Excluding special items, adjusted net income came in at $28.1 million or $0.64 per share
PANAMA CITY – Copa Holdings, S.A. (NYSE: CPA), parent company of Copa Airlines and Aero Republica, today announced financial results for the second quarter of 2009 (2Q09). The terms „Copa Holdings“ or „the Company“ refer to the consolidated entity, whose operating subsidiaries are Copa Airlines and Aero Republica. The following financial and operating information, unless otherwise indicated, is presented in accordance with U.S. GAAP. Unless otherwise stated, all comparisons with prior periods refer to the second quarter of 2008 (2Q08).
OPERATING AND FINANCIAL HIGHLIGHTS
— Copa Holdings reported net income of US$55.2 million for 2Q09, or diluted earnings per share (EPS) of US$1.26, an increase of 81.3% as compared to net income of US$30.4 million or diluted EPS of US$0.70 in 2Q08.
— Excluding special items, which for 2Q09 included a US$27.1 million non-cash gain associated with the mark-to-market of fuel hedge contracts, Copa Holdings would have reported an adjusted net income of US$28.1 million, or diluted EPS of $0.64, compared to an adjusted net income of US$24.8 million or EPS of US$0.57 for 2Q08. See the accompanying reconciliation of non-GAAP financial information to GAAP financial information included in the financial tables section of this earnings release.
— Passenger traffic for the months of May and June were negatively affected as a result of the H1N1 flu crisis, which resulted in lower overall demand for intra-Latin America travel, especially to and from Mexico. The Company estimates that the H1N1 flu crisis reduced consolidated passenger revenue by approximately US$12 million.
— Operating income for 2Q09 came in at US$36.8 million, despite a US$12.8 million realized fuel hedge loss, representing an increase of 17.8% as compared to operating income of US$31.2 million for 2Q08, which included a US$7.5 million fuel hedge gain. Operating margin increased from 10.5% to 13.2%.
— In 2Q09, total revenues reached US$277.6 million, representing a 6.8% decline, on a 16.5% capacity expansion. Yield per passenger mile decreased 13.3% to 15.6 cents and operating revenue per available seat mile (RASM) decreased 20.0% to 11.4 cents.
— Revenue passenger miles (RPMs) increased 7.5% from 1.56 billion in 2Q08 to 1.68 billion in 2Q09, and available seat miles (ASMs) increased 16.5% from 2.09 billion in 2Q08 to 2.44 billion in 2Q09, with the Copa Airlines segment increasing 18.1% year-over-year and Aero Republica increasing 8.9%. Consolidated load factor decreased 5.7 percentage points to 68.7%. Break-even load factor for 2Q09 decreased 6.7 percentage points to 59.7% from 66.4% in 2Q08.
— Operating cost per available seat mile (CASM) decreased 22.5%, from 12.7 cents in 2Q08 to 9.9 cents in 2Q09. CASM, excluding fuel costs, decreased 9.1% from 7.8 cents in 2Q08 to 7.1 cents in 2Q09.
— Cash, short term and long term investments ended the quarter at US$394.3 million, representing 31% of the last twelve months‘ revenues.
— Copa Holdings ended the quarter with a consolidated fleet of 58 aircraft. Copa Airlines fleet consisted of 43 aircraft, including 28 Boeing 737 Next Generation and 15 Embraer-190’s. Aero Republica’s fleet consisted of 15 aircraft, including 11 Embraer-190’s and four MD-80’s.
— For 2Q09, Copa Airlines reported on-time performance of approximately 90% and a flight-completion factor of 99.5%, maintaining its position among the best in the industry.
RECENT DEVELOPMENTS
— On July 16, Copa Airlines and Boeing announced an order for 13 Boeing 737-800 aircraft, plus options for an additional 8. At Boeing list prices, the new order will represent a total investment of approximately US$1 billion. Deliveries of the 13 newly ordered aircraft will begin in 2012 and end in 2015, with the 8 additional options available for delivery between 2015 and 2017.
— On July 23, Copa Holdings announced it has obtained final loan guarantee commitments from the Export-Import Bank of the United States (EX-IM Bank) to support the purchase and financing of two Boeing 737-800 Next Generation aircraft scheduled for delivery in 2009, as well as preliminary commitments for 10 additional aircraft scheduled for delivery between 2010 and 2012.
Consolidated Financial &
Operating Highlights 2Q09 2Q08 %Change 1Q08 %Change
RPMs (millions) 1,676 1,559 7.5% 1,807 -7.3%
ASMs (mm) 2,438 2,093 16.5% 2,430 0.3%
Load Factor 68.7% 74.5% -5.7 p.p. 74.4% -5.6 p.p.
Yield 15.6 18.0 -13.3% 16.2 -3.7%
PRASM (cents) 10.7 13.4 -20.0% 12.1 -11.0%
RASM (cents) 11.4 14.2 -20.0% 12.7 -10.4%
CASM (cents) 9.9 12.7 -22.5% 9.9 0.1%
Adjusted CASM (cents) (1) 9.9 12.7 -22.5% 9.9 0.1%
CASM Excl. Fuel (cents) 7.1 7.8 -9.1% 6.8 3.0%
Breakeven Load Factor (2) 59.7% 66.4% -6.7 p.p. 57.5% 2.2 p.p.
Operating Revenues (US$ mm) 277.6 297.9 -6.8% 308.8 -10.1%
EBITDAR (US$ mm) (1) 91.2 66.7 36.6% 111.4 -18.2%
Adjusted EBITDAR (US$ mm)
(1)(2) 64.1 61.1 5.0% 95.3 -32.7%
EBITDAR Margin (1) 32.8% 22.4% 10.4 p.p. 36.1% -3.3 p.p.
Adjusted EBITDAR Margin
(1)(2) 23.1% 20.5% 2.6 p.p. 30.9% -7.8 p.p.
Operating Income (US$ mm) 36.8 31.2 17.8% 68.9 -46.7%
Adjusted Operating Income
(US$ mm)(1) 36.8 31.2 17.8% 68.9 -46.7%
Operating Margin 13.2% 10.5% 2.8 p.p. 22.3% -9.1 p.p.
Adjusted Operating Margin
(1) 13.2% 10.5% 2.8 p.p. 22.3% -9.1 p.p.
Net Income (US$ mm) 55.2 30.4 81.3% 71.6 -23.0%
Adjusted Net Income (US$ mm)
(2) 28.1 24.8 13.5% 55.5 -49.3%
EPS - Basic (US$) 1.27 0.70 80.7% 1.67 -23.7%
Adjusted EPS - Basic (US$)
(2) 0.65 0.58 12.6% 1.29 -49.8%
EPS - Diluted (US$) 1.26 0.70 80.4% 1.65 -23.4%
Adjusted EPS - Diluted (US$)
(2) 0.64 0.57 12.8% 1.28 -49.6%
Weighted Avg. # of Shares -
Basic (000) 43,338 43,195 0.3% 42,908 1.0%
Weighted Avg. # of Shares -
Diluted (000) 43,685 43,465 0.5% 43,464 0.5%
(1) EBITDAR means earnings before interest, taxes, depreciation, amortization and rent.
(2) Break-even load factor, adjusted EBITDAR, Adjusted EBITDAR margin, Adjusted Net Income and Adjusted EPS (Basic and Diluted) exclude non-cash charges/gains associated with the mark-to-market of fuel hedges.
Note: A reconciliation of non-GAAP financial to the comparable US GAAP measures appears at the end of this press release.
Full 2Q09 earnings release available for download at: http://investor.shareholder.com/copa/results.cfm
2Q09 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST
Date: August 6, 2009
Time: 11:00 a.m. EDT (10:00 a.m. Panama Time)
Conference Call:
Telephone Number: 877-545-1415 (U.S. Domestic Callers)
719-325-4854 (International Callers)
Webcast Link: http://investor.shareholder.com/copa/events.cfm
About Copa Holdings
Copa Holdings, through its Copa Airlines and Aero Republica operating subsidiaries, is a leading Latin American provider of passenger and cargo service. Copa Airlines currently offers approximately 144 daily scheduled flights to 45 destinations in 24 countries in North, Central and South America and the Caribbean. In addition, Copa Airlines provides passengers with access to flights to more than 120 other international destinations through code share agreements with Continental Airlines and other airlines. Aero Republica, the second-largest domestic carrier in Colombia, provides service to 12 cities in Colombia as well as international connectivity with Copa Airlines‘ Hub of the Americas through flights from Bogota, Bucaramanga, Cali, Cartagena, Medellin and Pereira. Additionally, Aero Republica has direct daily flights to Caracas, Venezuela, from the cities of Bogota and Medellin, Colombia.
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.
Copa Holdings, S.A.
NON-GAAP FINANCIAL MEASURE RECONCILIATION
This press release includes the following non GAAP financial measures: Adjusted EBITDAR, Adjusted Net Income and Adjusted EPS. This supplemental information is presented because we believe they are useful indicators of our operating performance and are 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 US GAAP measures, in particular operating income and net income. The following is a reconciliation of these non-GAAP financial measures to the comparable US GAAP measures:
Reconciliation of EBITDAR
Excluding Special Items 2Q09 2Q08 1Q09
Net income as Reported $55,162 $30,431 $71,615
Interest Expense (8,520) (9,815) (8,936)
Capitalized Interest 233 484 318
Interest Income 2,211 2,596 2,563
Income Taxes (3,115) (3,507) (5,641)
EBIT 64,353 40,674 83,311
Depreciation and Amortization 11,966 10,433 11,928
EBITDA 76,319 51,107 95,239
Aircraft Rent 11,487 12,012 12,366
Other Rentals 3,345 3,610 3,812
EBITDAR $91,150 $66,729 $111,417
Special Items (adjustments):
Unrealized (gain) loss on fuel
hedging instruments (1) (27,069) (5,679) (16,163)
Adjusted EBITDAR $64,081 $61,050 $95,254
Reconciliation of Net Income
Excluding Special Items 2Q09 2Q08 1Q09
Net income as Reported $55,162 $30,431 $71,615
Special Items (adjustments):
Unrealized (gain) loss on fuel
hedging instruments (1) (27,069) (5,679) (16,163)
Adjusted Net Income $28,093 $24,752 $55,452
Shares used for Computation (in thousands)
Basic 43,338 43,195 42,908
Diluted 43,685 43,465 43,464
Adjusted earnings per share
Basic 0.65 0.57 1.29
Diluted 0.64 0.57 1.28
FOOTNOTE:
(1) The 2Q09, 2Q08 and 1Q09 periods included non-cash gains of US$27.1 million, US$5.7 million and US$16.2 million, respectively, resulting from the mark-to-market accounting for changes in the fair value of fuel hedging instruments.
CPA-G
SOURCE Copa Holdings, S.A.
picture: Copa Holdings, S.A.
