08.11.2017 22:45:00

Copa Holdings Reports Net Income of $103.8 million and EPS of $2.45 for the Third Quarter of 2017

PANAMA CITY, Nov. 8, 2017 /PRNewswire/ -- Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the third quarter of 2017 (3Q17). 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 third quarter of 2016 (3Q16).

OPERATING AND FINANCIAL HIGHLIGHTS

  • Copa Holdings reported net income of US$103.8 million for 3Q17 or earnings per share (EPS) of US$2.45, compared to net income of US$74.0 million or earnings per share of US$1.75 in 3Q16.
  • Excluding special items, the Company would have reported an adjusted net income of US$100.8 million, or adjusted EPS of US$2.38, compared to an adjusted net income of US$55.3 million or adjusted EPS of US$1.30 in 3Q16.  Special items include a non-cash gain of US$2.9 million in 3Q17 and US$19.2 million in 3Q16 related to the mark-to-market of fuel hedge contracts.
  • Operating income for 3Q17 came in at US$119.1 million, representing a 56% increase over operating income of US$76.4 million in 3Q16, as a result of 13% additional capacity, a 2.4% increase in unit revenue per available seat mile (RASM), and a 3.2% decrease in unit costs.  Operating margin for 3Q17 came in at 18.1%, compared to an operating margin of 13.4% in 3Q16.   
  • Total revenues for 3Q17 increased 15.6% to US$657.2 million.  Yield per passenger mile increased 1.3% to 12.0 cents and RASM came in at 10.6 cents, 2.4% above 3Q16. 
  • For 3Q17, consolidated passenger traffic grew 14.9% while consolidated capacity grew 13.0%. As a result, consolidated load factor for the quarter increased 1.5 percentage points to 85.7%. 
  • Operating cost per available seat mile (CASM) decreased 3.2%, from 8.9 cents in 3Q16 to 8.6 cents in 3Q17.  CASM excluding fuel costs decreased 1.2%, from 6.4 in 3Q16 to 6.3 cents 3Q17.
  • Cash, short-term and long-term investments ended 3Q17 at US$971.5 million, representing 40% of the last twelve months' revenues.
  • Copa Airlines faced several operational challenges during the quarter, including severe weather, natural disasters and other external factors that affected the company´s financial results for the quarter and the operation of its hub in Panama City.  These events caused many flight cancelations and delays; as a result, the airline´s Completion Factor and On-Time Performance came in lower than usual, at 98.5% and 82.9%, respectively.

Subsequent Events  

  • Copa Holdings will pay its fourth quarter dividend of US$0.75 per share, on December 15, 2017, on all outstanding Class A and Class B shares, to stockholders of record as of November 30, 2017.

   










Consolidated Financial
& Operating Highlights

3Q17

3Q16

Variance vs. 3Q16

2Q17

Variance vs. 2Q17



Revenue Passengers Carried ('000)

2,518

2,231

12.9%

2,262

11.3%



RPMs (mm) 

5,330

4,637

14.9%

4,766

11.8%



ASMs (mm) 

6,221

5,506

13.0%

5,796

7.3%



Load Factor 

85.7%

84.2%

1.5 p.p.

82.2%

3.4 p.p.



Yield

12.0

11.9

1.3%

11.8

2.1%



PRASM (US$ Cents) 

10.3

10.0

3.1%

9.7

6.4%



RASM (US$ Cents) 

10.6

10.3

2.4%

10.0

5.9%



CASM (US$ Cents) 

8.6

8.9

-3.2%

8.5

1.2%



CASM Excl. Fuel (US$ Cents) 

6.3

6.4

-1.2%

6.3

0.3%



Fuel Gallons Consumed (Millions) 

80.0

70.9

12.8%

74.1

7.9%



Avg. Price Per Fuel Gallon (US$ Dollars)

1.82

1.98

-8.0%

1.77

3.3%



Average Length of Haul (Miles)

2,117

2,079

1.8%

2,107

0.5%



Average Stage Length (Miles)

1,300

1,192

9.1%

1,259

3.2%



Departures

32,593

30,737

6.0%

31,092

4.8%



Block Hours

108,930

97,077

12.2%

102,435

6.3%



Average Aircraft Utilization (Hours)

11.7

10.5

11.7%

11.2

4.6%



Operating Revenues (US$ mm) 

657.2

568.3

15.6%

578.1

13.7%



Operating Income (US$ mm)

119.1

76.4

55.9%

83.0

43.6%



Operating Margin 

18.1%

13.4%

4.7 p.p.

14.4%

3.7 p.p.



Net Income (US$ mm)

103.8

74.0

40.2%

63.0

64.8%



Adjusted Net Income (US$ mm) (1)

100.8

55.3

82.4%

62.8

60.6%



EPS - Basic and Diluted (US$)

2.45

1.75

40.0%

1.49

64.7%



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

2.38

1.30

82.2%

1.48

60.5%



# of Shares - Basic and Diluted ('000) 

42,430

42,374

0.1%

42,419

0.0%











 (1) Adjusted Net Income and Adjusted EPS for 3Q17, 3Q16 and 2Q17 exclude non-cash charges/gains associated with the mark-to-market of fuel hedges and 3Q16 also excludes the impact of the Venezuelan currency devaluations.



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










FULL 3Q17 EARNINGS RELEASE AVAILABLE FOR DOWNLOAD AT: http://investor.shareholder.com/copa/results.cfm

3Q17 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST

Date:

Nov 9, 2017



Time:

11:00 AM 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 75 destinations in 31 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: 80 Boeing 737NG aircraft and 21 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 subject to change without prior notice

CPA-G

 


Copa Holdings, S.A.



Income Statement - IFRS


(US$ Thousands)
















Unaudited


Unaudited


%


Unaudited


%




3Q17


3Q16*


Change


2Q17


Change


Operating Revenues












Passenger revenue


641,244


550,524


16.5%


561,696


14.2%


Cargo and mail revenue


13,600


13,390


1.6%


13,994


-2.8%


Other operating revenue


2,325


4,372


-46.8%


2,398


-3.0%


Total Operating Revenue


657,169


568,286


15.6%


578,087


13.7%














Operating Expenses












Fuel


145,968


140,567


3.8%


130,878


11.5%


Wages, salaries, benefits and other employees' expenses


103,775


92,039


12.8%


99,603


4.2%


Passenger servicing


27,008


21,998


22.8%


22,883


18.0%


Airport facilities and handling charges


45,222


40,705


11.1%


42,614


6.1%


Sales and distribution


50,157


47,813


4.9%


48,942


2.5%


Maintenance, materials and repairs


39,777


32,514


22.3%


27,404


45.2%


Depreciation and amortization


41,847


35,525


17.8%


40,572


3.1%


Flight operations


26,535


23,190


14.4%


25,999


2.1%


Aircraft rentals and other rentals


33,382


34,454


-3.1%


33,614


-0.7%


Cargo and courier expenses


1,801


1,565


15.0%


1,892


-4.8%


Other operating and administrative expenses


22,569


21,494


5.0%


20,727


8.9%


Total Operating Expense


538,041


491,865


9.4%


495,127


8.7%














Operating Profit


119,128


76,421


55.9%


82,960


43.6%














Non-operating Income (Expense):












Finance cost


(8,639)


(9,682)


-10.8%


(8,938)


-3.3%


Finance income


4,801


3,505


36.9%


4,249


13.0%


Gain (loss) on foreign currency fluctuations


593


(352)


n/m


(2,858)


-120.7%


Net change in fair value of derivatives


2,946


19,225


-84.7%


175


n/m


Other non-operating (income) expense


(616)


(2,445)


-74.8%


(190)


224.7%


Total Non-Operating Income/(Expense)


(916)


10,251


-108.9%


(7,561)


-87.9%














Profit before taxes


118,212


86,672


36.4%


75,399


56.8%














Income tax expense


14,416


12,654


13.9%


12,401


16.2%














Net Profit


103,796


74,018


40.2%


62,997


64.8%


























EPS - Basic and Diluted


2.45


1.75


40.0%


1.49


64.7%


Shares - Basic and Diluted


42,429,841


42,374,430


0.1%


42,419,150


0.0%














* During 2017, the Company implemented a business, planning and financial consolidation system, which resulted in a new classification of the chart of accounts.  Prior periods have been reclassified for ease of comparison.

 




Copa Holdings, S. A. and subsidiaries 



Balance Sheet - IFRS



(US$ Thousands)

September 30

December 31


2017

2016


 (Unaudited) 

 Audited 




 ASSETS 






 Current Assets 



Cash and cash equivalents

249,593

331,687

Restricted cash and cash equivalents

-

-

Short-term investments

565,994

483,002

Total cash, cash equivalents and short-term investments

815,587

814,689




Accounts receivable, net

141,173

113,408

Accounts receivable from related parties

391

499

Expendable parts and supplies, net

78,952

74,502

Prepaid expenses

40,540

58,370

Other current assets

8,487

7,650

TOTAL CURRENT ASSETS

1,085,130

1,069,118




Long-term investments

155,953

953

Long-term accounts receivable

2,267

1,957

Long-term prepaid expenses

29,102

26,398

Property and equipment, net

2,780,271

2,623,682

Intangible, net

77,275

69,502

Net pension asset

4,495

8,826

Deferred tax assets

17,225

18,339

Other Non-Current Assets

31,592

27,064

TOTAL NON-CURRENT ASSETS

3,098,180

2,776,721




TOTAL ASSETS

4,183,310

3,845,839




 LIABILITIES AND EQUITY 






 Current Liabilities: 



Current maturities of long-term debt

261,167

222,718

Accounts payable

109,732

104,590

Accounts payable to related parties

11,432

8,680

Air traffic liability

469,478

395,580

Frequent flyer deferred revenue

42,977

35,368

Taxes and interest payable

93,337

68,483

Employee benefits obligations

42,991

41,707

Income tax payable

2,845

1,401

Other Current Liabilities

2,045

4,385

TOTAL CURRENT LIABILITIES

1,036,004

882,912




Long-term debt

918,642

961,414

Other long - term liabilities

132,529

114,268

Deferred tax Liabilities

53,493

44,974

TOTAL NON-CURRENT LIABILITIES

1,104,664

1,120,656




TOTAL LIABILITIES

2,140,668

2,003,568




 EQUITY 



Issued Capital



Class A - 33,778,404 issued and 31,185,641 outstanding

21,030

20,988

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

7,466

7,466

Additional Paid-In Capital

71,123

64,986

Treasury Stock

(136,388)

(136,388)

Retained Earnings

1,812,092

1,552,547

Net Income

269,178

334,544

Other Comprehensive Income

(1,859)

(1,872)

TOTAL EQUITY

2,042,642

1,842,271




TOTAL LIABILITIES AND EQUITY

4,183,310

3,845,839




* During 2017, the Company implemented a business, planning and financial consolidation system, which resulted in a new classification of the chart of accounts.  Prior periods have been reclassified for ease of comparison.

 


Copa Holdings, S. A. and subsidiaries 















Consolidated Statement of Cash Flows















For the nine months ended September 30, 















(In US$ thousands)
























2017


2016


2015











(Unaudited)


(Unaudited)


(Unaudited)


Cash flow from operating activities 









522,527


384,822


236,743


Cash flow used in investing activities 









(344,088)


(170,057)


(39,658)


Cash flow used in financing activities 









(260,533)


(197,677)


(282,982)


Net (decrease) increase in cash and cash equivalents 









(82,094)


17,088


(85,897)


Cash and cash equivalents at January 1









331,687


204,715


207,437


Cash and cash equivalents at September 30









$    249,593


$    221,803


$    121,540

















Short-term investments









565,994


540,502


484,242


Long-term investments *









155,953


954


428,259


Restricted cash and cash equivalents **









-


10,128


48,702


Total cash and cash equivalents and investments at September 30









$    971,540


$    773,387


$ 1,082,743

















* Long-term investments include $427 million at September 2015 of cash in Venezuela.


** Restricted cash corresponds to a 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


3Q17


3Q16


2Q17










Net profit as Reported


$103,796


$74,018


$62,997










Special Items (adjustments):








Gain (loss) due to devaluation of Venezuelan Bolivar




(484)




Net change in fair value of derivatives


2,946


19,225


175


Adjusted Net Income


$100,850


$55,278


$62,822










Shares used for Computation (in thousands)








     Basic and Diluted


42,430


42,374


42,419










Adjusted earnings per share - Basic and Diluted


2.38


1.30


1.48










Reconciliation of Operating Costs per ASM








Excluding Fuel (CASM Excl. Fuel)


3Q17


3Q16


2Q17










Operating Costs per ASM as Reported


8.6


8.9


8.5


Aircraft fuel per ASM


(2.3)


(2.6)


(2.3)


Operating Costs per ASM excluding fuel 


6.3


6.4


6.3









 

View original content:http://www.prnewswire.com/news-releases/copa-holdings-reports-net-income-of-1038-million-and-eps-of-245-for-the-third-quarter-of-2017-300552270.html

SOURCE Copa Holdings, S.A.

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