Copa Holdings Reports Net Income of $191.8 million and EPS of $4.55 for the Fourth Quarter of 2023

Excluding special items, adjusted net income came in at $188.4 million, or Adjusted EPS of $4.47

PANAMA CITY, Panama, Feb. 7, 2024 /PRNewswire/ —  Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the fourth quarter of 2023 (4Q23) and the full year of 2023. 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 fourth quarter of 2022 (4Q22).

OPERATING AND FINANCIAL HIGHLIGHTS

  • Copa Holdings reported a net profit of US$191.8 million for 4Q23 or US$4.55 per share. Excluding special items comprised of a net gain of US$3.4 million related to the value of financial investments, the Company would have reported a net profit of US$188.4 million or US$4.47 per share.
  • For the full year 2023, the Company reported a net profit of US$518.2 million or US$12.89 per share. Excluding special items, comprised of a net loss related to the Company’s convertible notes as well as changes in the value of financial investments totaling US$156.9 million, Copa Holdings would have reported an adjusted net profit of US$675.1 million or US$16.79 per share, compared to an adjusted net profit of US$335.4 million or earnings per share of US$8.26 in 2022.
  • Copa Holdings reported an operating profit of US$218.9 million and a 23.9% operating margin for the quarter.
  • For the full year 2023, the Company reported an operating profit of US$811.8 million and an operating margin of 23.5%, compared to an adjusted operating profit of US$450.4 million and an operating margin of 15.2% in 2022.
  • Passenger traffic for 4Q23, measured in terms of revenue passenger miles (RPMs), increased by 11.1% compared to 4Q22 in line with capacity which, measured in available seat miles (ASMs), increased by 11.0%. As a result, the load factor for the quarter increased by 0.1 percentage points to 86.7% compared to 4Q22.
  • Total revenues for 4Q23 increased 3.0% to US$916.9 million mainly driven by higher capacity, while yields decreased by 7.1% to 14.0 cents. Consequently, revenue per available seat mile (RASM) decreased by 7.3% as compared to 4Q22 to 12.7 cents.
  • Operating cost per available seat mile (CASM) decreased 6.3% from 10.3 cents in 4Q22 to 9.7 cents in 4Q23, mainly driven by a decrease of 12.7% in the price of jet fuel per gallon and lower sales and distribution costs. CASM excluding fuel (Ex-fuel CASM) decreased by 1.6% in the quarter to 6.0 cents, when compared to 4Q22.
  • The Company ended the quarter with approximately US$1.2 billion in cash, short-term and long-term investments, which represent 34% of the last twelve months’ revenues.
  • The Company closed the quarter with total debt, including lease liabilities, of US$1.7 billion, while our Adjusted Net Debt to EBITDA ratio ended at 0.5 times.
  • During the quarter, the Company took delivery of three Boeing 737 MAX 9 aircraft, ending the year with a consolidated fleet of 106 aircraft – 67 Boeing 737-800s, 29 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 83.8% and a flight completion factor of 99.8%.

Subsequent Events

  • In January, Copa Airlines was recognized by Cirium for the ninth time as the most on-time airline in Latin America in 2023. Copa Airlines’ on-time performance of 89.5% for the year was the highest of any carrier in the Americas.
  • Following the Airworthiness Directive issued by the United States Federal Aviation Administration (FAA) on January 6, the Company suspended operations of twenty-one 737 MAX9 aircraft. From January 6 to January 29, a total of 1788 flights were canceled. After undergoing the technical inspections required by the regulators, all of these aircraft have returned to Copa Airlines’ flight schedule.
  • On February 7, 2024, the Board of Directors of Copa Holdings approved a 2024 quarterly dividend payment of US$1.61 per share. Dividends will be distributed during March, June, September, and December. The first quarterly dividend of US$1.61 per share will be paid on March 15, 2024, to shareholders on record as of February 29, 2024. 

Consolidated Financial

& Operating Highlights

4Q23

4Q22

Variance vs. 4Q22

3Q23

Variance vs. 3Q23

FY23

FY22

Variance vs. FY22

Revenue Passengers Carried (000s)

3,310

2,813

17.7 %

3,272

1.2 %

12,442

10,334

20.4 %

Revenue Passengers OnBoard (000s)

4,930

4,262

15.7 %

4,873

1.2 %

18,566

15,724

18.1 %

RPMs (millions)

6,263

5,639

11.1 %

6,239

0.4 %

24,052

20,779

15.7 %

ASMs (millions)

7,228

6,509

11.0 %

7,109

1.7 %

27,700

24,430

13.4 %

Load Factor

86.7 %

86.6 %

0.1 p.p.

87.8 %

-1.1 p.p.

86.8 %

85.1 %

1.8 p.p.

Yield (US$ Cents)

14.0

15.1

-7.1 %

13.4

5.1 %

13.8

13.6

1.6 %

PRASM (US$ Cents)

12.2

13.1

-7.1 %

11.7

3.8 %

12.0

11.6

3.7 %

RASM (US$ Cents)

12.7

13.7

-7.3 %

12.2

3.9 %

12.5

12.1

3.0 %

CASM (US$ Cents)

9.7

10.3

-6.3 %

9.3

3.6 %

9.6

10.3

-7.1 %

CASM Excl. Fuel (US$ Cents)

6.0

6.1

-1.6 %

5.8

3.9 %

6.0

6.0

-0.3 %

Fuel Gallons Consumed (millions)

85.6

77.7

10.2 %

83.9

2.1 %

327.6

291.4

12.4 %

Avg. Price Per Fuel Gallon (US$)

3.07

3.52

-12.7 %

3.00

2.6 %

3.02

3.60

-16.0 %

Average Length of Haul (miles)

1,892

2,005

-5.6 %

1,907

-0.8 %

1,933

2,011

-3.9 %

Average Stage Length (miles)

1,229

1,266

-2.9 %

1,238

-0.8 %

1,251

1,275

-1.9 %

Departures

36,207

32,112

12.8 %

35,468

2.1 %

137,044

120,155

14.1 %

Block Hours

115,118

104,822

9.8 %

112,114

2.7 %

438,913

390,639

12.4 %

Average Aircraft Utilization (hours)

11.9

11.8

1.3 %

11.9

0.0 %

11.9

11.3

5.0 %

Operating Revenues (US$ millions)

916.9

890.6

3.0 %

867.7

5.7 %

3,461.1

2,965.0

16.7 %

Operating Profit (Loss) (US$ millions)

218.9

219.7

-0.4 %

205.0

6.8 %

811.8

450.4

80.2 %

Operating Margin

23.9 %

24.7 %

-0.8 p.p.

23.6 %

0.2 p.p.

23.5 %

15.2 %

8.3 p.p.

Net Profit (Loss) (US$ millions)

191.8

88.3

117.2 %

187.4

2.4 %

518.2

348.1

48.9 %

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

188.4

177.7

6.0 %

174.4

8.0 %

675.1

335.4

101.3 %

Basic EPS (US$)

4.55

2.23

103.9 %

4.72

-3.5 %

12.89

8.58

50.3 %

Adjusted Basic EPS (US$) (1)

4.47

4.49

-0.5 %

4.39

1.8 %

16.79

8.26

103.2 %

Shares for calculation of Basic EPS (000s)

42,150

39,554

6.6 %

39,730

6.1 %

40,201

40,582

-0.9 %

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

FULL 4Q23 EARNINGS RELEASE AVAILABLE FOR DOWNLOAD AT:

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

4Q23 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.
















Consolidated statement of profit or loss
















(US$ Thousands)


















Unaudited


Unaudited


%

Unaudited


%

Unaudited


Audited


%




4Q23


4Q22


Change

3Q23


Change

FY23


FY22


Change


Operating Revenues
















Passenger revenue


879,351


852,291


3.2 %

833,306


5.5 %

3,320,455


2,824,719


17.5 %


Cargo and mail revenue


26,534


27,095


-2.1 %

23,431


13.2 %

97,105


1,01,765


-4.6 %


Other operating revenue


11,049


11,226


-1.6 %

10,973


0.7 %

43,538


38,549


12.9 %


Total Operating Revenue


916,933


890,612


3.0 %

867,711


5.7 %

3,461,098


2,965,033


16.7 %


















Operating Expenses
















Fuel


264,166


273,901


-3.6 %

252,077


4.8 %

995,862


1,052,637


-5.4 %


Wages, salaries, benefits and other employees’ expenses


119,669


105,019


14.0 %

108,416


10.4 %

436,526


380,385


14.8 %


Passenger servicing


24,148


19,518


23.7 %

23,147


4.3 %

89,146


70,080


27.2 %


Airport facilities and handling charges


59,010


49,734


18.7 %

58,243


1.3 %

2,21,878


1,92,584


15.2 %


Sales and distribution


55,111


61,498


-10.4 %

54,058


1.9 %

2,27,171


2,24,465


1.2 %


Maintenance, materials and repairs


31,276


28,875


8.3 %

29,528


5.9 %

1,32,531


1,04,114


27.3 %


Depreciation and amortization


79,815


70,251


13.6 %

78,359


1.9 %

3,05,668


2,67,704


14.2 %


Flight operations


27,987


25,667


9.0 %

29,476


-5.1 %

1,09,892


97,256


13.0 %


Other operating and administrative expenses


36,875


36,492


1.0 %

29,394


25.5 %

1,30,656


1,25,424


4.2 %


Total Operating Expense


698,058


670,954


4.0 %

662,697


5.3 %

2,649,331


2,514,648


5.4 %


















Operating Profit/(Loss)


218,875


219,657


-0.4 %

205,014


6.8 %

811,767


450,384


80.2 %


















Non-operating Income (Expense):
















Finance cost


(20,408)


(23,388)


-12.7 %

(82,926)


-75.4 %

(1,58,216)


(87,631)


80.5 %


Finance income


14,289


7,413


92.8 %

15,108


-5.4 %

50,209


18,030


178.5 %


Gain (loss) on foreign currency fluctuations


(272)


(2,560)


-89.4 %

(1,566)


-82.6 %

3,076


(9,812)


-131.3 %


Net change in fair value of derivatives



(91,305)


-100.0 %

77,058


-100.0 %

(98,347)


17,189


-672.2 %


Other non-operating income (expense)


3,126


1,221


156.0 %

1,867


67.5 %

7,153


70


10065.6 %


Total Non-Operating Income/(Expense)


(3,264)


(1,08,619)


-97.0 %

9,540


-134.2 %

(196,126)


(62,155)


215.5 %


















Profit before taxes


215,611


111,039


94.2 %

214,555


0.5 %

615,641


388,229


58.6 %


















Income tax expense


(23,830)


(22,758)


4.7 %

(27,179)


-12.3 %

(97,456)


(40,176)


142.6 %


















Net Profit/(Loss)


191,780


88,280


117.2 %

187,375


2.4 %

518,185


348,054


48.9 %


















EPS
















Basic


4.55


2.23


103.9 %

4.72


-3.5 %

12.89


8.58


50.3 %


















Shares used for calculation:
















Basic


42,149,854


39,554,071


6.6 %

39,730,180


6.1 %

40,200,947


40,581,616


-0.9 %


Copa Holdings, S. A. and subsidiaries 



Consolidated statement of financial position 



(US$ Thousands)




December 2023

December 2022

 ASSETS 

 (Unaudited)  

 (Audited)  

Cash and cash equivalents

206,375

122,424

Short-term investments

708,809

812,323

Total cash, cash equivalents and short-term investments

915,184

934,747




Accounts receivable, net

156,720

135,415

Accounts receivable from related parties

2,527

2,168

Expendable parts and supplies, net

116,604

93,332

Prepaid expenses

44,635

52,322

Prepaid income tax

66

798

Other current assets

32,227

17,043


352,779

301,078

TOTAL CURRENT ASSETS

1,267,963

1,235,825




Long-term investments

258,934

202,056

Long-term prepaid expenses

9,633

7,770

Property and equipment, net

3,239,078

2,883,524

Right of use assets

281,146

234,380

Intangible, net

87,986

78,555

Net defined benefit assets

5,346

504

Deferred tax assets

30,136

30,743

Other Non-Current Assets

17,048

17,005

TOTAL NON-CURRENT ASSETS

3,929,307

3,454,537




TOTAL ASSETS

5,197,270

4,690,362




 LIABILITIES 



Loans and borrowings

2,22,430

1,42,484

Current portion of lease liability

68,304

80,084

Accounts payable

182,303

166,660

Accounts payable to related parties

1,228

1,004

Air traffic liability

605,900

651,805

Frequent flyer deferred revenue

126,677

111,526

Taxes Payable

44,210

43,878

Accrued expenses payable

64,940

44,913

Income tax payable

26,956

6,276

Other Current Liabilities

1,403

1,175

TOTAL CURRENT LIABILITIES

1,344,351

1,249,805




Loans and borrowings long-term

1,240,261

1,301,819

Lease Liability

215,353

158,289

Derivative financial instruments

251,150

Deferred tax Liabilities

36,594

16,571

Other long – term liabilities

234,474

220,618

TOTAL NON-CURRENT LIABILITIES

1,726,682

1,948,447




TOTAL LIABILITIES

3,071,033

3,198,252




EQUITY



Class A – 34,075,142  issued and 31,090,299 outstanding

21,367

21,327

Class B – 10,938,125

7,466

7,466

Additional Paid-In Capital

210,936

103,465

Treasury Stock

(204,130)

(344,541)

Retained Earnings

1,581,739

1,367,784

Net profit 

518,185

348,054

Other comprehensive loss

(9,326)

(11,445)




TOTAL EQUITY

2,126,237

1,492,110

TOTAL EQUITY LIABILITIES

5,197,270

4,690,362

Copa Holdings, S. A. and subsidiaries 







Consolidated Statement of Cash Flows







For the twelve months ended December 31, 







(In US$ thousands)

















2023


2022


2021










(Unaudited)


(Audited)


(Audited)

Cash flow from operating activities 


1,020,974


740,948


462,612

Cash flow (used in) investing activities 


(542,995)


(555,911)


(459,135)

Cash flow (used in) from financing activities 


(394,028)


(273,694)


88,539

Net  increase (decrease) in cash and cash equivalents 


83,951


(88,657)


92,016

Cash and cash equivalents at January 1


122,424


211,081


119,065

Cash and cash equivalents at December 31


$                   206,375


$                   122,424


$                   211,081















Short-term investments 


708,809


812,323


806,340

Long-term investments 


258,934


202,056


199,670

Total cash and cash equivalents and investments at December 31


$                1,174,118


$                1,136,803


$                1,217,091















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


4Q23


4Q22


3Q23


FY23


FY22












Net Profit as Reported


$    191,780


$       88,280


$    187,375


$    518,185


$    348,054

   Interest expense related to the settlement of the convertible notes


$                –


$                –


$       64,894


$       64,894


$                –

   Net change in fair value of derivatives


$                –


$       91,305


$      (77,058)


$       98,347


$      (17,189)

   Net change in fair value of financial investments


$        (3,372)


$        (1,924)


$           (810)


$        (6,349)


$          4,516

Adjusted Net Profit


$    188,409


$    177,661


$    174,400


$    675,077


$    335,381












Reconciliation of Adjusted Basic EPS


4Q23


4Q22


3Q23


FY23


FY22












Adjusted Net Profit


$    188,409


$    177,661


$    174,400


$    675,077


$    335,381

Shares used for calculation of Basic EPS


42,150


39,554


39,730


40,201


40,582

Adjusted Basic Earnings per share (Adjusted Basic EPS)


$            4.47


$            4.49


$            4.39


$          16.79


$            8.26












Reconciliation of Operating Costs per ASM











Excluding Fuel (CASM Excl. Fuel)


4Q23


4Q22


3Q23


FY23


FY22












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


9.7


10.3


9.3


9.6


10.3

Aircraft Fuel Cost per ASM  (in US$ Cents)


3.7


4.2


3.5


3.6


2.8

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


6.0


6.1


5.8


6.0


7.2












SOURCE Copa Holdings, S.A.


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