Copa Holdings Reports Net Income of US$32.0 Million and EPS of US$0.72 for the Second Quarter of 2012
PANAMA CITY, Aug. 8, 2012 /PRNewswire/ — Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the second quarter of 2012 (2Q12). 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 2011 (2Q11).
OPERATING AND FINANCIAL HIGHLIGHTS
- Copa Holdings reported net income of US$32.0 million for 2Q12, or diluted earnings per share (EPS) of US$0.72. Excluding special items, Copa Holdings would have reported adjusted net income of $58.6 million, or $1.32 per share, a 3.6% increase over adjusted net income of US$56.6 million and US$1.28 per share for 2Q11.
- Operating income for 2Q12 came in at US72.6 million, a 2.7% decrease over operating income of US$74.6 million in 2Q11. Operating margin for the period came in at 14.1%, compared to 17.4% in 2Q11, as a result of a 3.3% decline in unit revenues and a 2.7% increase in the effective price of jet fuel.
- Total revenues increased 20.6% to US$515.8 million. Yield per passenger mile increased 1.2% to 17.2 cents and operating revenue per available seat mile (RASM) decreased 3.3% to 13.1 cents. However, adjusting for a 9.6% increase in average length of haul, adjusted yields and adjusted RASM increased 5.9% and 1.2%, respectively.
- For 2Q12, passenger traffic (RPMs) grew 20.3% on a 24.8% capacity expansion, resulting in a consolidated load factor of 73.5%, or 2.8 percentage points below 2Q11.
- Operating cost per available seat mile (CASM) increased 0.6%, from 11.2 cents in 2Q11 to 11.3 cents in 2Q12. However, CASM excluding fuel costs remained flat year over year at 6.9 cents.
- Cash, short term and long term investments ended 2Q12 at US$718.2 million, representing 35% of the last twelve months’ revenues.
- During the second quarter, Copa Airlines took delivery of five Boeing 737-800 aircraft and returned two leased 737-700 aircraft. As a result, Copa Holdings ended the quarter with a consolidated fleet of 80 aircraft.
- In June, Copa Airlines launched service to four new destinations: Las Vegas (USA), Recife (Brazil), Liberia (Costa Rica) and Willemstad (Curacao). Also, on July 14, the airline launched service to Iquitos (Peru). As a result. Copa Airlines’ network now provides service to 64 destinations in 29 countries in North, Central and South America and the Caribbean.
- On June 21, Copa Airlines officially joined the Star Alliance, the largest and most important global airline network. Entry into Star Alliance strengthens the airlines’ successful alliance with United Airlines, as well as the Hub of the Americas’ position as the major connection center in the Americas.
- For 2Q12, Copa Holdings reported consolidated on-time performance of 83.7% and a flight-completion factor of 99.4%.
(
Consolidated Financial
& Operating
Highlights 2Q12 2Q11 % Change 1Q12 % Change
---------------------- ---- ---- -------- ---- --------
Revenue Passengers
Carried ('000) 1,658 1,511 9.8% 1,714 -3.2%
RPMs (mm) 2,886 2,400 20.3% 2,954 -2.3%
ASMs (mm) 3,923 3,145 24.8% 3,829 2.5%
Load Factor 73.5% 76.3% -2.8 p.p. 77.2% -3.6 p.p.
Yield 17.2 17.0 1.2% 17.7 -3.2%
PRASM (US$ Cents) 12.6 12.9 -2.5% 13.7 -7.8%
RASM (US$ Cents) 13.1 13.6 -3.3% 14.2 -7.3%
CASM (US$ Cents) 11.3 11.2 0.6% 11.3 0.2%
CASM Excl. Fuel (US$
Cents) 6.9 6.9 -0.1% 6.8 1.0%
Breakeven Load Factor
(1) 63.0% 58.5% 4.5 p.p. 61.2% 1.8 p.p.
Fuel Gallons Consumed
(Millions) 52.1 42.2 23.6% 51.3 1.7%
Avg. Price Per Fuel
Gallon (US$ Dollars) 3.32 3.24 2.7% 3.33 -0.2%
Average Length of Haul
(Miles) 1,740 1,588 9.6% 1,724 0.9%
Average Stage Length
(Miles) 1,063 973 9.2% 1,066 -0.3%
Departures 27,005 24,694 9.4% 26,647 1.3%
Block Hours 74,841 61,240 22.2% 73,480 1.9%
Average Aircraft
Utilization (Hours) 10.6 10.2 3.5% 11.0 -3.6%
Operating Revenues
(US$ mm) 515.8 427.7 20.6% 543.3 -5.0%
Operating Income (US$
mm) 72.6 74.6 -2.7% 111.6 -34.9%
Operating Margin 14.1% 17.4% -3.4 p.p. 20.5% -6.5 p.p.
Net Income (US$ mm) 32.0 41.3 -22.4% 95.9 -66.6%
Adjusted Net Income
(US$ mm) (1) 58.6 56.6 3.6% 90.6 -35.3%
EPS -Basic and
Diluted (US$) 0.72 0.93 -22.5% 2.16 -66.6%
Adjusted EPS -Basic
and Diluted (US$) (1) 1.32 1.28 3.5% 2.04 -35.3%
# of Shares -Basic
and Diluted ('000) 44,354 44,316 0.1% 44,341 0.0%
------------------- ------ ------ --- ------ ---
)
((1)() )Breakeven Load Factor, Adjusted Net Income and Adjusted EPS for 2Q12, 2Q11, and 1Q12 exclude non-cash charges/gains associated with the mark-to-market of fuel hedges.
Note: Attached to this press release is a reconciliation of non-IFRS financial measures to the comparable IFRS measures.
FULL 2Q12 EARNINGS RELEASE AVAILABLE FOR DOWNLOAD AT: http://investor.shareholder.com/copa/results.cfm
2Q12 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST
Date: August 9, 2012
Time: 11:00 a.m. US EDT (10:00 a.m. 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
Victor Vial, Chief Financial Officer
Copa Holdings is a leading Latin American provider of passenger and cargo services. The Company, through its operating subsidiaries, provides service to 64 destinations in 29 countries in North, Central and South America and the Caribbean with one of the youngest and most modern fleets in the industry, consisting of 80 aircraft: 54 Boeing 737NG aircraft and 26 EMBRAER-190s. For more information visit www.copaair.com.
CONTACT: Copa Holdings S.A.
Investor Relations:
Ph: (507) 304-2677
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 %
2Q12 2Q11 Change 1Q12 Change
---- ---- ------ ---- ------
Operating Revenues
Passenger Revenue 495,029 406,813 21.7% 523,812 -5.5%
Cargo, mail and other 20,814 20,850 -0.2% 19,444 7.0%
Total Operating Revenue 515,843 427,663 20.6% 543,257 -5.0%
Operating Expenses
Aircraft fuel 173,289 136,542 26.9% 170,875 1.4%
Salaries and benefits 61,123 52,697 16.0% 57,536 6.2%
Passenger servicing 50,943 38,745 31.5% 49,433 3.1%
Commissions 21,272 15,828 34.4% 22,223 -4.3%
Reservations and sales 20,586 17,399 18.3% 20,090 2.5%
Maintenance, material and repairs 23,954 16,911 41.6% 20,530 16.7%
Depreciation 21,214 18,564 14.3% 20,526 3.4%
Flight operations 24,991 19,551 27.8% 25,039 -0.2%
Aircraft rentals 17,191 11,186 53.7% 17,300 -0.6%
Landing fees and other rentals 10,931 10,706 2.1% 10,846 0.8%
Other 17,730 14,923 18.8% 17,300 2.5%
Total Operating Expense 443,224 353,052 25.5% 431,699 2.7%
Operating Income 72,619 74,611 -2.7% 111,558 -34.9%
Non-operating Income (Expense):
Interest expense (8,583) (7,801) 10.0% (7,959) 7.8%
Interest income 2,741 1,575 74.0% 2,286 19.9%
Other, net (30,981) (17,322) 78.9% 4,866 nm
Total Non-Operating Income/(Expense) (36,823) (23,548) 56.4% (806) nm
Income before Income Taxes 35,796 51,063 -29.9% 110,751 -67.7%
Provision for Income Taxes 3,790 9,800 -61.3% 14,822 -74.4%
Net Income 32,006 41,263 -22.4% 95,930 -66.6%
---------- ------ ------ ----- ------ -----
EPS - Basic and Diluted 0.72 0.93 -22.5% 2.16 -66.6%
Shares - Basic and Diluted 44,353,845 44,315,841 0.1% 44,340,562 0.0%
Copa Holdings, S.A.
Balance Sheet - IFRS
(US$ Thousands) June 30, December 31,
2012 2011
---- ----
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and cash equivalents $255,828 $243,801
Short-term investments 244,509 262,345
------- -------
Total cash, cash equivalents and short-term investments 500,337 506,146
Accounts receivable, net of allowance for doubtful accounts 134,773 142,297
Accounts receivable from related parties 513 704
Expendable parts and supplies, net of allowance for obsolescence 43,686 42,382
Prepaid expenses 46,210 40,058
Other current assets 7,043 22,655
----- ------
Total Current Assets 732,562 754,242
Long-term investments 217,859 104,834
Property and Equipment:
Owned property and equipment:
Flight equipment 2,284,925 2,036,983
Other equipment 61,979 67,577
------ ------
2,346,904 2,104,560
Less: Accumulated depreciation (387,186) (346,656)
--------
1,959,718 1,757,904
Purchase deposits for flight equipment 166,711 242,287
------- -------
Total Property and Equipment 2,126,429 2,000,191
Other Assets:
Net pension asset 9,406 8,974
Goodwill 27,322 25,099
Intangible asset 56,518 47,047
Other assets 122,564 125,409
------- -------
Total Other Assets 215,810 206,529
Total Assets $3,292,660 $3,065,796
========== ==========
LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities:
Current maturities of long-term debt $114,522 $131,069
Accounts payable 82,497 92,842
Accounts payable to related parties 14,902 22,074
Air traffic liability 359,057 297,135
Taxes and interest payable 85,663 71,223
Accrued expenses payable 42,190 30,472
Other current liabilities 16,277 13,845
------ ------
Total Current Liabilities 715,108 658,660
Non-Current Liabilities:
Long-term debt 1,063,745 936,657
Post employment benefits liability 5,910 5,847
Other long-term liabilities 42,667 44,657
Deferred tax liabilities 32,052 30,444
------ ------
Total Non-Current Liabilities 1,144,374 1,017,605
Total Liabilities 1,859,482 1,676,265
--------- ---------
Shareholders' Equity:
Class A - 33,341,822 shares issued and outstanding 22,496 22,495
Class B - 10,938,125 shares issued and outstanding 7,466 7,466
Additional paid in capital 37,237 33,567
Retained earnings 1,359,341 1,324,394
Accumulated other comprehensive income (loss) 6,638 1,609
----- -----
Total Shareholders' Equity 1,433,178 1,389,531
Total Liabilities and Shareholders' Equity $3,292,660 $3,065,796
========== ==========
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 2Q12 2Q11 1Q12
---- ---- ----
Net income as Reported $32,006 $41,263 $95,930
Special Items
(adjustments):
Unrealized (gain) loss
on fuel hedging
instruments (1) 26,587 15,315 (5,328)
Adjusted Net Income $58,593 $56,578 $90,602
======= ======= =======
Shares used for
Computation (in
thousands)
Basic and Diluted 44,354 44,316 44,341
====== ====== ======
Adjusted earnings per
share -Basic and
Diluted 1.32 1.28 2.04
==== ==== ====
Reconciliation
Operating Costs per
ASM
Excluding Fuel and
Special Items 2Q12 2Q11 1Q12
---- ---- ----
Operating Costs per
ASM as Reported 11.3 11.2 11.3
Aircraft fuel per ASM (4.4) (4.3) (4.5)
---- ---- ----
Operating Costs per
ASM excluding fuel 6.9 6.9 6.8
=== === ===
FOOTNOTES:
(1) Includes unrealized (gains) losses resulting from the mark-to-market accounting for changes in the fair value of fuel hedging instruments. For 2Q12 and 2Q11, the Company recorded unrealized fuel hedge losses of US$26.6 million and US$15.3 million, and a fuel hedge gain of US$5.3 million for 1Q12.
SOURCE Copa Holdings, S.A.
