CPA
$46.69
Copa Holdings S.A.
$2.83
6.45%
Earnings Details
1st Quarter March 2020
Wednesday, May 06, 2020 4:30:00 PM
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Summary

Copa Holdings S.A. (CPA) Recent Earnings

Copa Holdings S.A. (CPA) reported 1st Quarter March 2020 earnings of $1.75 per share on revenue of $595.5 million. The consensus earnings estimate was $1.56 per share on revenue of $604.2 million. Revenue fell 11.4% compared to the same quarter a year ago.

Copa Holdings SA is a provider of airline passenger and cargo service through its two operating subsidiaries, Copa Airlines and Copa Colombia.

Results
Reported Earnings
$1.75
Earnings Whisper
-
Consensus Estimate
$1.56
Reported Revenue
$595.5 Mil
Revenue Estimate
$604.2 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

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
& Operating Highlights

1Q20

1Q19

Variance
vs. 1Q19

4Q19

Variance
vs. 4Q19

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)



Webcast:

https://copa.gcs-web.com/events-and-presentations



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 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








  

Cision View original content:http://www.prnewswire.com/news-releases/copa-holdings-reports-net-profit-of-74-3-million-and-eps-of-1-75-for-the-first-quarter-of-2020--301054285.html

SOURCE Copa Holdings, S.A.