PANAMA CITY, Aug. 9, 2023 /PRNewswire/ — Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the second quarter of 2023 (2Q23). 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 2022 (2Q22).
OPERATING AND FINANCIAL HIGHLIGHTS
Copa Holdings reported a net profit of US$17.5 million for 2Q23 or US$0.44 per share. Excluding special items comprised of the unrealized mark-to-market net loss of US$137.0 million related to the Company’s convertible notes, as well as changes in the value of financial investments, the Company would have reported a net profit of US$154.5 million or US$3.92 per share.
Copa Holdings reported an operating profit of US$194.7 million and a 24.1% operating margin for the quarter, as compared to an operating profit of US$42.3 million and an operating margin of 6.1% in 2Q22.
Passenger traffic, measured in terms of revenue passenger miles (RPMs), increased by 15.4% year over year, while capacity (available seat miles or ASMs) increased by 13.6%. As a result, the load factor for the quarter increased by 1.3 percentage points to 86.1%, as compared to 2Q22.
Total revenues for 2Q23 increased 16.7% to US$809.2 million, mainly driven by higher capacity, while yields increased 2.0% to 13.3 cents. Revenue per available seat mile (RASM) increased 2.7% to 12.0 cents, as compared to 2Q22.
Operating cost per available seat mile (CASM) decreased 17.0% from 10.9 cents in 2Q22 to 9.1 cents in 2Q23, mainly driven by a decrease of 35.9% in the price of jet fuel per gallon. CASM excluding fuel (Ex-fuel CASM) decreased by 0.8% in the quarter to 5.9 cents, when compared to 2Q22.
The Company ended the quarter with approximately US$1.3 billion in cash, short-term and long-term investments, which represent 39.6% of the last twelve months’ revenues.
The Company closed the quarter with total debt, including lease liabilities, of US$1.8 billion, while our Adjusted Net Debt to EBITDA ratio ended at 0.5 times.
During the quarter, the Company announced that it will start service to Barquisimeto, Venezuela, bringing the total number of destinations in its network to 81. This new route is scheduled to start in October of 2023.
During the quarter, the Company took delivery of two Boeing 737 MAX 9 aircraft, ending the quarter with a consolidated fleet of 101 aircraft – 67 Boeing 737-800s, 24 Boeing 737 MAX 9s, 9 Boeing 737-700s, and 1 Boeing 737-800 freighter.
Copa Airlines had an on-time performance for the quarter of 91.6% and a flight completion factor of 99.8%, once again positioning itself among the very best in the industry.
Subsequent Events
In July, the Company took delivery of one Boeing 737 MAX 9 and expects to receive five additional aircraft during the remainder of 2023. The Company expects to end the year with 107 aircraft.
On July 14, 2023, Copa Holdings publicly announced the redemption of all its outstanding 4.50% Convertible Senior Notes due in 2025, which will be completed on September 18, 2023. Notes surrendered for conversion will be settled through a combination of cash (up to the principal amount of US$350 million) and shares of Copa common stock, the latter to cover the remainder of the conversion obligation.
In July, Copa Airlines was recognized by Skytrax – for the eighth consecutive year – as the “Best Airline in Central America and the Caribbean”.
Copa Holdings will make its third dividend payment of the year of US$0.82 per share on October 13, 2023, to all Class A and Class B shareholders on record as of September 29, 2023.
|
Consolidated Financial |
2Q23 |
2Q22 |
Variance vs. 1Q19 |
1Q23 |
Variance vs. 1Q23 |
YTD23 |
YTD22 |
Variance vs. YTD22 |
|
Revenue Passengers Carried (000s) |
2,980 |
2,481 |
20.1 % |
2,881 |
3.4 % |
5,860 |
4,765 |
23.0 % |
|
Revenue Passengers OnBoard (000s) |
4,469 |
3,796 |
17.7 % |
4,295 |
4.0 % |
8,764 |
7,272 |
20.5 % |
|
RPMs (millions) |
5,826 |
5,047 |
15.4 % |
5,723 |
1.8 % |
11,550 |
9,632 |
19.9 % |
|
ASMs (millions) |
6,767 |
5,955 |
13.6 % |
6,596 |
2.6 % |
13,363 |
11,578 |
15.4 % |
|
Load Factor |
86.1 % |
84.8 % |
1.3 p.p. |
86.8 % |
-0.7 p.p. |
86.4 % |
83.2 % |
3.2 p.p. |
|
Yield (US$ Cents) |
13.3 |
13.0 |
2.0 % |
14.6 |
-8.9 % |
13.9 |
12.4 |
11.9 % |
|
PRASM (US$ Cents) |
11.4 |
11.0 |
3.6 % |
12.6 |
-9.6 % |
12.0 |
10.3 |
16.3 % |
|
RASM (US$ Cents) |
12.0 |
11.6 |
2.7 % |
13.1 |
-9.1 % |
12.5 |
10.9 |
14.8 % |
|
CASM (US$ Cents) |
9.1 |
10.9 |
-17.0 % |
10.2 |
-11.1 % |
9.6 |
10.2 |
-5.2 % |
|
CASM Excl. Fuel (US$ Cents) |
5.9 |
6.0 |
-0.8 % |
6.2 |
-4.5 % |
6.1 |
6.0 |
1.5 % |
|
Fuel Gallons Consumed (millions) |
79.9 |
71.5 |
11.8 % |
78.2 |
2.2 % |
158.1 |
138.0 |
14.5 % |
|
Avg. Price Per Fuel Gallon (US$) |
2.65 |
4.14 |
-35.9 % |
3.36 |
-21.1 % |
3.00 |
3.52 |
-14.8 % |
|
Average Length of Haul (miles) |
1,955 |
2,034 |
-3.9 % |
1,987 |
-1.6 % |
1,971 |
2,021 |
-2.5 % |
|
Average Stage Length (miles) |
1,260 |
1,273 |
-1.1 % |
1,281 |
-1.7 % |
1,270 |
1,285 |
-1.2 % |
|
Departures |
33,385 |
29,369 |
13.7 % |
31,984 |
4.4 % |
65,369 |
56,559 |
15.6 % |
|
Block Hours |
107,055 |
95,315 |
12.3 % |
104,626 |
2.3 % |
211,681 |
183,790 |
15.2 % |
|
Average Aircraft Utilization (hours) |
11.8 |
11.2 |
5.4 % |
11.9 |
-0.8 % |
11.8 |
10.9 |
8.5 % |
|
Operating Revenues (US$ millions) |
809.2 |
693.4 |
16.7 % |
867.3 |
-6.7 % |
1,676.5 |
1,265.0 |
32.5 % |
|
Operating Profit (Loss) (US$ millions) |
194.7 |
42.3 |
360.6 % |
193.2 |
0.8 % |
387.9 |
87.0 |
345.7 % |
|
Operating Margin |
24.1 % |
6.1 % |
18.0 p.p. |
22.3 % |
1.8 p.p. |
23.1 % |
6.9 % |
16.3 p.p. |
|
Net Profit (Loss) (US$ millions) |
17.5 |
124.1 |
-85.9 % |
121.5 |
-85.6 % |
139.0 |
143.8 |
-3.3 % |
|
Adjusted Net Profit (Loss) (US$ millions) (1) |
154.5 |
13.2 |
1073.1 % |
157.8 |
-2.1 % |
312.3 |
42.7 |
632.0 % |
|
Basic EPS (US$) |
0.44 |
3.01 |
-85.3 % |
3.07 |
-85.5 % |
3.52 |
3.49 |
1.0 % |
|
Adjusted Basic EPS (US$) (1) |
3.92 |
0.32 |
1125.7 % |
3.99 |
-1.8 % |
7.92 |
1.04 |
664.9 % |
|
Shares for calculation of Basic EPS (000s) |
39,442 |
41,212 |
-4.3 % |
39,565 |
-0.3 % |
39,442 |
41,212 |
-4.3 % |
|
(1) Excludes Special Items. This earnings release includes a reconciliation of non-IFRS financial measures to the comparable |
||||||||
FULL 2Q23 EARNINGS RELEASE AVAILABLE FOR DOWNLOAD AT:
https://copa.gcs-web.com/financial-information/quarterly-results
2Q23 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST
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 |
% |
|||||||
|
2Q23 |
2Q22 |
Change |
1Q23 |
Change |
YTD23 |
YTD22 |
Change |
|||||||
|
Operating Revenues |
||||||||||||||
|
Passenger revenue |
773,781 |
656,943 |
17.8 % |
834,018 |
-7.2 % |
1,607,798 |
1,198,198 |
34.2 % |
||||||
|
Cargo and mail revenue |
23,888 |
26,734 |
-10.6 % |
23,252 |
2.7 % |
47,140 |
48,270 |
-2.3 % |
||||||
|
Other operating revenue |
11,521 |
9,718 |
18.6 % |
9,995 |
15.3 % |
21,516 |
18,508 |
16.3 % |
||||||
|
Total Operating Revenue |
809,190 |
693,394 |
16.7 % |
867,264 |
-6.7 % |
1,676,454 |
1,264,976 |
32.5 % |
||||||
|
Operating Expenses |
||||||||||||||
|
Fuel |
214,121 |
295,952 |
-27.7 % |
265,498 |
-19.4 % |
479,619 |
487,208 |
-1.6 % |
||||||
|
Wages, salaries, benefits and other employees’ expenses |
105,788 |
88,995 |
18.9 % |
102,652 |
3.1 % |
208,441 |
178,754 |
16.6 % |
||||||
|
Passenger servicing |
21,460 |
16,074 |
33.5 % |
20,391 |
5.2 % |
41,852 |
31,681 |
32.1 % |
||||||
|
Airport facilities and handling charges |
54,146 |
47,280 |
14.5 % |
50,479 |
7.3 % |
104,625 |
93,067 |
12.4 % |
||||||
|
Sales and distribution |
56,596 |
56,222 |
0.7 % |
61,406 |
-7.8 % |
118,002 |
102,255 |
15.4 % |
||||||
|
Maintenance, materials and repairs |
31,430 |
28,311 |
11.0 % |
40,296 |
-22.0 % |
71,726 |
51,662 |
38.8 % |
||||||
|
Depreciation and amortization |
74,818 |
65,337 |
14.5 % |
72,677 |
2.9 % |
147,494 |
128,640 |
14.7 % |
||||||
|
Flight operations |
25,005 |
24,068 |
3.9 % |
27,424 |
-8.8 % |
52,429 |
46,106 |
13.7 % |
||||||
|
Other operating and administrative expenses |
31,158 |
28,894 |
7.8 % |
33,228 |
-6.2 % |
64,387 |
58,568 |
9.9 % |
||||||
|
Total Operating Expense |
614,523 |
651,133 |
-5.6 % |
674,053 |
-8.8 % |
1,288,576 |
1,177,942 |
9.4 % |
||||||
|
Operating Profit/(Loss) |
194,667 |
42,261 |
360.6 % |
193,212 |
0.8 % |
387,878 |
87,035 |
345.7 % |
||||||
|
Non-operating Income (Expense): |
||||||||||||||
|
Finance cost |
(30,517) |
(21,270) |
43.5 % |
(24,365) |
25.2 % |
(54,882) |
(41,715) |
31.6 % |
||||||
|
Finance income |
11,970 |
3,526 |
239.5 % |
8,842 |
35.4 % |
20,812 |
6,071 |
242.8 % |
||||||
|
Gain (loss) on foreign currency fluctuations |
3,712 |
(6,834) |
-154.3 % |
1,201 |
209.0 % |
4,914 |
(3,916) |
-225.5 % |
||||||
|
Net change in fair value of derivatives |
(137,473) |
113,670 |
-220.9 % |
(37,933) |
262.4 % |
(175,406) |
106,918 |
-264.1 % |
||||||
|
Other non-operating income (expense) |
925 |
(2,717) |
-134.0 % |
1,235 |
-25.1 % |
2,160 |
(5,381) |
-140.1 % |
||||||
|
Total Non-Operating Income/(Expense) |
(151,382) |
86,375 |
-275.3 % |
(51,020) |
196.7 % |
(202,402) |
61,977 |
-426.6 % |
||||||
|
Profit before taxes |
43,284 |
128,636 |
-66.4 % |
142,192 |
-69.6 % |
185,476 |
149,012 |
24.5 % |
||||||
|
Income tax expense |
(25,775) |
(4,560) |
465.2 % |
(20,671) |
24.7 % |
(46,447) |
(5,177) |
797.2 % |
||||||
|
Net Profit/(Loss) |
17,509 |
124,076 |
-85.9 % |
121,521 |
-85.6 % |
139,030 |
143,835 |
-3.3 % |
||||||
|
EPS |
||||||||||||||
|
Basic |
0.44 |
3.01 |
-85.3 % |
3.07 |
-85.5 % |
3.52 |
3.49 |
1.0 % |
||||||
|
Shares used for calculation: |
||||||||||||||
|
Basic |
39,442,367 |
41,211,540 |
-4.3 % |
39,565,223 |
-0.3 % |
39,442,367 |
41,211,540 |
-4.3 % |
||||||
|
Copa Holdings, S. A. and subsidiaries |
||
|
Consolidated statement of financial position |
||
|
(US$ Thousands) |
||
|
June 2023 |
December 2022 |
|
|
ASSETS |
(Unaudited) |
(Audited) |
|
Cash and cash equivalents |
281,863 |
122,424 |
|
Short-term investments |
833,576 |
812,323 |
|
Total cash, cash equivalents and short-term investments |
1,115,439 |
934,747 |
|
Accounts receivable, net |
162,333 |
135,415 |
|
Accounts receivable from related parties |
2,388 |
2,168 |
|
Expendable parts and supplies, net |
104,332 |
93,332 |
|
Prepaid expenses |
46,025 |
52,322 |
|
Prepaid income tax |
335 |
798 |
|
Other current assets |
21,855 |
17,043 |
|
337,268 |
301,078 |
|
|
TOTAL CURRENT ASSETS |
1,452,707 |
1,235,825 |
|
Long-term investments |
222,282 |
202,056 |
|
Long-term prepaid expenses |
8,832 |
7,770 |
|
Property and equipment, net |
3,025,624 |
2,883,524 |
|
Right of use assets |
258,268 |
234,380 |
|
Intangible, net |
82,919 |
78,555 |
|
Net defined benefit assets |
1,732 |
504 |
|
Deferred tax assets |
29,499 |
30,743 |
|
Other Non-Current Assets |
16,796 |
17,005 |
|
TOTAL NON-CURRENT ASSETS |
3,645,952 |
3,454,537 |
|
TOTAL ASSETS |
5,098,659 |
4,690,362 |
|
LIABILITIES |
||
|
Loans and borrowings |
445,083 |
142,484 |
|
Derivative financial instruments |
426,555 |
– |
|
Current portion of lease liability |
71,940 |
80,084 |
|
Accounts payable |
161,880 |
166,660 |
|
Accounts payable to related parties |
2,340 |
1,004 |
|
Air traffic liability |
649,054 |
651,805 |
|
Frequent flyer deferred revenue |
114,570 |
111,526 |
|
Taxes Payable |
49,178 |
43,878 |
|
Employee benefits obligations |
39,537 |
44,913 |
|
Income tax payable |
14,814 |
6,276 |
|
Other Current Liabilities |
757 |
1,175 |
|
TOTAL CURRENT LIABILITIES |
1,975,708 |
1,249,805 |
|
Loans and borrowings long-term |
1,107,037 |
1,301,819 |
|
Lease Liability |
186,558 |
158,289 |
|
Derivative financial instruments |
– |
251,150 |
|
Deferred tax Liabilities |
34,710 |
16,571 |
|
Other long – term liabilities |
239,763 |
220,618 |
|
TOTAL NON-CURRENT LIABILITIES |
1,568,068 |
1,948,447 |
|
TOTAL LIABILITIES |
3,543,776 |
3,198,252 |
|
EQUITY |
||
|
Class A – 34,064,142 issued and 28,367,386 outstanding |
21,366 |
21,327 |
|
Class B – 10,938,125 |
7,466 |
7,466 |
|
Additional Paid-In Capital |
105,551 |
103,465 |
|
Treasury Stock |
(360,001) |
(344,541) |
|
Retained Earnings |
1,652,916 |
1,367,784 |
|
Net profit |
139,030 |
348,054 |
|
Other comprehensive loss |
(11,445) |
(11,445) |
|
TOTAL EQUITY |
1,554,883 |
1,492,110 |
|
TOTAL EQUITY LIABILITIES |
5,098,659 |
4,690,362 |
|
Copa Holdings, S. A. and subsidiaries |
|||||||||||||
|
Consolidated Statement of Cash Flows |
|||||||||||||
|
For the six months ended June 30, |
|||||||||||||
|
(In US$ thousands) |
|||||||||||||
|
2023 |
2022 |
2021 |
|||||||||||
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
|||||||||||
|
Cash flow from operating activities |
420,171 |
327,833 |
149,669 |
||||||||||
|
Cash flow used in investing activities |
(293,193) |
(262,743) |
(119,776) |
||||||||||
|
Cash flow from (used in) from financing activities |
32,461 |
(142,046) |
107,806 |
||||||||||
|
Net increase in cash and cash equivalents |
159,439 |
(76,956) |
137,699 |
||||||||||
|
Cash and cash equivalents at January 1 |
122,424 |
211,081 |
119,065 |
||||||||||
|
Cash and cash equivalents at June 30 |
$ 281,863 |
$ 134,125 |
$ 256,764 |
||||||||||
|
Short-term investments |
833,576 |
801,132 |
925,680 |
||||||||||
|
Long-term investments |
222,282 |
140,374 |
99,235 |
||||||||||
|
Total cash and cash equivalents and investments at June 30 |
$ 1,337,721 |
$ 1,075,631 |
$ 1,281,679 |
||||||||||
Copa Holdings, S.A.
NON-IFRS FINANCIAL MEASURE RECONCILIATION
This press release includes the following non-IFRS financial measures: 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 Net Profit |
2Q23 |
2Q22 |
1Q23 |
|||
|
Net Profit as Reported |
$ 17,509 |
$ 124,076 |
$ 121,521 |
|||
|
Add: Net change in fair value of derivatives |
$ 137,473 |
$ (113,670) |
$ 37,933 |
|||
|
Add: Net change in fair value of financial investments |
$ (512) |
$ 2,761 |
$ (1,655) |
|||
|
Adjusted Net Profit |
$ 154,469 |
$ 13,168 |
$ 157,798 |
|||
|
Reconciliation of Adjusted Basic EPS |
2Q23 |
2Q22 |
1Q23 |
|||
|
Adjusted Net Profit |
$ 154,469 |
$ 13,168 |
$ 157,798 |
|||
|
Shares used for calculation of Basic EPS |
39,442 |
41,212 |
39,565 |
|||
|
Adjusted Basic Earnings per share (Adjusted Basic EPS) |
$ 3.92 |
$ 0.32 |
$ 3.99 |
|||
|
Reconciliation of Operating Costs per ASM |
||||||
|
Excluding Fuel (CASM Excl. Fuel) |
2Q23 |
2Q22 |
1Q23 |
|||
|
Operating Costs per ASM as Reported (in US$ Cents) |
9.1 |
10.9 |
10.2 |
|||
|
Aircraft Fuel Cost per ASM (in US$ Cents) |
3.2 |
5.0 |
4.0 |
|||
|
Operating Costs per ASM excluding fuel (in US$ Cents) |
5.9 |
6.0 |
6.2 |
|||
SOURCE Copa Holdings, S.A.