CPA
$92.70
Copa Holdings S.A.
$.26
.28%
Earnings Details
3rd Quarter September 2016
Tuesday, November 08, 2016 4:30:00 PM
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Summary

Copa Holdings S.A. (CPA) Recent Earnings

Copa Holdings S.A. (CPA) reported 3rd Quarter September 2016 earnings of $1.30 per share on revenue of $569.0 million. The consensus earnings estimate was $1.28 per share. Revenue grew 4.0% on a year-over-year basis.

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
$1.30
Earnings Whisper
-
Consensus Estimate
$1.28
Reported Revenue
$569.0 Mil
Revenue Estimate
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Copa Holdings Reports Financial Results for the Third Quarter of 2016

Copa Holdings, S.A. (CPA), today announced financial results for the third quarter of 2016 (3Q16). 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 third quarter of 2015 (3Q15).

OPERATING AND FINANCIAL HIGHLIGHTS

Copa Holdings reported net income of US$74.0 million for 3Q16, or diluted earnings per share (EPS) of US$1.75.

Excluding special items, Copa Holdings would have reported an adjusted net income of $55.3 million, or $1.30 per share, a 47.8% increase from adjusted net income of US$37.4 million and US$0.85 per share for 3Q15.

Operating income for 3Q16 came in at US$77.2 million, a 52.7% increase from operating income of US$50.6 million in 3Q15. Operating margin for the period came in at 13.6% or 4.3 percentage points higher than 3Q15, as a result of stronger unit revenues and lower unit costs.

Operating results for the quarter were affected by realized fuel hedge losses of US$22.2 million, compared to US$24.1 million in 3Q15. Excluding these realized fuel hedge losses, operating margin for the quarter would have been 17.5% for 3Q16, and 13.6% for 3Q15.

Total revenues increased 4.0% year over year to US$569 million, as higher load factors offset a 7.6% reduction in yield per passenger mile. As a result, operating revenue per available seat mile (RASM) increased 1.8% to 10.3 cents when compared to 3Q2015.

For 3Q16, passenger traffic (RPMs) grew 12.7% year over year on a 2.0% capacity expansion. As a result, consolidated load factor came in at 84.2%, or 8.0 percentage points above 3Q15.

Operating cost per available seat mile (CASM) declined 2.9% year over year to 8.9 cents. CASM, excluding fuel, decreased 0.9% year over year to 6.4 cents.

Cash, short term and long term investments ended 3Q16 at US$773.4 million, representing 36% of the last twelve months’ revenues.

During the quarter, Copa Airlines returned two leased EMB-190s. Copa Holdings ended the quarter with a consolidated fleet of 99 aircraft.

For 3Q16, Copa Holdings reported consolidated on-time performance of 90.1% and a flight-completion factor of 99.8%, maintaining its position among the best in the industry.

SUBSEQUENT EVENTS

On Oct 20, 2016 Copa Holdings launched Wingo, a low cost/low price product offering designed for passengers looking for a simple, no-frills travel option within Central, South America and the Caribbean. Wingo will begin operations on December 1, 2016. For more information, please visit www.wingo.com

Copa Holdings will pay its fourth quarter dividend of US$0.51 per share on December 15, 2016, on all outstanding Class A and Class B shares, to stockholders of record as of November 30, 2016.

Consolidated Financial &
3Q16
3Q15
% Change
2Q16
% Change
Operating Highlights
Revenue Passengers Carried (’000)
2,231
1,987
12.3%
2,020
10.5%
RPMs (mm)
4,637
4,116
12.7%
4,178
11.0%
ASMs (mm)
5,506
5,397
2.0%
5,335
3.2%
Load Factor
84.2%
76.3%
8.0 p.p.
78.3%
5.9 p.p.
Yield
11.8
12.7
-7.6%
11.3
3.8%
PRASM (US$ Cents)
9.9
9.7
2.1%
8.9
11.7%
RASM (US$ Cents)
10.3
10.1
1.8%
9.3
11.4%
CASM (US$ Cents)
8.9
9.2
-2.9%
8.6
3.5%
CASM Excl. Fuel (US$ Cents)
6.4
6.4
-0.9%
6.3
1.7%
Breakeven Load Factor
70.2%
75.1%
-4.9 p.p. 66.7%
3.5 p.p.
Adjusted Breakeven Load Factor (1)
73.7%
69.4%
4.3 p.p.
73.7%
0.0 p.p.
Fuel Gallons Consumed (Millions)
71.2
69.2
3.0%
69.4
2.7%
Avg. Price Per Fuel Gallon (US$ Dollars)
1.97
2.16
-8.6%
1.81
9.1%
Average Length of Haul (Miles)
2,079
2,071
0.4%
2,068
0.5%
Average Stage Length (Miles)
1,237
1,233
0.3%
1,194
3.6%
Departures
30,737 30,619 0.4%
30,313 1.4%
Block Hours
97,077 97,053 0.0%
95,171 2.0%
Average Aircraft Utilization (Hours)
10.5
10.8
-2.3%
10.4
0.9%
Operating Revenues (US$ mm)
569.0
547.2
4.0%
494.4
15.1%
Operating Income (US$ mm)
77.2
50.6
52.7%
34.2
125.8%
Operating Margin
13.6%
9.2%
4.3 p.p.
6.9%
6.7 p.p.
Net Income (US$ mm)
74.0
6.2
n/m
54.5
35.7%
Adjusted Net Income (US$ mm) (1)
55.3
37.4
47.8%
21.5
157.2%
EPS - Basic and Diluted (US$)
1.75
0.14
n/m
1.29
34.9%
Adjusted EPS - Basic and Diluted (US$) (1) 1.30
0.85
53.6%
0.51
155.7%
# of Shares - Basic and Diluted (’000)
42,372 44,030 -3.8%
42,117 0.6%

(1)Adjusted Breakeven Load Factor, Adjusted Net Income and Adjusted EPS for 3Q16, 3Q15, and 2Q16 exclude non-cash charges/gains associated with the mark-to-market of fuel hedges and 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 3Q16 EARNINGS RELEASE AVAILABLE FOR DOWNLOAD AT: http://investor.shareholder.com/copa/results.cfm

3Q16 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST

Date:
Nov 9, 2016
Time:
11:00 AM US ET (11:00 AM Local Time)
Conference telephone number: 877-293-5456 (US Domestic Callers)
707-287-9357 (International Callers)
Speakers:
Pedro Heilbron, Chief Executive Officer
Jos? 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 74 destinations in 31 countries in North, Central and South America and the Caribbean with one of the youngest and most modern fleets in the industry, consisting of 99 aircraft: 78 Boeing 737NG aircraft and 21 EMBRAER-190s. For more information visit: www.copa.com.

CONTACT: Copa Holdings S.A. Investor Relations: Ph: + (507) 304-2774 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
%
3Q16
3Q15
Change
2Q16
Change
Operating Revenues
Passenger Revenue
545,066
523,531
4.1%
472,931
15.3%
Cargo, mail and other
23,959
23,716
1.0%
21,518
11.3%
Total Operating Revenue
569,025
547,247
4.0%
494,449
15.1%
Operating Expenses
Aircraft fuel
140,366
149,197
-5.9%
125,260
12.1%
Salaries and benefits
73,194
71,902
1.8%
69,065
6.0%
Passenger servicing
65,612
65,175
0.7%
63,560
3.2%
Commissions
20,862
22,632
-7.8%
20,642
1.1%
Reservations and sales
23,970
19,636
22.1%
23,881
0.4%
Maintenance, material and repairs
32,410
25,946
24.9%
26,190
23.7%
Depreciation
35,525
35,485
0.1%
34,815
2.0%
Flight operations
32,893
30,928
6.4%
30,540
7.7%
Aircraft rentals
30,282
30,409
-0.4%
30,833
-1.8%
Landing fees and other rentals
13,828
14,585
-5.2%
14,046
-1.6%
Other
22,893
30,796
-25.7%
21,434
6.8%
Total Operating Expense
491,835
496,691
-1.0%
460,266
6.9%
Operating Income
77,191
50,556
52.7%
34,183
125.8%
Non-operating Income (Expense):
Interest expense
(9,683)
(8,271)
17.1%
(9,147)
5.9%
Interest income
3,506
5,728
-38.8%
3,238
8.3%
Other, net
15,658
(37,600)
n/m
32,025
-51.1%
Total Non-Operating Income/(Expense) 9,481
(40,143)
n/m
26,117
-63.7%
Income before Income Taxes
86,672
10,413
732.4%
60,299
43.7%
Provision for Income Taxes
12,654
4,200
201.3%
5,772
119.2%
Net Income
74,018
6,213
1091.3%
54,527
35.7%
EPS - Basic and Diluted
1.75
0.14
1137.9%
1.29
34.9%
Shares - Basic and Diluted
42,371,617
44,030,111
-3.8%
42,117,261
0.6%
Copa Holdings, S. A.
Balance Sheet - IFRS
(US$ Thousands)
September 30
December 31
2016
2015
(Unaudited)
(Audited)
ASSETS
Current Assets:
Cash and cash equivalents
$
221,803
$
204,715
Restricted cash and cash equivalents
10,128
64,228
Short-term investments
540,502
416,005
Total cash, cash equivalents and short-term investments
772,433
684,948
Accounts receivable, net of allowance for doubtful accounts
110,278
105,135
Accounts receivable from related parties
297
642
Expendable parts and supplies, net of allowance for obsolescence
70,379
62,247
Prepaid expenses
62,299
48,667
Other current assets
15,726
5,946
Total Current Assets
1,031,412
907,585
Long-term investments
954
861
Property and Equipment:
Owned property and equipment:
Flight equipment
3,102,322
3,030,361
Other equipment
125,802
121,205
3,228,124
3,151,565
Less: Accumulated depreciation
(830,920)
(743,982)
2,397,204
2,407,583
Purchase deposits for flight equipment
233,749
243,070
Total Property and Equipment
2,630,953
2,650,653
Other Assets:
Long term account receivable
605
-
Net pension asset
9,067
6,050
Goodwill
20,380
20,380
Intangible asset
53,125
49,046
Deferred tax Assets
14,595
12,708
Other assets
51,252
68,193
Total Other Assets
149,024
156,377
Total Assets
$
3,812,343
$
3,715,476
LIABILITIES AND SHAREHOLDER’S EQUITY
Current Liabilities:
Current maturities of long-term debt
$
214,014
$
245,514
Accounts payable
100,396
94,741
Accounts payable to related parties
7,196
5,605
Air traffic liability
392,937
352,110
Frequent flyer deferred revenue
31,151
18,884
Taxes and interest payable
85,211
67,242
Accrued expenses payable
72,561
82,948
Other current liabilities
31,784
118,623
Total Current Liabilities
935,250
985,667
Non-Current Liabilities:
Long-term debt
999,537
1,055,183
Other long-term liabilities
64,660
54,339
Deferred tax liabilities
40,774
32,865
Total Non-Current Liabilities
1,104,971
1,142,387
Total Liabilities
2,040,221
2,128,054
Shareholders’ Equity:
Class A - 33,731,823 issued and
31,111,310 outstanding
20,988
20,924
Class B - 10,938,125 shares issued and outstanding
7,466
7,466
Additional paid in capital
62,699
57,455
Treasury Stock
(136,388)
(136,388)
Retained earnings
1,818,133
1,638,733
Accumulated other comprehensive income (loss)
(776)
(768)
Total Shareholders’ Equity
1,772,122
1,587,422
Total Liabilities and Shareholders’ Equity
$
3,812,343
$
3,715,476
Copa Holdings, S. A. and subsidiaries
Consolidated Statement of Cash Flows
For the nine months ended September 30,
(In US$ thousands)
2016
2015
2014
(Unaudited)
(Unaudited)
(Unaudited)
Cash flow from operating activities
384,822
236,743
148,334
Cash flow (used in) from investing activities
(170,057)
(39,658)
8,672
Cash flow used in financing activities
(197,677)
(282,982)
(109,378)
Net increase (decrease) in cash and cash equivalents
17,088
(85,897)
47,628
Cash and cash equivalents at January 1
204,715
207,437
139,110
Cash and cash equivalents at September 30
$
221,803
$
121,540
$
186,738
Short-term investments *
540,502
484,242
698,945
Long-term investments **
954
428,259
240,097
Restricted cash and cash equivalents ***
10,128
48,702
-
Total cash and cash equivalents and investments at September 30
$
773,387
$
1,082,743
$
1,125,780
* Short-term investments include $265 million of cash in Venezuela at September 2014.
** Long-term investments include $427 million and $239 million at September 2015 and 2014 of cash in Venezuela, respectively
*** Restricted cash correspond to a margin calls to secure derivative financial instruments transactions.

NON-IFRS FINANCIAL MEASURE RECONCILIATION

This press release includes the following non IFRS financial measures: Adjusted Breakeven Load Factor, 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
3Q16
3Q15
2Q16
Net income as Reported
$74,018
$6,213
$54,527
Special Items (adjustments):
Unrealized gain (loss) on fuel hedging instruments
19,225
(26,800)
40,644
(Loss) gain due to devaluation of Venezuelan Bolivar
(484)
(2,100)
(7,607)
Unrealized gain (loss) on Shares Repurchased
0
(2,296)
0
Adjusted Net Income
$55,278
$37,408
$21,490
Shares used for Computation (in thousands)
Basic and Diluted
42,372
44,030
42,117
Adjusted earnings per share - Basic and Diluted
1.30
0.85
0.51
Reconciliation of Operating Costs per ASM
Excluding Fuel and Special Items
3Q16
3Q15
2Q16
Operating Costs per ASM as Reported
8.9
9.2
8.6
Aircraft fuel per ASM
(2.5)
(2.8)
(2.3)
Operating Costs per ASM excluding fuel
6.4
6.4
6.3
Reconciliation of Breakeven Load Factor
Excluding Special Items
3Q16
3Q15
2Q16
Total Operating Expenses, Non-Operating Results
495,007
541,034
439,922
and Provision for Income Taxes
Breakeven Load Factor
70.2%
75.1%
66.7%
Special Items (adjustments):
Unrealized gain (loss) on fuel hedging instruments
19,225
(26,800)
40,644
(Loss) gain due to devaluation of Venezuelan Bolivar
(484)
(2,100)
(7,607)
Unrealized (gain) loss on Shares Repurchased
0
(2,296)
0
Total Operating Expenses, Non-Operating Results
$513,748
$509,838
$472,959
and Provision for Income Taxes excluding special items
Adjusted Breakeven Load Factor (Excluding Special items)
73.7%
69.4%
73.7%

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/copa-holdings-reports-financial-results-for-the-third-quarter-of-2016-300359228.html

SOURCE Copa Holdings, S.A.

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