Company Announcements

Copa Holdings Reports Financial Results for the Second Quarter of 2022

Adjusted Net Profit for the second quarter came in at US$13.2 million, or Adjusted EPS of US$0.32

PANAMA CITY, Panama , Aug. 3, 2022 /PRNewswire/ -- August 3, 2022Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the second quarter of 2022 (2Q22). 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 2019 (2Q19) (which the Company believes are more relevant than year-over-year comparisons due to the significant impacts in 2020 and 2021 of the COVID-19 pandemic).

OPERATING AND FINANCIAL HIGHLIGHTS

  • Copa Holdings' adjusted net profit, excluding special items, for 2Q22 came in at US$13.2 million or US$0.32 per share, as compared to an adjusted net profit of US$50.9 million or earnings per share of US$1.20 in 2Q19.
  • Copa Holdings reported an operating profit of US$42.3 million for the quarter and a 6.1% operating margin, compared to an operating profit of US$82.6 million and an operating margin of 12.8% in 2Q19.
  • Total revenues for 2Q22 came in at US$693.4 million, a 7.5% increase compared to 2Q19 revenues. Passenger revenue for 2Q22 was 5.9% higher than 2Q19, while cargo revenue was 62.4% higher than 2Q19. Yields increased 10.1% to 13.0 cents while load factors decreased 0.4 percentage points to 84.8%, compared to 2Q19, resulting in Revenue per Available Seat Mile (RASM) of 11.6 cents, or 11.3% higher than 2Q19.
  • Operating cost per available seat mile (CASM) increased 19.9% from 9.1 cents in 2Q19 to 10.9 cents in 2Q22, driven by higher fuel prices. CASM excluding fuel (Ex-fuel CASM) decreased 4.6% in the quarter compared to 2Q19 to 6.0 cents.
  • Capacity for 2Q22, measured in terms of available seat miles (ASMs), was 96.6% of the capacity flown in 2Q19.
  • Including special items of US$110.9 million, comprised of an unrealized mark-to-market gain related to the Company's convertible notes and an unrealized mark-to-market loss related to changes in the value of financial investments, the Company reported a net profit of US$124.1 million for the quarter or US$3.01 per share.
  • The Company ended the quarter with approximately US$1.1 billion in cash, short-term and long-term investments, which represents 47% of the last twelve months' revenues.
  • The Company closed the quarter with total debt, including lease liabilities, of US$1.6 billion.
  • During the quarter, the Company took delivery of one Boeing 737 MAX 9 aircraft.
  • Including three Boeing 737-700 aircraft in temporary storage and one Boeing 737-800 freighter, Copa Holdings ended the quarter with a consolidated fleet of 94 aircraft – 68 Boeing 737-800s, 17 Boeing 737 MAX 9s, and 9 Boeing 737-700s.
  • Copa Airlines had an on-time performance for the quarter of 85.9% and a flight completion factor of 99.8%.

 

Consolidated Financial
& Operating Highlights

2Q22

2Q19 (3)

Variance vs. 2Q19

1Q22

Variance vs. 1Q22

YTD22

YTD19

Variance vs. YTD19

Revenue Passengers Carried (000s)

2,481

2,550

-2.7 %

2,285

8.6 %

4,765

5,138

-7.3 %

Revenue Passengers OnBoard (000s)

3,796

3,810

-0.4 %

3,476

9.2 %

7,272

7,640

-4.8 %

RPMs (millions) 

5,047

5,249

-3.8 %

4,585

10.1 %

9,632

10,594

-9.1 %

ASMs (millions) 

5,955

6,166

-3.4 %

5,623

5.9 %

11,578

12,581

-8.0 %

Load Factor 

84.8 %

85.1 %

-0.4 p.p.

81.5 %

3.2 p.p.

83.2 %

84.2 %

-1.0 p.p.

Yield (US$ Cents) 

13.0

11.8

10.1 %

11.8

10.3 %

12.4

12.0

3.8 %

PRASM (US$ Cents) 

11.0

10.1

9.6 %

9.6

14.6 %

10.3

10.1

2.6 %

RASM (US$ Cents) 

11.6

10.5

11.3 %

10.2

14.6 %

10.9

10.5

4.4 %

CASM (US$ Cents) 

10.9

9.1

19.9 %

9.4

16.7 %

10.2

8.9

14.1 %

CASM Excl. Fuel (US$ Cents) 

6.0

6.2

-4.6 %

6.0

0.0 %

6.0

6.2

-3.1 %

Fuel Gallons Consumed (millions) 

71.5

79.3

-9.9 %

66.5

7.4 %

138.0

160.5

-14.0 %

Avg. Price Per Fuel Gallon (US$)

4.14

2.22

86.1 %

2.87

44.4 %

3.52

2.15

63.7 %

Average Length of Haul (miles)

2,034

2,058

-1.2 %

2,007

1.4 %

2,021

2,062

-2.0 %

Average Stage Length (miles)

1,273

1,279

-0.4 %

1,298

-1.9 %

1,285

1,289

-0.3 %

Departures

29,369

32,676

-10.1 %

27,190

8.0 %

56,559

66,005

-14.3 %

Block Hours

95,315

106,425

-10.4 %

88,474

7.7 %

183,790

216,515

-15.1 %

Average Aircraft Utilization (hours) (2)

11.5

11.2

2.4 %

11.0

5.0 %

11.2

11.4

-1.8 %

Operating Revenues (US$ millions) 

693.4

645.1

7.5 %

571.6

21.3 %

1,265.0

1,317.3

-4.0 %

Operating Profit (Loss) (US$ millions)

42.3

82.6

-48.8 %

44.8

-5.6 %

87.0

195.5

-55.5 %

Operating Margin 

6.1 %

12.8 %

-6.7 p.p.

7.8 %

-1.7 p.p.

6.9 %

14.8 %

-8.0 p.p.

Net Profit (Loss) (US$ millions)

124.1

50.9

143.9 %

19.8

527.9 %

143.8

140.3

2.5 %

Adjusted Net Profit (Loss) (US$ millions) (1)

13.2

50.9

-74.1 %

29.5

-55.3 %

42.7

140.3

-69.6 %

Basic EPS (US$)

3.01

1.20

151.4 %

0.47

540.0 %

3.49

3.30

5.7 %

Adjusted Basic EPS (US$) (1)

0.32

1.20

-73.3 %

0.70

-54.5 %

1.04

3.30

-68.7 %

Shares  for calculation of Basic EPS (000s) 

41,212

42,478

-3.0 %

42,006

-1.9 %

41,212

42,478

-3.0 %










(1) Excludes Special Items. This earnings release includes a reconciliation of non-IFRS financial measures to the comparable IFRS measures.

(2) Average Aircraft Utilization is calculated based on the Company's active fleet, excluding aircraft in storage as well as those classified as assets held for sale

(3) The Company believes that comparisons with 2019 are more relevant than year-over-year comparisons due to the significant impacts in 2020 of the COVID-19 pandemic.

 

FULL 2Q22 EARNINGS RELEASE AVAILABLE FOR DOWNLOAD AT:

https://copa.gcs-web.com/financial-information/quarterly-results

2Q22 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST

Date:

August 4, 2022

Time:

11:00 AM US ET (10:00 AM Local Time)

Join by phone: 

Join by phone

Webcast (listen-only):

Webcast (listen-only)

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 countries in North, Central and South America and the Caribbean. For more information visit: www.copaair.com .

CONTACT: Copa Holdings S.A.
Investor Relations:
Ph: 011 507 304-2774
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 several 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


%

Unaudited


Unaudited


%



2Q22


2Q19


Change

1Q22


Change

YTD22


YTD19


Change

Operating Revenues















Passenger revenue


656,943


620,538


5.9 %

541,255


21.4 %

1,198,198


1,269,328


-5.6 %

Cargo and mail revenue


26,734


16,464


62.4 %

21,537


24.1 %

48,270


31,780


51.9 %

Other operating revenue


9,718


8,100


20.0 %

8,790


10.6 %

18,508


16,163


14.5 %

Total Operating Revenue


693,394


645,102


7.5 %

571,582


21.3 %

1,264,976


1,317,271


-4.0 %
















Operating Expenses















Fuel


295,952


177,169


67.0 %

191,256


54.7 %

487,208


347,332


40.3 %

Wages, salaries, benefits and other employees' expenses


88,995


108,342


-17.9 %

89,759


-0.9 %

178,754


222,004


-19.5 %

Passenger servicing


16,074


25,530


-37.0 %

15,607


3.0 %

31,681


51,101


-38.0 %

Airport facilities and handling charges


47,280


44,698


5.8 %

45,787


3.3 %

93,067


90,060


3.3 %

Sales and distribution


56,222


51,289


9.6 %

46,033


22.1 %

102,255


104,421


-2.1 %

Maintenance, materials and repairs


28,311


31,235


-9.4 %

23,350


21.2 %

51,662


59,282


-12.9 %

Depreciation and amortization


65,337


70,549


-7.4 %

63,303


3.2 %

128,640


138,736


-7.3 %

Flight operations


24,068


25,450


-5.4 %

22,039


9.2 %

46,106


51,325


-10.2 %

Other operating and administrative expenses


28,894


28,240


2.3 %

29,674


-2.6 %

58,568


57,537


1.8 %

Total Operating Expense


651,133


562,502


15.8 %

526,809


23.6 %

1,177,942


1,121,798


5.0 %
















Operating Profit/(Loss)


42,261


82,601


-48.8 %

44,774


-5.6 %

87,035


195,474


-55.5 %
















Non-operating Income (Expense):















Finance cost


(21,270)


(13,573)


56.7 %

(20,445)


4.0 %

(41,715)


(27,583)


51.2 %

Finance income


3,526


6,041


-41.6 %

2,545


38.6 %

6,071


11,995


-49.4 %

Gain (loss) on foreign currency fluctuations


(6,834)


(2,213)


208.8 %

2,917


-334.2 %

(3,916)


(8,173)


-52.1 %

Net change in fair value of derivatives


113,670


-


-100.0 %

(6,752)


-1783.6 %

106,918


-


-100.0 %

Other non-operating income (expense)


(2,717)


(2,115)


28.5 %

(2,664)


2.0 %

(5,381)


(2,940)


83.0 %

Total Non-Operating Income/(Expense)


86,375


(11,859)


-828.3 %

(24,398)


-454.0 %

61,977


(26,700)


-332.1 %
















Profit before taxes


128,636


70,742


81.8 %

20,376


531.3 %

149,012


168,773


-11.7 %
















Income tax expense


(4,560)


(19,876)


-77.1 %

(617)


639.5 %

(5,177)


(28,476)


-81.8 %
















Net Profit/(Loss)


124,076


50,866


143.9 %

19,759


527.9 %

143,835


140,297


2.5 %
















EPS















Basic


3.01


1.20


151.4 %

0.47


540.0 %

3.49


3.30


5.7 %
















Shares used for calculation:















Basic


41,211,540


42,478,415


-3.0 %

42,006,022


-1.9 %

41,211,540


42,478,415


-3.0 %

 

 

Copa Holdings, S. A. and subsidiaries 



Consolidated statement of financial position 



(US$ Thousands)




June 2022

December 2021

 ASSETS 

 (Unaudited)  


Cash and cash equivalents

134,125

211,081

Short-term investments

801,132

806,340

Total cash, cash equivalents and short-term investments

935,257

1,017,421


-

-

Accounts receivable, net

155,322

90,618

Accounts receivable from related parties

1,767

1,832

Expendable parts and supplies, net

88,980

74,778

Prepaid expenses

42,029

31,148

Prepaid income tax

15,832

16,938

Other current assets

8,127

6,054


312,057

221,368

TOTAL CURRENT ASSETS

1,247,314

1,238,789




Long-term investments

140,374

199,670

Long-term prepaid expenses

9,785

6,727

Property and equipment, net

2,755,741

2,512,704

Right of use assets

137,339

166,328

Intangible, net

77,302

81,749

Deferred tax assets

29,874

28,196

Other Non-Current Assets

15,045

14,098

TOTAL NON-CURRENT ASSETS

3,165,461

3,009,472




TOTAL ASSETS

4,412,774

4,248,261




LIABILITIES



Loans and borrowings

148,158

196,602

Current portion of lease liability

75,494

73,917

Accounts payable

142,711

112,596

Accounts payable to related parties

27,400

7,948

Air traffic liability

711,135

557,331

Frequent flyer deferred revenue

100,230

95,114

Taxes Payable

43,650

32,600

Employee benefits obligations

29,933

32,767

Income tax payable

4,993

3,835

Other Current Liabilities

592

786

TOTAL CURRENT LIABILITIES

1,284,295

1,113,496




Loans and borrowings long-term

1,350,239

1,229,031

Lease Liability

72,745

104,734

Net Defined Benefit Liability

7,006

7,670

Derivative financial instruments

161,420

268,338

Deferred tax Liabilities

18,919

18,782

Other long - term liabilities

221,480

206,813

TOTAL NON-CURRENT LIABILITIES

1,831,810

1,835,368




TOTAL LIABILITIES

3,116,105

2,948,864




EQUITY

-

-

Class A - 34,012,213  issued and 28,770,135 outstanding

21,326

21,289

Class B - 10,938,125

7,466

7,466

Additional Paid-In Capital

100,945

98,348

Treasury Stock

(326,239)

(176,902)

Retained Earnings

1,367,868

1,324,022

Net profit

143,835

43,844

Other comprehensive loss

(18,531)

(18,670)




TOTAL EQUITY

1,296,669

1,299,397

TOTAL EQUITY LIABILITIES

4,412,774

4,248,261




 

Copa Holdings, S. A. and subsidiaries 







Consolidated Statement of Cash Flows







For the six months ended June 30







(In US$ thousands)

















2022


2021


2020










(Unaudited)


(Unaudited)


(Unaudited)

Cash flow from (used in) operating activities 


327,833


149,669


(56,632)

Cash flow used in investing activities 


(262,743)


(119,776)


(48,009)

Cash flow (used in) from financing activities 


(142,046)


107,806


253,205

Net (decrease) increase in cash and cash equivalents 


(76,956)


137,699


148,564

Cash and cash equivalents at January 1


211,081


119,065


158,733

Cash and cash equivalents at June 30


$               134,125


$               256,764


$               307,297















Short-term investments 


801,132


925,680


740,887

Long-term investments 


140,374


99,235


95,540

Total cash and cash equivalents and investments at June 30


$            1,075,631


$            1,281,679


$            1,143,724















 

Copa Holdings, S.A.

NON-IFRS FINANCIAL MEASURE RECONCILIATION

This press release includes the following non-IFRS financial measures: Adjusted Operating Profit, Adjusted Net Profit, Adjusted Basic EPS, and Operating CASM Excluding Fuel. 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









and Adjusted Net Profit


2Q22


2Q21


1Q22


2Q19










Operating Profit as Reported


$     42,261


$       8,736


$     44,774


$     82,601

   Subtract: Unredeemed Ticket Revenue provision reversal




$   (10,395)





Adjusted Operating Profit


$     42,261


$     (1,659)


$     44,774


$     82,601










Net Profit as Reported


$   124,076


$     28,073


$     19,759


$     50,866

   Subtract: Unredeemed Ticket Revenue provision reversal




$   (10,395)





   Add: Net change in fair value of derivatives


$ (113,670)


$   (33,898)


$       6,752



   Add: Net change in fair value of financial investments


$       2,761




$       2,979



Adjusted Net Profit


$     13,168


$   (16,220)


$     29,490


$     50,866










Reconciliation of Adjusted Basic EPS


2Q22


2Q21


1Q22


2Q19










Adjusted Net Profit


$     13,168


$   (16,220)


$     29,490


$     50,866

Shares used for calculation of Basic EPS


41,212


42,651


42,006


42,478

Adjusted Basic Earnings per share (Adjusted Basic EPS)


$         0.32


$       (0.38)


$         0.70


$         1.20










Reconciliation of Operating Costs per ASM









Excluding Fuel (CASM Excl. Fuel)


2Q22


2Q21


1Q22


2Q19










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


10.9


9.0


9.4


9.1

Aircraft Fuel Cost per ASM  (in US$ Cents)


5.0


2.5


3.4


2.9

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


6.0


6.6


6.0


6.2










 

Cision View original content:https://www.prnewswire.com/news-releases/copa-holdings-reports-financial-results-for-the-second-quarter-of-2022-301599385.html

SOURCE Copa Holdings, S.A.