Copa Holdings Reports Net Income of US$6.2 Million and EPS of US$0.14 for the Third Quarter of 2015
OPERATING AND FINANCIAL HIGHLIGHTS
Copa Holdings reported net income ofUS\\$6.2 million for 3Q15, or diluted earnings per share (EPS) ofUS\\$0.14 . Excluding special items,Copa Holdings would have reported an adjusted net income of\\$37.4 million , or\\$0.85 per share, a 62.5% decrease from adjusted net income ofUS\\$99.8 million andUS\\$2.25 per share for 3Q14.- Operating income for 3Q15 came in at
US\\$50.6 million , a 54.5% decrease from operating income ofUS\\$111.1 million in 3Q14. Operating margin for the period came in at 9.2% or 7.5 percentage points below 3Q14, as a result of lower unit revenues. - Total revenues decreased 17.5% to
US\\$547.2 million . Yield per passenger mile decreased 20.1% to12.7 cents and operating revenue per available seat mile (RASM) decreased 19.1% to10.1 cents . - For 3Q15, passenger traffic (RPMs) grew 1.8% on a 1.9% capacity expansion. As a result, consolidated load factor came in at 76.3%, or 0.1 percentage points below 3Q14.
- Operating cost per available seat mile (CASM) declined 11.8% to
9.2 cents . CASM, excluding fuel, increased 0.3% to6.4 cents . - Cash, short term and long term investments ended 3Q15 at
US\\$1.08 billion , representing 45% of the last twelve months' revenues. Of this amount, 39% is inVenezuela pending repatriation due to government currency controls. - During the third quarter, as part of the Company's share repurchase program,
Copa Holdings entered into aUS\\$100 million accelerated share repurchase program (ASR). - During the third quarter,
Copa Airlines took delivery of two Boeing 737-800 aircraft. As a result,Copa Holdings ended the quarter with a consolidated fleet of 99 aircraft. - For 3Q15,
Copa Holdings reported consolidated on-time performance of 89.8% and a flight-completion factor of 99.8%, maintaining its position among the best in the industry.
SUBSEQUENT EVENTS
- 4Q15 Dividend Payment -
Copa Holdings will pay its fourth quarter dividend ofUS\\$0.84 per share onDecember 15, 2015 , on all outstanding Class A and Class B shares, to stockholders of record as ofNovember 30, 2015 .
Consolidated Financial & Operating Highlights |
3Q15 |
3Q14 |
% Change |
2Q15 |
% Change |
Revenue Passengers Carried ('000) |
1,987 |
1,937 |
2.6% |
1,868 |
6.4% |
RPMs (mm) |
4,116 |
4,043 |
1.8% |
3,933 |
4.6% |
ASMs (mm) |
5,397 |
5,296 |
1.9% |
5,359 |
0.7% |
Load Factor |
76.3% |
76.3% |
-0.1 p.p. |
73.4% |
2.9 p.p. |
Yield |
12.7 |
15.9 |
-20.1% |
13.2 |
-3.9% |
PRASM (US\\$ Cents) |
9.7 |
12.2 |
-20.2% |
9.7 |
0.5% |
RASM (US\\$ Cents) |
10.1 |
12.5 |
-19.1% |
10.0 |
0.9% |
CASM (US\\$ Cents) |
9.2 |
10.4 |
-11.8% |
9.1 |
0.8% |
CASM Excl. Fuel (US\\$ Cents) |
6.4 |
6.4 |
0.3% |
6.2 |
3.5% |
Breakeven Load Factor (1) |
69.8% |
62.2% |
7.6 p.p. |
66.0% |
3.8 p.p. |
Fuel Gallons Consumed (Millions) |
69.2 |
68.2 |
1.5% |
67.9 |
1.9% |
Avg. Price Per Fuel Gallon (US\\$ Dollars) |
2.16 |
3.12 |
-30.8% |
2.30 |
-6.1% |
Average Length of Haul (Miles) |
2,071 |
2,088 |
-0.8% |
2,105 |
-1.6% |
Average Stage Length (Miles) |
1,233 |
1,236 |
-0.2% |
1,243 |
-0.8% |
Departures |
30,619 |
30,325 |
1.0% |
30,094 |
1.7% |
Block Hours |
97,053 |
95,819 |
1.3% |
95,694 |
1.4% |
Average Aircraft Utilization (Hours) |
10.8 |
11.0 |
-1.8% |
10.8 |
-0.4% |
Operating Revenues (US\\$ mm) |
547.2 |
663.7 |
-17.5% |
538.4 |
1.7% |
Operating Income (US\\$ mm) |
50.6 |
111.1 |
-54.5% |
49.2 |
2.8% |
Operating Margin |
9.2% |
16.7% |
-7.5 p.p. |
9.1% |
0.1 p.p. |
Net Income (US\\$ mm) |
6.2 |
66.0 |
-90.6% |
64.1 |
-90.3% |
Adjusted Net Income (US\\$ mm) (1) |
37.4 |
99.8 |
-62.5% |
41.0 |
-8.7% |
EPS - Basic and Diluted (US\\$) |
0.14 |
1.49 |
-90.5% |
1.46 |
-90.3% |
Adjusted EPS - Basic and Diluted (US\\$) (1) |
0.85 |
2.25 |
-62.2% |
0.93 |
-8.7% |
# of Shares - Basic and Diluted ('000) |
44,030 |
44,404 |
-0.8% |
44,038 |
0.0% |
(1)Breakeven Load Factor, Adjusted Net Income and Adjusted EPS for 3Q15, 3Q14, and 2Q15 exclude non-cash charges/gains associated with the mark-to-market of fuel hedges and charges/gains related to the Venezuelan currency. . Additionally, 3Q15 exclude mark-to-market of share repurchase. Note: Attached to this press release is a reconciliation of non-IFRS financial measures to the comparable IFRS measures.
FULL 3Q15 EARNINGS RELEASE AVAILABLE FOR DOWNLOAD AT: http://investor.shareholder.com/copa/results.cfm
3Q15 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST
Date: |
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Time: |
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Conference telephone number: |
877-293-5456 (US Domestic Callers) |
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707-287-9357 (International Callers) |
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Webcast: |
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Speakers: |
Pedro Heilbron, Chief Executive Officer |
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Jose Montero, Chief Financial Officer |
About
CONTACT:
Investor Relations:
Ph: (507) 304-2431
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 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
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Income Statement - IFRS |
|||||||||
(US\\$ Thousands) |
|||||||||
Unaudited |
Unaudited |
% |
Unaudited |
% | |||||
3Q15 |
3Q14 |
Change |
2Q15 |
Change | |||||
Operating Revenues |
|||||||||
Passenger Revenue |
523,531 |
643,719 |
-18.7% |
517,508 |
1.2% | ||||
Cargo, mail and other |
23,716 |
19,974 |
18.7% |
20,846 |
13.8% | ||||
Total Operating Revenue |
547,247 |
663,693 |
-17.5% |
538,354 |
1.7% | ||||
Operating Expenses |
|||||||||
Aircraft fuel |
149,197 |
212,591 |
-29.8% |
155,908 |
-4.3% | ||||
Salaries and benefits |
71,902 |
74,016 |
-2.9% |
69,204 |
3.9% | ||||
Passenger servicing |
65,175 |
68,791 |
-5.3% |
63,315 |
2.9% | ||||
Commissions |
22,632 |
22,934 |
-1.3% |
20,383 |
11.0% | ||||
Reservations and sales |
19,636 |
22,122 |
-11.2% |
22,033 |
-10.9% | ||||
Maintenance, material and repairs |
25,946 |
24,186 |
7.3% |
27,999 |
-7.3% | ||||
Depreciation |
35,485 |
28,070 |
26.4% |
33,855 |
4.8% | ||||
Flight operations |
30,928 |
34,014 |
-9.1% |
32,605 |
-5.1% | ||||
Aircraft rentals |
30,409 |
28,083 |
8.3% |
30,034 |
1.3% | ||||
Landing fees and other rentals |
14,585 |
13,498 |
8.1% |
14,889 |
-2.0% | ||||
Other |
30,796 |
24,327 |
26.6% |
18,973 |
62.3% | ||||
Total Operating Expense |
496,691 |
552,633 |
-10.1% |
489,197 |
1.5% | ||||
Operating Income |
50,556 |
111,060 |
-54.5% |
49,157 |
2.8% | ||||
Non-operating Income (Expense): |
|||||||||
Interest expense |
(8,271) |
(7,603) |
8.8% |
(8,372) |
-1.2% | ||||
Interest income |
5,728 |
4,348 |
31.7% |
5,789 |
-1.1% | ||||
Other, net |
(37,600) |
(36,157) |
4.0% |
24,657 |
n/m | ||||
Total Non-Operating Income/(Expense) |
(40,143) |
(39,412) |
1.9% |
22,074 |
n/m | ||||
Income before Income Taxes |
10,413 |
71,648 |
-85.5% |
71,231 |
-85.4% | ||||
Provision for Income Taxes |
4,200 |
5,667 |
-25.9% |
7,134 |
-41.1% | ||||
Net Income |
6,213 |
65,980 |
-90.6% |
64,097 |
-90.3% | ||||
EPS - Basic and Diluted |
0.14 |
1.49 |
-90.5% |
1.46 |
-90.3% | ||||
Shares - Basic and Diluted |
44,030,111 |
44,403,578 |
-0.8% |
44,037,684 |
0.0% |
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Balance Sheet - IFRS |
|||||
(US\\$ Thousands) |
|
| |||
2015 |
2014 | ||||
(Unaudited) |
(Audited) | ||||
ASSETS |
|||||
Current Assets: |
|||||
Cash and cash equivalents |
\\$ 121,540 |
\\$ 221,443 | |||
Restricted cash and cash equivalents |
48,702 |
52,425 | |||
Short-term investments |
484,242 |
492,735 | |||
Total cash, cash equivalents and short-term investments |
654,483 |
766,603 | |||
Accounts receivable, net of allowance for doubtful accounts |
123,096 |
121,258 | |||
Accounts receivable from related parties |
1,826 |
892 | |||
Expendable parts and supplies, net of allowance for obsolescence |
59,910 |
59,954 | |||
Prepaid expenses |
52,565 |
56,793 | |||
Other current assets |
81,243 |
5,949 | |||
Total Current Assets |
973,124 |
1,011,449 | |||
Long-term investments |
428,259 |
396,802 | |||
Property and Equipment: |
|||||
Owned property and equipment: |
|||||
Flight equipment |
2,955,926 |
2,725,407 | |||
Other equipment |
98,021 |
89,257 | |||
3,053,947 |
2,814,664 | ||||
Less: Accumulated depreciation |
(720,511) |
(630,503) | |||
2,333,436 |
2,184,161 | ||||
Purchase deposits for flight equipment |
276,504 |
321,175 | |||
Total Property and Equipment |
2,609,941 |
2,505,336 | |||
Other Assets: |
|||||
Net pension asset |
21,341 |
13,784 | |||
|
19,243 |
20,380 | |||
Intangible asset |
45,335 |
36,915 | |||
Deferred tax Assets |
22,594 |
17,235 | |||
Other assets |
72,097 |
88,973 | |||
Total Other Assets |
180,611 |
177,287 | |||
Total Assets |
\\$ 4,191,935 |
\\$ 4,090,874 | |||
LIABILITIES AND SHAREHOLDER'S EQUITY |
|||||
Current Liabilities: |
|||||
Current maturities of long-term debt |
\\$ 258,990 |
\\$ 187,646 | |||
Accounts payable |
105,555 |
125,412 | |||
Accounts payable to related parties |
10,712 |
6,749 | |||
Air traffic liability |
352,283 |
408,012 | |||
Taxes and interest payable |
59,809 |
58,554 | |||
Accrued expenses payable |
63,432 |
85,847 | |||
Other current liabilities |
105,901 |
109,277 | |||
Total Current Liabilities |
956,682 |
981,497 | |||
Non-Current Liabilities: |
|||||
Long-term debt |
997,657 |
928,964 | |||
Post employment benefits liability |
16,588 |
11,262 | |||
Other long-term liabilities |
66,006 |
57,747 | |||
Deferred tax liabilities |
45,940 |
36,296 | |||
Total Non-Current Liabilities |
1,126,192 |
1,034,269 | |||
Total Liabilities |
2,082,874 |
2,015,766 | |||
Shareholders' Equity: |
|||||
Class A - 33,456,095 issued and 32,477,353 outstanding |
20,924 |
20,859 | |||
Class B - 10,938,125 shares issued and outstanding |
7,466 |
7,466 | |||
Additional paid in capital |
56,390 |
53,486 | |||
Treasury Stock |
(58,080) |
(18,426) | |||
Retained earnings |
2,083,801 |
2,011,485 | |||
Accumulated other comprehensive income (loss) |
(1,439) |
238 | |||
Total Shareholders' Equity |
2,109,061 |
2,075,108 | |||
Total Liabilities and Shareholders' Equity |
\\$ 4,191,935 |
\\$ 4,090,874 | |||
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Consolidated Statement of Cash Flows |
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For the nine months ended |
|||||||||||||
(In US\\$ thousands) |
|||||||||||||
2015 |
2014 |
2013 | |||||||||||
(Unaudited) |
(Unaudited) |
(Unaudited) | |||||||||||
Cash flow from operating activities |
236,743 |
148,334 |
563,727 | ||||||||||
Cash flow used in investing activities |
(223,658) |
(165,328) |
(26,314) | ||||||||||
Cash flow (used) from in financing activities |
(98,982) |
64,622 |
(138,325) | ||||||||||
Net (decrease) increase in cash and cash equivalents |
(85,897) |
47,628 |
399,088 | ||||||||||
Cash and cash equivalents at |
207,437 |
139,110 |
76,094 | ||||||||||
Cash and cash equivalents at |
\\$ 121,540 |
\\$ 186,738 |
\\$ 475,182 | ||||||||||
Short-term investments ** |
484,242 |
698,945 |
499,047 | ||||||||||
Long-term investments *** |
428,259 |
240,097 |
46,590 | ||||||||||
Restricted cash and cash equivalents **** |
48,702 |
- |
- | ||||||||||
Total cash and cash equivalents and investments at |
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* At | |||||||||||||
** Short term - investments include | |||||||||||||
*** Long term - investments include | |||||||||||||
**** Restricted cash correspond to a margin calls to secure derivative financial instruments transactions. |
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 Net Income |
||||||
Excluding Special Items |
3Q15 |
3Q14 |
2Q15 | |||
Net income as Reported |
|
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Special Items (adjustments): |
||||||
Unrealized (gain) loss on fuel hedging instruments |
26,800 |
28,293 |
(23,409) | |||
(Loss) gain due to devaluation of Venezuelan Bolivar |
(2,100) |
(5,516) |
(294) | |||
Unrealized (gain) loss on shares repurchase |
2,296 |
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Adjusted Net Income |
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|
| |||
Shares used for Computation (in thousands) |
||||||
Basic and Diluted |
44,030 |
44,404 |
44,038 | |||
Adjusted earnings per share - Basic and Diluted |
0.85 |
2.25 |
0.93 | |||
Reconciliation Operating Costs per ASM |
||||||
Excluding Fuel and Special Items |
3Q15 |
3Q14 |
2Q15 | |||
Operating Costs per ASM as Reported |
9.2 |
10.4 |
9.1 | |||
Aircraft fuel per ASM |
(2.8) |
(4.0) |
(2.9) | |||
Operating Costs per ASM excluding fuel |
6.4 |
6.4 |
6.2 | |||
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