CPA
$75.57
Copa Holdings S.A.
($1.36)
(1.77%)
Earnings Details
2nd Quarter June 2018
Wednesday, August 08, 2018 5:29:00 PM
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Summary

Copa Holdings S.A. (CPA) Recent Earnings

Copa Holdings S.A. (CPA) reported 2nd Quarter June 2018 earnings of $1.18 per share on revenue of $634.1 million. The consensus earnings estimate was $1.28 per share. Revenue grew 9.7% 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
$1.18
Earnings Whisper
-
Consensus Estimate
$1.28
Reported Revenue
$634.1 Mil
Revenue Estimate
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Copa Holdings Reports Net Income of $49.9 million and EPS of $1.18 for the Second Quarter of 2018

PANAMA CITY, Aug. 8, 2018 /PRNewswire/ -- Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the second quarter of 2018 (2Q18). 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 second quarter of 2017 (2Q17).

OPERATING AND FINANCIAL HIGHLIGHTS

  • Copa Holdings reported net income of US$49.9 million for 2Q18 or earnings per share (EPS) of US$1.18, as compared to net income of US$58.6 million or earnings per share of US$1.38 in 2Q17.
  • Operating income for 2Q18 came in at US$57.1 million, representing a 27.3% decrease over operating income of US$78.6 million in 2Q17, mainly as a result of a 4.8% increase in unit costs (CASM) due to higher fuel prices. Operating margin for 2Q18 came in at 9.0%, compared to an operating margin of 13.7% in 2Q17.
  • For 2Q18, consolidated passenger traffic grew 13% while consolidated capacity grew 11.2%. As a result, consolidated load factor for the quarter increased 1.3 percentage points to 83.5%.
  • Total revenues for 2Q18 increased 10.5% to US$634.1 million. Yield per passenger mile decreased 2.2% to 11.4 cents and RASM came in at 9.8 cents, or 0.6% below 2Q17.
  • Operating cost per available seat mile (CASM) increased 4.8%, from 8.5 cents in 2Q17 to 9.0 cents in 2Q18, driven by a 32.9% higher effective fuel price. CASM excluding fuel costs decreased 5.1% from 6.3 cents in 2Q17 to 6.0 cents in 2Q18, mainly as a result of timing of expenses as well as cost reduction efforts.
  • Cash, short-term and long-term investments ended the quarter slightly over US$1.0 billion, representing 38.8% of the last twelve months' revenues.
  • Copa Holdings ended the quarter with a consolidated fleet of 101 aircraft – 68 Boeing 737-800s, 14 Boeing 737-700s, and 19 Embraer-190s.
  • For 2Q18, Copa Airlines had an on-time performance of 89.9% and a flight-completion factor of 99.8%, maintaining its position among the best in the industry.

Subsequent Events  

  • In July, Copa Airlines was awarded "Best Airline" and "Best Airline Staff" in its region by the Skytrax World Airline Awards.
  • During the month of July, Copa Airlines began service to its 16th destination in the Caribbean, Bridgetown, Barbados.
  • Also in July, Copa Airlines began service to its 8th and 9th destinations in Brazil, Fortaleza and Salvador de Bahía.
  • The Company is disclosing today that it has been in discussions with United Airlines, Inc. and Avianca Holdings regarding the possibility of establishing a three-way joint business agreement that would cover our combined network between the United States and Latin America. We can provide no assurances as to whether or when the parties will finalize the agreement.
  • Copa Holdings will pay its third quarterly dividend of $0.87 per share on September 14, to all Class A and Class B shareholders on record as of August 31, 2018.

 

Consolidated Financial
& Operating Highlights

2Q18

2Q17*

Variance vs. 2Q17

1Q18

Variance vs. 1Q18

Revenue Passengers Carried ('000)

2,458

2,262

8.7%

2,465

-0.3%

RPMs (mm) 

5,384

4,766

13.0%

5,223

3.1%

ASMs (mm) 

6,446

5,796

11.2%

6,297

2.4%

Load Factor 

83.5%

82.2%

1.3 p.p.

83.0%

0.6 p.p.

Yield

11.4

11.6

-2.2%

13.3

-14.6%

PRASM (US$ Cents) 

9.5

9.6

-0.7%

11.0

-14.0%

RASM (US$ Cents) 

9.8

9.9

-0.6%

11.4

-13.4%

CASM (US$ Cents) 

9.0

8.5

4.8%

9.1

-1.4%

CASM Excl. Fuel (US$ Cents) 

6.0

6.3

-5.1%

6.3

-5.5%

Fuel Gallons Consumed (Millions) 

81.7

74.1

10.2%

80.1

1.9%

Avg. Price Per Fuel Gallon (US$ Dollars)

2.35

1.77

32.9%

2.16

8.6%

Average Length of Haul (Miles)

2,190

2,107

4.0%

2,119

3.4%

Average Stage Length (Miles)

1,331

1,272

4.6%

1,322

0.7%

Departures

32,843

31,092

5.6%

32,339

1.6%

Block Hours

110,893

102,435

8.3%

108,635

2.1%

Average Aircraft Utilization (Hours)

12.1

11.2

8.2%

12.0

0.6%

Operating Revenues (US$ mm) 

634.1

573.7

10.5%

715.0

-11.3%

Operating Income (US$ mm)

57.1

78.6

-27.3%

143.4

-60.2%

Operating Margin 

9.0%

13.7%

-4.7 p.p.

20.1%

-11.1 p.p.

Net Income (US$ mm)

49.9

58.6

-14.9%

136.5

-63.4%

Adjusted Net Income (US$ mm) (1)

49.9

58.4

-14.6%

136.5

-63.4%

EPS - Basic and Diluted (US$)

1.18

1.38

-14.9%

3.22

-63.4%

Adjusted EPS - Basic and Diluted (US$) (1)

1.18

1.38

-14.7%

3.22

-63.4%

# of Shares - Basic and Diluted ('000) 

42,447

42,419

0.1%

42,439

0.0%

(1)Adjusted Net Income and Adjusted EPS for 2Q17 exclude non-cash charges/gains associated with the mark-to-market of fuel hedges.

* Restated for retrospective adoption of IFRS15.

Note:  Attached to this press release is a reconciliation of non-IFRS financial measures to the comparable IFRS measures.

FULL 2Q18 EARNINGS RELEASE AVAILABLE FOR DOWNLOAD AT: http://investor.shareholder.com/copa/results.cfm

2Q18 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST

Date:

August 9, 2018

Time:

12:00 NOON US ET (11:00 AM Local Time)

Conference telephone number: 

877-293-5456 (US Domestic Callers)


707-287-9357 (International Callers)

Webcast:

http://investor.shareholder.com/copa/events.cfm

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 32 countries in North, Central and South America and the Caribbean with one of the youngest and most modern fleets in the industry, consisting of 101 aircraft: 82 Boeing 737NG aircraft and 19 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


%



2Q18


2Q17*


Change


1Q18


Change

Operating Revenues











Passenger revenue


611,605


553,736


10.5%


694,912


-12.0%

Cargo and mail revenue


16,003


13,994


14.4%


14,337


11.6%

Other operating revenue


6,528


5,937


10.0%


5,775


13.0%

Total Operating Revenue


634,136


573,666


10.5%


715,024


-11.3%












Operating Expenses











Fuel


192,474


130,878


47.1%


173,957


10.6%

Wages, salaries, benefits and other employees' expenses


108,449


99,603


8.9%


110,630


-2.0%

Passenger servicing


26,113


22,883


14.1%


25,462


2.6%

Airport facilities and handling charges


45,945


42,614


7.8%


44,547


3.1%

Sales and distribution


52,760


48,919


7.9%


53,779


-1.9%

Maintenance, materials and repairs


27,840


27,404


1.6%


31,724


-12.2%

Depreciation and amortization


43,261


40,572


6.6%


41,909


3.2%

Flight operations


25,417


25,999


-2.2%


27,664


-8.1%

Aircraft rentals and other rentals


32,968


33,614


-1.9%


33,330


-1.1%

Cargo and courier expenses


2,046


1,892


8.1%


2,047


-0.1%

Other operating and administrative expenses


19,787


20,727


-4.5%


26,579


-25.6%

Total Operating Expense


577,061


495,105


16.6%


571,628


1.0%












Operating Profit


57,076


78,561


-27.3%


143,396


-60.2%












Non-operating Income (Expense):











Finance cost


(9,181)


(8,938)


2.7%


(8,564)


7.2%

Finance income


6,038


4,249


42.1%


5,248


15.1%

Gain (loss) on foreign currency fluctuations


3,583


(2,858)


n/m


7,723


-53.6%

Net change in fair value of derivatives


-


175


n/m


-


n/m

Other non-operating income (expense)


(279)


(190)


n/m


496


n/m

Total Non-Operating Income/(Expense)


162


(7,561)


n/m


4,902


n/m












Profit before taxes


57,237


71,000


-19.4%


148,298


-61.4%












Income tax expense


7,343


12,401


-40.8%


11,825


-37.9%












Net Profit


49,894


58,599


-14.9%


136,473


-63.4%























EPS - Basic and Diluted


1.18


1.38


-14.9%


3.22


-63.4%

Shares - Basic and Diluted


42,447,386


42,419,150


0.1%


42,438,748


0.0%












 *  Restated for retrospective adoption of IFRS 15 











 

Copa Holdings, S. A. and subsidiaries 



Balance Sheet - IFRS



(US$ Thousands)

June 30

December 31


2018

2017


 (Unaudited) 

 (Restated) * 




 ASSETS 






 Current Assets 



Cash and cash equivalents

225,329

238,792

Restricted cash and cash equivalents

-

-

Short-term investments

604,869

705,108

Total cash, cash equivalents and short-term investments

830,198

943,900




Accounts receivable, net

137,492

115,323

Accounts receivable from related parties

1,579

318

Expendable parts and supplies, net

87,375

81,825

Prepaid expenses

70,790

45,421

Other current assets

9,877

11,701

TOTAL CURRENT ASSETS

1,137,311

1,198,488




Long-term investments

171,356

65,953

Long-term accounts receivable

2,261

2,444

Long-term prepaid expenses

29,567

26,130

Property and equipment, net

2,919,857

2,825,904

Intangible, net

90,235

81,115

Net pension asset

4,091

3,185

Deferred tax assets

16,074

18,572

Other Non-Current Assets

28,564

31,140

TOTAL NON-CURRENT ASSETS

3,262,005

3,054,443




TOTAL ASSETS

4,399,316

4,252,931




 LIABILITIES AND EQUITY 






 Current Liabilities: 



Current maturities of long-term debt

248,628

298,462

Accounts payable

120,778

116,554

Accounts payable to related parties

15,296

12,880

Air traffic liability

542,476

477,168

Frequent flyer deferred revenue

59,985

50,312

Taxes and interest payable

58,308

81,440

Accrued expenses payable 

41,951

60,321

Income tax payable

1,028

3,700

Other Current Liabilities

354

1,156

TOTAL CURRENT LIABILITIES

1,088,804

1,101,993




Long-term debt

914,071

876,119

Other long - term liabilities

132,263

123,182

Deferred tax Liabilities

47,172

50,628

TOTAL NON-CURRENT LIABILITIES

1,093,506

1,049,929




TOTAL LIABILITIES

2,182,310

2,151,922




 EQUITY 



Issued Capital



Class A - 33,795,885 issued and 31,257,214 outstanding

21,087

21,038

Class B - 10,938,125 shares issued and outstanding

7,466

7,466

Additional Paid-In Capital

76,386

72,945

Treasury Stock

(136,388)

(136,388)

Retained Earnings

2,066,048

1,775,426

Net Income

186,367

364,410

Other Comprehensive Income

(3,960)

(3,888)

TOTAL EQUITY

2,217,006

2,101,009




TOTAL LIABILITIES AND EQUITY

4,399,316

4,252,931




 *  Restated for retrospective adoption of IFRS 15 






 

Copa Holdings, S. A. and subsidiaries 







Consolidated Statement of Cash Flows







For the six months ended June 30,







(In US$ thousands)

















2018


2017


2016










(Unaudited)


(Unaudited)


(Unaudited)

Cash flow from operating activities 


267,114


330,227


267,049

Cash flow used in investing activities 


(105,907)


(241,655)


(124,608)

Cash flow used in financing activities 


(174,670)


(176,614)


(139,539)

Net (decrease) increase  in cash and cash equivalents 


(13,463)


(88,042)


2,902

Cash and cash equivalents at January 1


238,792


331,687


204,715

Cash and cash equivalents at June 30 


$               225,329


$               243,645


$               207,617















Short-term investments 


604,869


679,991


535,484

Long-term investments


171,356


953


856

Restricted cash and cash equivalents


-


-


20,787

Total cash and cash equivalents and investments at June 30


$            1,001,554


$               924,589


$               764,744















* Restricted cash corresponds to margin calls to secure derivative financial instruments transactions. 



 

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 Adjusted Net Income







and Adjusted EPS


2Q18


2Q17*


1Q18








Net profit as Reported


$        49,894


$          58,599


$        136,473








Special Items (adjustments):







Net change in fair value of derivatives


$                  -


$              (175)


$                    -

Adjusted Net Income


$        49,894


$          58,424


$        136,473








Shares used for Computation (in thousands)







     Basic and Diluted


$          42,447


$          42,419


$          42,439








Adjusted earnings per share - Basic and Diluted


$              1.18


$              1.38


$              3.22








Reconciliation of Operating Costs per ASM







Excluding Fuel (CASM Excl. Fuel)


2Q18


2Q17*


1Q18








Operating Costs per ASM as Reported (in US$ Cents)


9.0


8.5


9.1

Aircraft fuel per ASM  (in US$ Cents)


(3.0)


(2.3)


(2.8)

Operating Costs per ASM excluding fuel  (in US$ Cents)


6.0


6.3


6.3








 *  Restated for retrospective adoption of IFRS 15 














 

Cision View original content:http://www.prnewswire.com/news-releases/copa-holdings-reports-net-income-of-49-9-million-and-eps-of-1-18-for-the-second-quarter-of-2018--300694286.html

SOURCE Copa Holdings, S.A.