- For 1Q20, Copa Holdings reported net profit of US$74.3 million or earnings per share (EPS) of US$1.75, as compared to net profit of US$89.4 million or earnings per share of US$2.11 in 1Q19.
- Operating profit for 1Q20 came in at US$98.7 million, representing a 12.6% decrease from operating profit of US$112.9 million in 1Q19. Operating margin for 1Q20 came in at 16.6%, compared to an operating margin of 16.8% in 1Q19.
- For 1Q20, consolidated passenger traffic decreased 16.3% on a 14.4% capacity reduction. As a result, consolidated load factor for the quarter decreased 1.9 percentage points to 81.5%.
- Total revenues for 1Q20 decreased 11.4% to US$595.5 million. Yield per passenger mile increased 5.8% to 12.8 cents and RASM came in at 10.8 cents, or 5.8% higher than 1Q19.
- Operating cost per available seat mile (CASM) increased 3.8%, from 8.7 cents in 1Q19 to 9.0 cents in 1Q20. CASM excluding fuel costs increased 8.0% from 6.1 cents in 1Q19 to 6.6 cents in 1Q20, mainly as a result of flight cancellations in March due to the Covid-19 outbreak and, later in the month, the unexpected grounding of the Company´s fleet, resulting in a significant year over year capacity reduction.
- During 1Q20 the Company drew US$145 million from its available short-term lines of credit.
- Cash, short-term and long-term investments ended the quarter at US$ 1.13 billion, representing approximately 43% of the last twelve months' revenues.
- Copa Holdings ended the quarter with a consolidated fleet of 102 aircraft – 6 Boeing 737MAX9s, 68 Boeing 737-800s, 14 Boeing 737-700s, and 14 Embraer-190s.
Subsequent Events
- Given the uncertainty related to the Covid-19 crisis, including the effect on future air travel demand, on April 26, 2020 our Board of Directors postponed dividend payments for the remaining quarters of 2020.
- Throughout the month of April, the Company obtained unsecured, committed credit facilities with three local banks, for an aggregate amount of US$150 million dollars. These facilities remain unutilized.
- On April 30, 2020, the Company further bolstered its cash position by successfully closing a US$350 million convertible senior notes offering, maturing in 2025.
Consolidated Financial |
1Q20 |
1Q19 |
Variance |
4Q19 |
Variance |
Revenue Passengers Carried ('000) |
2,118 |
2,588 |
-18.2% |
2,633 |
-19.5% |
RPMs (mm) |
4,473 |
5,345 |
-16.3% |
5,244 |
-14.7% |
ASMs (mm) |
5,491 |
6,415 |
-14.4% |
6,149 |
-10.7% |
Load Factor |
81.5% |
83.3% |
-1.9 p.p. |
85.3% |
-3.8 p.p. |
Yield |
12.8 |
12.1 |
5.8% |
12.5 |
2.4% |
PRASM (US$ Cents) |
10.5 |
10.1 |
3.5% |
10.7 |
-2.2% |
RASM (US$ Cents) |
10.8 |
10.5 |
3.5% |
11.1 |
-2.2% |
CASM (US$ Cents) |
9.0 |
8.7 |
3.8% |
10.8 |
-16.2% |
Adjusted CASM (US$ Cents) (1) |
9.0 |
8.7 |
3.8% |
9.3 |
-3.2% |
CASM Excl. Fuel (US$ Cents) |
6.6 |
6.1 |
8.0% |
8.0 |
-18.2% |
Adjusted CASM Excl. Fuel (US$ cents) (1) |
6.6 |
6.1 |
8.0% |
6.6 |
-0.1% |
Fuel Gallons Consumed (Millions) |
70.0 |
81.2 |
-13.8% |
78.9 |
-11.3% |
Avg. Price Per Fuel Gallon (US$ Dollars) |
1.95 |
2.09 |
-6.7% |
2.16 |
-9.9% |
Average Length of Haul (Miles) |
2,112 |
2,065 |
2.3% |
1,992 |
6.0% |
Average Stage Length (Miles) |
1,308 |
1,299 |
0.7% |
1,279 |
2.2% |
Departures |
28,286 |
33,329 |
-15.1% |
32,441 |
-12.8% |
Block Hours |
93,568 |
110,089 |
-15.0% |
105,620 |
-11.4% |
Average Aircraft Utilization (Hours) |
10.1 |
11.6 |
-13.5% |
11.3 |
-10.4% |
Operating Revenues (US$ mm) |
595.5 |
672.2 |
-11.4% |
681.9 |
-12.7% |
Operating Profit (US$ mm) |
98.7 |
112.9 |
-12.6% |
17.8 |
n/m |
Adjusted Operating Profit (US$ mm) (1) |
98.7 |
112.9 |
-12.6% |
107.1 |
-7.9% |
Operating Margin |
16.6% |
16.8% |
-0.2 p.p. |
2.6% |
14.0 p.p. |
Adjusted Operating Margin (1) |
16.6% |
16.8% |
-0.2 p.p. |
15.7% |
0.9 p.p. |
Net Profit (US$ mm) |
74.3 |
89.4 |
-16.9% |
2.7 |
n/m |
Adjusted Net Profit (US$ mm) (1) |
74.3 |
89.4 |
-16.9% |
92.1 |
-19.3% |
EPS - Basic and Diluted (US$) |
1.75 |
2.11 |
-17.0% |
0.06 |
n/m |
Adjusted EPS - Basic and Diluted (US$) (1) |
1.75 |
2.11 |
-17.0% |
2.17 |
-19.4% |
# of Shares - Basic and Diluted ('000) |
42,501 |
42,478 |
0.1% |
42,487 |
0.0% |
(1)Adjusted CASM, Adjusted CASM Excl. Fuel, Adjusted Operating Profit, Adjusted Net Profit, Adjusted Operating Margin and Adjusted EPS for 4Q19, exclude non-cash charges associated with the Embraer 190 Fleet impairment.
Note: Attached to this press release is a reconciliation of non-IFRS financial measures to the comparable IFRS measures.
FULL 1Q20 EARNINGS RELEASE AVAILABLE FOR DOWNLOAD AT:
https://copa.gcs-web.com/financial-information/quarterly-results
1Q20 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST
Date: |
May 7, 2020 |
||
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) |
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Webcast: |
|||
Speakers: |
Pedro Heilbron, Chief Executive Officer |
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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 80 destinations in 33 countries in North, Central and South America and the Caribbean with a modern fleet consisting of 102 aircraft: 6 Boeing 737MAX9s, 82 Boeing 737NG aircraft and 14 EMBRAER-190s. 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 |
Unaudited |
% |
Unaudited |
% |
||||||
1Q20 |
1Q19 |
Change |
4Q19 |
Change |
||||||
Operating Revenues |
||||||||||
Passenger revenue |
574,650 |
648,790 |
-11.4% |
657,940 |
-12.7% |
|||||
Cargo and mail revenue |
13,017 |
15,316 |
-15.0% |
16,033 |
-18.8% |
|||||
Other operating revenue |
7,785 |
8,063 |
-3.4% |
7,955 |
-2.1% |
|||||
Total Operating Revenue |
595,453 |
672,169 |
-11.4% |
681,927 |
-12.7% |
|||||
Operating Expenses |
||||||||||
Fuel |
136,954 |
170,163 |
-19.5% |
171,314 |
-20.1% |
|||||
Wages, salaries, benefits and other employees' expenses |
110,289 |
113,662 |
-3.0% |
115,036 |
-4.1% |
|||||
Passenger servicing |
21,890 |
25,571 |
-14.4% |
24,798 |
-11.7% |
|||||
Airport facilities and handling charges |
40,365 |
45,362 |
-11.0% |
44,877 |
-10.1% |
|||||
Sales and distribution |
42,011 |
53,133 |
-20.9% |
53,222 |
-21.1% |
|||||
Maintenance, materials and repairs |
27,144 |
28,047 |
-3.2% |
37,648 |
-27.9% |
|||||
Depreciation and amortization |
66,375 |
68,187 |
-2.7% |
70,469 |
-5.8% |
|||||
Flight operations |
23,731 |
25,875 |
-8.3% |
24,908 |
-4.7% |
|||||
Other operating and administrative expenses |
28,008 |
29,297 |
-4.4% |
32,506 |
-13.8% |
|||||
Fleet Impairment |
89,344 |
n/m |
||||||||
Total Operating Expense |
496,766 |
559,296 |
-11.2% |
664,123 |
-25.2% |
|||||
Operating Profit |
98,687 |
112,873 |
-12.6% |
17,804 |
n/m |
|||||
Non-operating Income (Expense): |
||||||||||
Finance cost |
(11,085) |
(14,010) |
-20.9% |
(17,154) |
-35.4% |
|||||
Finance income |
6,320 |
5,954 |
6.2% |
6,289 |
0.5% |
|||||
Gain (loss) on foreign currency fluctuations |
(10,950) |
(5,960) |
83.7% |
2,406 |
n/m |
|||||
Other non-operating income (expense) |
(11) |
(825) |
-98.6% |
(989) |
-98.9% |
|||||
Total Non-Operating Income/(Expense) |
(15,726) |
(14,841) |
n/m |
(9,448) |
66.5% |
|||||
Profit before taxes |
82,961 |
98,032 |
-15.4% |
8,356 |
n/m |
|||||
Income tax expense |
8,687 |
8,600 |
1.0% |
5,629 |
54.3% |
|||||
Net Profit |
74,273 |
89,431 |
-16.9% |
2,728 |
n/m |
|||||
EPS - Basic and Diluted |
1.75 |
2.11 |
-17.0% |
0.06 |
n/m |
|||||
Shares - Basic and Diluted |
42,501,338 |
42,477,761 |
0.1% |
42,486,717 |
0.0% |
Copa Holdings, S. A. and subsidiaries |
||
Consolidated statement of financial position |
||
(US$ Thousands) |
March |
December |
2020 |
2019 |
|
(Unaudited) |
||
ASSETS |
||
Current Assets |
||
Cash and cash equivalents |
339,926 |
158,733 |
Short-term investments |
672,721 |
692,403 |
Total cash, cash equivalents and short-term investments |
1,012,646 |
851,136 |
Accounts receivable, net |
49,708 |
129,634 |
Accounts receivable from related parties |
1,488 |
147 |
Expendable parts and supplies, net |
74,454 |
69,100 |
Prepaid expenses |
41,382 |
49,034 |
Prepaid income tax |
1,286 |
1,181 |
Other current assets |
14,056 |
14,206 |
182,374 |
263,301 |
|
Assets held for sale |
119,299 |
120,006 |
TOTAL CURRENT ASSETS |
1,314,320 |
1,234,442 |
Long-term investments |
114,277 |
134,347 |
Long-term accounts receivable |
2,364 |
2,139 |
Long-term prepaid expenses |
15,018 |
17,743 |
Property and equipment, net |
2,522,205 |
2,532,402 |
Right of use assets |
284,552 |
290,843 |
Intangible, net |
107,047 |
108,116 |
Net pension asset |
665 |
249 |
Deferred tax assets |
17,050 |
19,216 |
Other Non-Current Assets |
16,027 |
17,881 |
TOTAL NON-CURRENT ASSETS |
3,079,207 |
3,122,935 |
TOTAL ASSETS |
4,393,526 |
4,357,377 |
Current maturities of long-term debt |
261,219 |
117,238 |
Current portion of lease liability |
97,908 |
97,732 |
Accounts payable |
126,941 |
119,332 |
Accounts payable to related parties |
2,574 |
14,086 |
Air traffic liability |
411,912 |
497,374 |
Frequent flyer deferred revenue |
84,165 |
80,325 |
Taxes and interest payable |
33,061 |
51,611 |
Employee benefits obligations |
36,121 |
55,373 |
Income tax payable |
13,530 |
9,683 |
Other Current Liabilities |
95 |
83 |
TOTAL CURRENT LIABILITIES |
1,067,526 |
1,042,836 |
Long-term debt |
907,960 |
938,182 |
Lease Liability |
199,534 |
206,832 |
Other long - term liabilities |
197,469 |
191,221 |
Deferred tax Liabilities |
44,379 |
43,397 |
TOTAL NON-CURRENT LIABILITIES |
1,349,343 |
1,379,633 |
TOTAL LIABILITIES |
2,416,869 |
2,422,469 |
EQUITY |
||
Issued Capital |
||
Class A -33,860,663 issued and 31,399,270 outstanding |
21,184 |
21,142 |
Class B common stock - 10,938,125 |
7,466 |
7,466 |
Additional Paid-In Capital |
87,540 |
86,135 |
Treasury Stock |
(136,388) |
(136,388) |
Retained Earnings |
1,931,214 |
1,718,179 |
Net profit |
74,273 |
247,002 |
Other comprehensive loss |
(8,632) |
(8,628) |
TOTAL EQUITY |
1,976,658 |
1,934,908 |
TOTAL EQUITY LIABILITIES |
4,393,526 |
4,357,377 |
Copa Holdings, S. A. and subsidiaries |
||||||||||||||
Consolidated Statement of Cash Flows |
||||||||||||||
For the three months ended March 31, |
||||||||||||||
(In US$ thousands) |
||||||||||||||
2020 |
2019 |
2018 |
||||||||||||
(Unaudited) |
(Unaudited) |
(Unaudited) |
||||||||||||
Cash flow from operating activities |
106,340 |
144,061 |
171,810 |
|||||||||||
Cash flow from investing activities |
19,795 |
(3,591) |
(74,198) |
|||||||||||
Cash flow from financing activities |
55,058 |
(84,361) |
(139,820) |
|||||||||||
Net increase (decrease) in cash and cash equivalents |
181,193 |
56,109 |
(42,208) |
|||||||||||
Cash and cash equivalents at January 1 |
158,732 |
156,158 |
238,792 |
|||||||||||
Cash and cash equivalents at March 31 |
$ 339,925 |
$ 212,267 |
$ 196,584 |
|||||||||||
Short-term investments |
672,721 |
556,127 |
650,110 |
|||||||||||
Long-term investments |
114,277 |
128,992 |
155,313 |
|||||||||||
Total cash and cash equivalents and investments at March 31 |
$ 1,126,923 |
$ 897,386 |
$ 1,002,007 |
|||||||||||
Copa Holdings, S.A.
NON-IFRS FINANCIAL MEASURE RECONCILIATION
This press release includes the following non IFRS financial measures: Adjusted Operating CASM Excluding Fuel, Adjusted Operating Profit, Adjusted Net Profit, 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 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 |
||||||
Adjusted Net Profit and Adjusted EPS |
1Q20 |
1Q19 |
4Q19 |
|||
Operating Profit as Reported |
$ 98,687 |
$ 112,873 |
$ 17,804 |
|||
Special Items (adjustments): |
||||||
Fleet Impairment |
$ 89,344 |
|||||
Adjusted Operating Profit |
$ 98,687 |
$ 112,873 |
$ 107,148 |
|||
Net profit as Reported |
$ 74,273 |
$ 89,431 |
$ 2,728 |
|||
Special Items (adjustments): |
||||||
Fleet Impairment |
$ 89,344 |
|||||
Adjusted Net Profit |
$ 74,273 |
$ 89,431 |
$ 92,071 |
|||
Shares used for Computation (in thousands) |
||||||
Basic and Diluted |
42,501 |
42,478 |
42,487 |
|||
Adjusted earnings per share - Basic and Diluted |
$ 1.75 |
$ 2.11 |
$ 2.17 |
|||
Reconciliation of Adjusted Operating Costs per ASM |
||||||
Excluding Fuel (Adjusted CASM Excl. Fuel) |
1Q20 |
1Q19 |
4Q19 |
|||
Operating Costs per ASM as Reported (in US$ Cents) |
9.0 |
8.7 |
10.8 |
|||
Fleet Impairment per ASM (in US$ Cents) |
(1.5) |
|||||
Aircraft fuel per ASM (in US$ Cents) |
(2.5) |
(2.7) |
(2.8) |
|||
Adjusted Operating Costs per ASM excluding fuel (in US$ Cents) |
6.6 |
6.1 |
6.6 |
|||
SOURCE Copa Holdings, S.A.
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