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05.08.2020 23:01:00
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Copa Holdings Reports Financial Results for the Second Quarter of 2020
PANAMA CITY, Aug. 5, 2020 /PRNewswire/ -- Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the second quarter of 2020 (2Q20). 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).
Due to air travel restrictions implemented in response to the Covid-19 outbreak, the Company did not provide scheduled commercial service during the second quarter, and only operated a small number of charter and humanitarian flights, representing less than 1% of the Company´s capacity in 2Q19. Therefore, this earnings release will focus on the financial results and metrics that are relevant in these circumstances and will omit certain financial ratios, unit metrics and operational indicators that are usually provided, since these are either not measurable or applicable on such a limited operational base.
OPERATING AND FINANCIAL HIGHLIGHTS
- Copa Holdings reported a net loss of US$386.0 million or (US$9.08) per share. Excluding special items, the Company would have reported a net loss of US$114.6 million, or (US$2.70) per share.
- Special items for the quarter include a US$186.8 million non-cash impairment charge on the B737-700 fleet as a result of the Company´s announcement to sell those aircraft, a US$50.0 million loss expected on assets held for sale (Embraer aircraft, spare engines, spare parts and a simulator), a US$22.2 million unrealized loss on the mark-to-market of the convertible notes, and a US$12.3 million reversal for unredeemed tickets revenue provisions recorded in the first quarter, given the uncertainty of future passenger behavior due to the Covid-19 situation.
- Copa Holdings reported an operating loss of US$357.9 million. Excluding special items, the Company would have reported an operating loss of US$108.7 million.
- Cash burn, defined as the cash disbursements less proceeds excluding extraordinary financing activities, averaged US$77 million per month during the quarter.
- In April, the Company raised US$343 million in cash through a senior convertible note offering. Cash, short-term and long-term investments totaled US$1.14 billion at the end of the quarter.
- The Company entered into new committed, unsecured credit facilities of an additional US$150 million (currently undrawn) and closed the quarter with US$1.29 billion of available liquidity.
- The Company repaid US$95 million in short-term lines of credit, closing the quarter with a total debt of US$1.3 billion.
- Copa Holdings ended the quarter with a consolidated fleet of 102 aircraft – 6 Boeing 737MAX9s, 68 Boeing 737-800s, 14 Boeing 737-700s, and 14 Embraer-190s.
Subsequent Events
- During the month of July, the Company closed a secured revolving credit facility for an initial aggregate amount of US$105 million. Including this facility, the Company now has US$255 million in unutilized committed credit facilities.
- On July 17th, due to the Covid-19 pandemic, the Panamanian government announced the extension of air travel restrictions until August 21st, 2020. The company has now scheduled the restart of its regular commercial flights for September 4th, 2020.
- On July 31st, the Company signed a US$79.1 million contract for the sale of its remaining 14 EMB-190s, 6 spare engines and spare parts, and expects to deliver these assets over the next 12 months.
Consolidated Financial 2Q20 2Q19 Variance vs. 2Q19 1Q20 Variance vs. 1Q20 Revenue Passengers Carried (000s) 9 2,550 -99.6% 2,118 -99.6% RPMs (millions) 15 5,249 -99.7% 4,473 -99.7% ASMs (millions) 31 6,166 -99.5% 5,491 -99.4% Departures 225 32,676 -99.3% 28,286 -99.2% Block Hours 820 106,425 -99.2% 93,568 -99.1% Operating Revenues (US$ millions) 14.5 645.1 -97.7% 595.5 -97.6% Operating Profit (Loss) (US$ millions) -357.9 82.6 n/m 98.7 n/m Adjusted Operating Profit (Loss) (US$ millions) (1) -108.7 82.6 n/m 98.7 n/m Net Profit (Loss) (US$ millions) -386.0 50.9 n/m 74.3 n/m Adjusted Net Profit (Loss) (US$ millions) (1) -114.6 50.9 n/m 74.3 n/m Basic EPS (US$) -9.08 1.20 n/m 1.75 n/m Adjusted Basic EPS (US$) (1) -2.70 1.20 n/m 1.75 n/m Shares for calculation of Basic EPS (000s) 42,512 42,478 0.1% 42,501 0.0%
& Operating Highlights
financial measures to the comparable IFRS measures.
FULL 2Q20 EARNINGS RELEASE AVAILABLE FOR DOWNLOAD AT:
https://copa.gcs-web.com/financial-information/quarterly-results
2Q20 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST
Date: | Aug 6, 2020 | ||
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 33 countries in North, Central and South America and the Caribbean. 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 | Audited | % | Unaudited | % | ||||||
2Q20 | 2Q19 | Change | 1Q20 | Change | ||||||
Operating Revenues | ||||||||||
Passenger revenue | 10,790 | 620,538 | -98.3% | 574,650 | -98.1% | |||||
Cargo and mail revenue | 145 | 16,464 | -99.1% | 13,017 | -98.9% | |||||
Other operating revenue | 3,597 | 8,100 | -55.6% | 7,785 | -53.8% | |||||
Total Operating Revenue | 14,532 | 645,102 | -97.7% | 595,453 | -97.6% | |||||
Operating Expenses | ||||||||||
Fuel | 137 | 177,169 | -99.9% | 136,954 | -99.9% | |||||
Wages, salaries, benefits and other employees' expenses | 38,198 | 108,342 | -64.7% | 110,289 | -65.4% | |||||
Passenger servicing | 402 | 25,530 | -98.4% | 21,890 | -98.2% | |||||
Airport facilities and handling charges | 505 | 44,698 | -98.9% | 40,365 | -98.7% | |||||
Sales and distribution | 3,754 | 51,289 | -92.7% | 42,011 | -91.1% | |||||
Maintenance, materials and repairs | 7,505 | 31,235 | -76.0% | 27,144 | -72.4% | |||||
Depreciation and amortization | 305,185 | 70,549 | 332.6% | 66,375 | 359.8% | |||||
Flight operations | (82) | 25,450 | n/m | 23,731 | n/m | |||||
Other operating and administrative expenses | 16,803 | 28,240 | -40.5% | 28,008 | -40.0% | |||||
Total Operating Expense | 372,408 | 562,502 | -33.8% | 496,766 | -25.0% | |||||
Operating Profit (Loss) | (357,875) | 82,601 | n/m | 98,687 | n/m | |||||
Non-operating Income (Expense): | ||||||||||
Finance cost | (27,056) | (13,573) | 99.3% | (11,085) | 144.1% | |||||
Finance income | 5,677 | 6,041 | -6.0% | 6,320 | -10.2% | |||||
Net change in fair value of derivatives | (22,198) | - | n/m | - | n/m | |||||
Gain (loss) on foreign currency fluctuations | 500 | (2,213) | n/m | (10,950) | n/m | |||||
Other non-operating income (expense) | 447 | (2,115) | n/m | (11) | n/m | |||||
Total Non-Operating Income/(Expense) | (42,628) | (11,859) | 259.5% | (15,726) | 171.1% | |||||
Profit (Loss) before taxes | (400,504) | 70,742 | n/m | 82,961 | n/m | |||||
Income tax expense | (14,486) | 19,876 | n/m | 8,687 | n/m | |||||
Net Profit (Loss) | (386,018) | 50,866 | n/m | 74,273 | n/m | |||||
EPS | ||||||||||
Basic | -9.08 | 1.20 | n/m | 1.75 | n/m | |||||
Shares used for calculation: | ||||||||||
Basic | 42,511,806 | 42,478,415 | 42,501,338 |
Copa Holdings, S. A. and subsidiaries | ||
Consolidated statement of financial position | ||
(US$ Thousands) | June | December |
2020 | 2019 | |
(Unaudited) | ||
ASSETS | ||
Current Assets | ||
Cash and cash equivalents | 307,297 | 158,733 |
Short-term investments | 740,887 | 692,403 |
Total cash, cash equivalents and short-term investments | 1,048,184 | 851,136 |
Accounts receivable, net | 28,843 | 129,634 |
Accounts receivable from related parties | 1,302 | 147 |
Expendable parts and supplies, net | 76,577 | 69,100 |
Prepaid expenses | 32,326 | 49,034 |
Prepaid income tax | 2,387 | 1,181 |
Other current assets | 10,927 | 14,206 |
152,364 | 263,301 | |
Assets held for sale | 144,836 | 120,006 |
TOTAL CURRENT ASSETS | 1,345,384 | 1,234,442 |
Long-term investments | 94,540 | 134,347 |
Long-term accounts receivable | 1,038 | 2,139 |
Long-term prepaid expenses | 16,277 | 17,743 |
Property and equipment, net | 2,227,313 | 2,532,402 |
Right of use assets | 257,512 | 290,843 |
Intangible, net | 104,485 | 108,116 |
Net pension asset | 3,188 | 249 |
Deferred tax assets | 21,461 | 19,216 |
Other Non-Current Assets | 15,002 | 17,881 |
TOTAL NON-CURRENT ASSETS | 2,740,816 | 3,122,935 |
TOTAL ASSETS | 4,086,199 | 4,357,377 |
Loans and borrowings | 177,004 | 122,581 |
Current portion of lease liability | 95,087 | 97,732 |
Accounts payable | 45,335 | 119,332 |
Accounts payable to related parties | 1,070 | 14,086 |
Air traffic liability | 409,843 | 497,374 |
Frequent flyer deferred revenue | 85,923 | 80,325 |
Taxes Payable | 1,476 | 46,267 |
Employee benefits obligations | 11,015 | 55,373 |
Income tax payable | 3,159 | 9,683 |
Other Current Liabilities | 174 | 83 |
TOTAL CURRENT LIABILITIES | 830,087 | 1,042,836 |
Loans and borrowings | 1,148,253 | 938,182 |
Lease Liability | 175,403 | 206,832 |
Derivative financial instruments | 98,427 | - |
Other long - term liabilities | 214,746 | 191,221 |
Deferred tax Liabilities | 27,520 | 43,397 |
TOTAL NON-CURRENT LIABILITIES | 1,664,350 | 1,379,633 |
TOTAL LIABILITIES | 2,494,436 | 2,422,469 |
EQUITY | ||
Issued Capital | ||
Class A -33,859,791 issued and 31,405,999 outstanding | 21,188 | 21,142 |
Class B common stock - 10,938,125 | 7,466 | 7,466 |
Additional Paid-In Capital | 88,683 | 86,135 |
Treasury Stock | (136,388) | (136,388) |
Retained Earnings | 1,931,191 | 1,718,179 |
Net (loss) profit | (311,744) | 247,002 |
Other comprehensive loss | (8,632) | (8,628) |
TOTAL EQUITY | 1,591,763 | 1,934,908 |
TOTAL EQUITY LIABILITIES | 4,086,199 | 4,357,377 |
Copa Holdings, S. A. and subsidiaries | ||||||||||||||
Consolidated Statement of Cash Flows | ||||||||||||||
For the six months ended June 30, | ||||||||||||||
(In US$ thousands) | ||||||||||||||
2020 | 2019 | 2018 | ||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||
Cash flow (used in) from operating activities | (56,632) | 331,143 | 267,114 | |||||||||||
Cash flow used in investing activities | (48,009) | (8,691) | (105,907) | |||||||||||
Cash flow from (used in) financing activities | 253,205 | (252,469) | (228,840) | |||||||||||
Net increase (decrease) in cash and cash equivalents | 148,564 | 69,982 | (67,633) | |||||||||||
Cash and cash equivalents at January 1 | 158,733 | 156,158 | 238,792 | |||||||||||
Cash and cash equivalents at June 30 | $ 307,297 | $ 226,140 | $ 171,159 | |||||||||||
Short-term investments | 740,887 | 523,134 | 604,869 | |||||||||||
Long-term investments | 94,540 | 144,072 | 171,356 | |||||||||||
Total cash and cash equivalents and investments at June 30 | $ 1,142,724 | $ 893,346 | $ 947,384 | |||||||||||
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 Monthly Cash Burn. 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 | 2Q20 | 2Q19 | 1Q20 | |||
Operating Profit as Reported | $ (357,875) | $ 82,601 | $ 98,687 | |||
Add: Unredeemed Ticket Revenue provision reversal | $ 12,341 | |||||
Add: Fleet Impairment loss | $ 186,807 | |||||
Add: Expected Loss on Embraer assets held for sale | $ 50,048 | |||||
Adjusted Operating Profit | $ (108,679) | $ 82,601 | $ 98,687 | |||
Net profit as Reported | $ (386,018) | $ 50,866 | $ 74,273 | |||
Add: Unredeemed Ticket Revenue provision reversal | $ 12,341 | |||||
Add: Fleet Impairment loss | $ 186,807 | |||||
Add: Expected Loss on Embraer assets held for sale | $ 50,048 | |||||
Add: Net change in fair value of derivatives | $ 22,198 | |||||
Adjusted Net Profit | $ (114,624) | $ 50,866 | $ 74,273 | |||
Reconciliation of Adjusted Basic EPS | ||||||
Adjusted Net Profit | $ (114,624) | $ 50,866 | $ 74,273 | |||
Shares used for calculation of Basic EPS | 42,512 | 42,478 | 42,501 | |||
Adjusted Basic Earnings per share (Adjusted Basic EPS) | $ (2.70) | $ 1.20 | $ 1.75 | |||
Reconciliation of Monthly Cash Burn for 2Q20 | ||||||
Cash balance as reported on 1Q20 | 1,127 | |||||
Cash balance as reported on 2Q20 | 1,143 | |||||
Net cashflows in 2Q | 16 | |||||
Substract: Proceeds from Convertible Notes Offering | 343 | |||||
Add: Repayment of short term credit lines | 95 | |||||
Cash Burn for 2Q20 excluding extraordinary financing activities | (232) | |||||
Monthly Cash Burn for 2Q20 excluding extraordinary financing activities | (77) |
CONTACT: | Raúl Pascual – Panamá |
Director – Investor Relations | |
011 (507) 304-2774 |
View original content:http://www.prnewswire.com/news-releases/copa-holdings-reports-financial-results-for-the-second-quarter-of-2020-301107106.html
SOURCE Copa Holdings, S.A.
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