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07.08.2019 22:35:00
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Copa Holdings Reports Net Profit of $50.9 million and EPS of $1.20 for the Second Quarter of 2019
PANAMA CITY, Aug. 7, 2019 /PRNewswire/ -- Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the second quarter of 2019 (2Q19). 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 2018 (2Q18).
OPERATING AND FINANCIAL HIGHLIGHTS
- Copa Holdings reported net profit of US$50.9 million for 2Q19 or earnings per share (EPS) of US$1.20, compared to net profit of US$49.8 million or earnings per share of US$1.17 in 2Q18.
- Operating profit for 2Q19 came in at US$82.6 million, representing a 36.7% increase from an operating profit of US$60.4 million in 2Q18, as a result of a 6.3% increase in unit revenues (RASM), partly offset by a 2.5% increase in unit costs (CASM) which was mostly related to the grounding of the MAX fleet.
- Operating margin for 2Q19 came in at 12.8%, compared to an operating margin of 9.5% in 2Q18.
- Capacity (ASMs) decreased 4.3% in 2Q19, all due to the grounding of the MAX fleet, while consolidated passenger traffic (RPMs) decreased only 2.5%. As a result, consolidated load factor for the quarter increased 1.6 percentage points to 85.1%.
- Total revenues for 2Q19 increased 1.7% to US$645.1 million. Yield per passenger mile increased 4.1% to 11.8 cents and RASM came in at 10.5 cents, 6.3% higher than 2Q18.
- Operating cost per available seat mile (CASM) increased 2.5%, from 8.9 cents in 2Q18 to 9.1 cents in 2Q19. Excluding Fuel, unit costs increased 5.7% from 5.9 cents in 2Q18 to 6.2 cents in 2Q19, mainly due to the lower capacity and the timing of certain expenses.
- Cash, short-term and long-term investments ended the quarter at US$ 893.3 million, representing approximately 34% of the last twelve months' revenues.
- Despite the operational challenges due to the grounding of the MAX fleet, Copa Airlines delivered an on-time performance of 90.5% and a flight-completion factor of 99.8%, maintaining its position among the very best in the industry.
- Copa Holdings ended the quarter with a consolidated fleet of 104 aircraft – 68 Boeing 737-800s, 14 Boeing 737-700s, 16 Embraer-190s and 6 Boeing MAX9s
- The Company has not taken any aircraft deliveries since the world-wide grounding of the MAX fleet took effect in March. As per its original growth plan for 2019, The Company should have received three additional MAX 9s in the first half of 2019, and four more MAX 9s in the rest of the year.
Subsequent Events
- Copa Holdings will pay its third quarterly dividend of $0.65 per share on September 13, to all Class A and Class B shareholders on record as of August 30, 2019.
- As part of the world-wide grounding of the MAX fleet, the Company has removed all MAX operations from its schedule until December 15th, 2019.
- The Company is announcing it will host an Investor Day, on December 3rd and 4th in Panama City.
Consolidated Financial | 2Q19 | 2Q18* | Variance | 1Q19 | Variance |
Revenue Passengers Carried ('000) | 2,550 | 2,458 | 3.7% | 2,588 | -1.5% |
RPMs (mm) | 5,249 | 5,384 | -2.5% | 5,345 | -1.8% |
ASMs (mm) | 6,166 | 6,446 | -4.3% | 6,415 | -3.9% |
Load Factor | 85.1% | 83.5% | 1.6 p.p. | 83.3% | 1.8 p.p. |
Yield | 11.8 | 11.4 | 4.1% | 12.1 | -2.6% |
PRASM (US$ Cents) | 10.1 | 9.5 | 6.1% | 10.1 | -0.5% |
RASM (US$ Cents) | 10.5 | 9.8 | 6.3% | 10.5 | -0.1% |
CASM (US$ Cents) | 9.1 | 8.9 | -2.5% | 8.7 | -4.6% |
CASM Excl. Fuel (US$ Cents) | 6.2 | 5.9 | -5.7% | 6.1 | -3.0% |
Fuel Gallons Consumed (Millions) | 79.3 | 81.7 | 2.9% | 81.2 | 2.3% |
Avg. Price Per Fuel Gallon (US$ Dollars) | 2.22 | 2.35 | 5.3% | 2.09 | -6.6% |
Average Length of Haul (Miles) | 2,058 | 2,190 | -6.0% | 2,065 | -0.3% |
Average Stage Length (Miles) | 1,279 | 1,331 | -3.9% | 1,299 | -1.5% |
Departures | 32,676 | 32,843 | -0.5% | 33,329 | -2.0% |
Block Hours | 106,425 | 110,893 | -4.0% | 110,089 | -3.3% |
Average Aircraft Utilization (Hours) | 11.2 | 12.1 | -6.8% | 11.6 | -3.5% |
Operating Revenues (US$ mm) | 645.1 | 634.1 | 1.7% | 672.2 | -4.0% |
Operating Profit (US$ mm) | 82.6 | 60.4 | 36.7% | 112.9 | -26.8% |
Operating Margin | 12.8% | 9.5% | 3.3 p.p. | 16.8% | -4.0 p.p. |
Net Profit (US$ mm) | 50.9 | 49.8 | 2.1% | 89.4 | -43.1% |
Adjusted Net Profit (US$ mm) (1) | 50.9 | 38.4 | 32.3% | 89.4 | -43.1% |
EPS - Basic and Diluted (US$) | 1.20 | 1.17 | 2.1% | 2.11 | -43.1% |
Adjusted EPS - Basic and Diluted (US$) (1) | 1.20 | 0.91 | 32.2% | 2.11 | -43.1% |
# of Shares - Basic and Diluted ('000) | 42,478 | 42,447 | 0.1% | 42,478 | 0.0% |
(1) Adjusted Net Profit and Adjusted EPS for 2Q18, exclude a currency translation adjustment. | |||||
* Restated for the retrospective adoption of IFRS 16 | |||||
Notes:
Attached to this press release is a reconciliation of non-IFRS financial measures to the comparable IFRS measures.
The Company is taking into account the 6 MAX9 aircraft currently in its fleet in the calculation of all its financial and operating statistics.
FULL 2Q19 EARNINGS RELEASE AVAILABLE FOR DOWNLOAD AT:
https://copa.gcs-web.com/financial-information/quarterly-results
2Q19 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST | |
Date: | August 8, 2019 |
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 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 104 aircraft: 82 Boeing 737NG aircraft, 6 Boeing 737 MAX9s and 16 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 | % | ||||||
2Q19 | 2Q18* | Change | 1Q19 | Change | ||||||
Operating Revenues | ||||||||||
Passenger revenue | 620,538 | 611,605 | 1.5% | 648,790 | -4.4% | |||||
Cargo and mail revenue | 16,464 | 16,003 | 2.9% | 15,316 | 7.5% | |||||
Other operating revenue | 8,100 | 6,528 | 24.1% | 8,063 | 0.5% | |||||
Total Operating Revenue | 645,102 | 634,136 | 1.7% | 672,169 | -4.0% | |||||
Operating Expenses | ||||||||||
Fuel | 177,169 | 192,474 | -8.0% | 170,163 | 4.1% | |||||
Wages, salaries, benefits and other employees' expenses | 108,342 | 108,449 | -0.1% | 113,662 | -4.7% | |||||
Passenger servicing | 25,530 | 26,113 | -2.2% | 25,571 | -0.2% | |||||
Airport facilities and handling charges | 44,698 | 45,945 | -2.7% | 45,362 | -1.5% | |||||
Sales and distribution | 51,289 | 52,760 | -2.8% | 53,133 | -3.5% | |||||
Maintenance, materials and repairs | 31,235 | 27,840 | 12.2% | 28,047 | 11.4% | |||||
Depreciation and amortization | 70,549 | 70,003 | 0.8% | 68,187 | 3.5% | |||||
Flight operations | 25,450 | 25,417 | 0.1% | 25,875 | -1.6% | |||||
Other operating and administrative expenses | 28,240 | 24,706 | 14.3% | 29,297 | -3.6% | |||||
Total Operating Expense | 562,502 | 573,707 | -2.0% | 559,296 | 0.6% | |||||
Operating Profit | 82,601 | 60,430 | 36.7% | 112,873 | -26.8% | |||||
Non-operating Income (Expense): | ||||||||||
Finance cost | (13,573) | (13,036) | 4.1% | (14,010) | -3.1% | |||||
Finance income | 6,041 | 6,038 | 0.0% | 5,954 | 1.5% | |||||
Gain (loss) on foreign currency fluctuations | (2,213) | 3,992 | n/m | (5,960) | n/m | |||||
Other non-operating income (expense) | (2,115) | (279) | n/m | (825) | 156.4% | |||||
Total Non-Operating Income/(Expense) | (11,859) | (3,285) | 261.0% | (14,841) | -20.1% | |||||
Profit before taxes | 70,742 | 57,144 | 23.8% | 98,032 | -27.8% | |||||
Income tax expense | 19,876 | 7,343 | 170.7% | 8,600 | 131.1% | |||||
Net Profit | 50,866 | 49,801 | 2.1% | 89,431 | -43.1% | |||||
EPS - Basic and Diluted | 1.20 | 1.17 | 2.1% | 2.11 | -43.1% | |||||
Shares - Basic and Diluted | 42,478,415 | 42,447,386 | 0.1% | 42,477,761 | 0.0% | |||||
* Restated for retrospective adoption of IFRS 16 | ||||||||||
Copa Holdings, S. A. and subsidiaries | ||
Consolidated statement of financial position | ||
(US$ Thousands) | June 30 | December 31 |
2019 | 2018 | |
(Unaudited) | (Restated) * | |
ASSETS | ||
Current Assets | ||
Cash and cash equivalents | 226,140 | 156,158 |
Short-term investments | 523,134 | 566,200 |
Total cash, cash equivalents and short-term investments | 749,275 | 722,359 |
Accounts receivable, net | 159,004 | 115,831 |
Accounts receivable from related parties | 3,225 | 223 |
Expendable parts and supplies, net | 93,496 | 86,530 |
Prepaid expenses | 52,522 | 74,384 |
Prepaid income tax | 3,610 | 10,357 |
Other current assets | 26,342 | 54,387 |
TOTAL CURRENT ASSETS | 1,087,474 | 1,064,071 |
Long-term investments | 144,072 | 138,846 |
Long-term accounts receivable | 1,942 | 1,177 |
Long-term prepaid expenses | 28,874 | 25,637 |
Property and equipment, net | 2,754,928 | 2,701,322 |
Right of use assets | 339,244 | 361,993 |
Intangible, net | 107,399 | 101,168 |
Net pension asset | 5,586 | 5,091 |
Deferred tax assets | 17,343 | 16,041 |
Other Non-Current Assets | 34,223 | 33,899 |
TOTAL NON-CURRENT ASSETS | 3,433,612 | 3,385,174 |
TOTAL ASSETS | 4,521,085 | 4,449,245 |
Current maturities of long-term debt | 236,541 | 311,965 |
Current portion of lease liability | 100,105 | 102,452 |
Accounts payable | 87,672 | 129,851 |
Accounts payable to related parties | 13,172 | 14,674 |
Air traffic liability | 526,299 | 471,676 |
Frequent flyer deferred revenue | 74,425 | 67,814 |
Taxes and interest payable | 58,536 | 44,749 |
Employee benefits obligations | 39,473 | 42,890 |
Other Current Liabilities | 277 | 604 |
TOTAL CURRENT LIABILITIES | 1,136,501 | 1,186,674 |
- | ||
Long-term debt | 1,005,385 | 975,283 |
Lease Liability | 253,057 | 273,231 |
Other long - term liabilities | 175,180 | 161,571 |
Deferred tax Liabilities | 60,455 | 48,940 |
TOTAL NON-CURRENT LIABILITIES | 1,494,077 | 1,459,025 |
TOTAL LIABILITIES | 2,630,578 | 2,645,700 |
EQUITY | ||
Issued Capital | ||
Class A -33,825,130 issued and 31,328,697 outstanding | 21,136 | 21,087 |
Class B common stock - 10,938,125 | 7,466 | 7,466 |
Additional Paid-In Capital | 82,976 | 80,041 |
Treasury Stock | (136,388) | (136,388) |
Retained Earnings | 1,780,398 | 1,835,566 |
Net profit | 140,297 | - |
Other comprehensive loss | (5,378) | (4,227) |
TOTAL EQUITY | 1,890,507 | 1,803,545 |
TOTAL EQUITY LIABILITIES | 4,521,085 | 4,449,245 |
*Restated for the retrospective adoption of IFRS 16. | ||
Consolidated Statement of Cash Flows | ||||||
For the six months ended June 30, | ||||||
(In US$ thousands) | ||||||
2019 | 2018 | 2017 | ||||
(Unaudited) | (Unaudited) | (Unaudited) | ||||
Cash flow from operating activities | 331,143 | 267,114 | 330,227 | |||
Cash flow used in investing activities | (8,691) | (105,907) | (241,655) | |||
Cash flow used in financing activities | (252,469) | (228,840) | (227,391) | |||
Net increase (decrease) in cash and cash equivalents | 69,982 | (67,633) | (138,819) | |||
Cash and cash equivalents at January 1 | 156,158 | 238,792 | 331,687 | |||
Cash and cash equivalents at June 30 | $ 226,140 | $ 171,159 | $ 192,868 | |||
Short-term investments | 523,134 | 604,869 | 679,991 | |||
Long-term investments | 144,072 | 171,356 | 953 | |||
Total cash and cash equivalents and investments at June 30 | $ 893,346 | $ 947,384 | $ 873,812 | |||
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 | 2Q19 | 2Q18* | 1Q19 | |||
Net profit as Reported | $ 50,866 | $ 49,801 | $ 89,431 | |||
Special Items (adjustments): | ||||||
Gain on foreign currency fluctuations | $ (11,364) | |||||
Adjusted Net Profit | $ 50,866 | $ 38,437 | $ 89,431 | |||
Shares used for Computation (in thousands) | ||||||
Basic and Diluted | 42,478 | 42,447 | 42,478 | |||
Adjusted earnings per share - Basic and Diluted | $ 1.20 | $ 0.91 | $ 2.11 | |||
Reconciliation of Operating Costs per ASM | ||||||
Excluding Fuel (CASM Excl. Fuel) | 2Q19 | 2Q18* | 1Q19 | |||
Operating Costs per ASM as Reported (in US$ Cents) | 9.1 | 8.9 | 8.7 | |||
Aircraft fuel per ASM (in US$ Cents) | (2.9) | (3.0) | (2.7) | |||
Operating Costs per ASM excluding fuel (in US$ Cents) | 6.2 | 5.9 | 6.1 | |||
* Restated for retrospective adoption of IFRS 16 | ||||||
View original content:http://www.prnewswire.com/news-releases/copa-holdings-reports-net-profit-of-50-9-million-and-eps-of-1-20-for-the-second-quarter-of-2019--300898239.html
SOURCE Copa Holdings, S.A.
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