·
|
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 realized 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.
|
·
|
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$1 billion. Deliveries of the 13 newly ordered aircraft will begin in
2012 and end in 2015, with the 8 additional options available for delivery
between 2015 and 2017.
|
·
|
On
July 23, Copa Holdings announced it has obtained final loan guarantee
commitments from the Export-Import Bank of the United States (EX-IM Bank)
to support the purchase and financing of two Boeing 737-800 Next
Generation aircraft scheduled for delivery in 2009, as well as preliminary
commitments for 10 additional aircraft scheduled for delivery between 2010
and 2012.
|
Consolidated Financial & Operating
Highlights
|
2Q09
|
|
2Q08
|
% Change
|
1Q08
|
% Change
|
||||||||||||||
RPMs
(millions)
|
1,676 | 1,559 | 7.5 | % | 1,807 | -7.3 | % | |||||||||||||
ASMs
(mm)
|
2,438 | 2,093 | 16.5 | % | 2,430 | 0.3 | % | |||||||||||||
Load
Factor
|
68.7 | % | 74.5 | % |
-5.7
|
p.p. | 74.4 | % |
-5.6
|
p.p. | ||||||||||
Yield
|
15.6 | 18.0 | -13.3 | % | 16.2 | -3.7 | % | |||||||||||||
PRASM
(cents)
|
10.7 | 13.4 | -20.0 | % | 12.1 | -11.0 | % | |||||||||||||
RASM
(cents)
|
11.4 | 14.2 | -20.0 | % | 12.7 | -10.4 | % | |||||||||||||
CASM
(cents)
|
9.9 | 12.7 | -22.5 | % | 9.9 | 0.1 | % | |||||||||||||
CASM
Excl. Fuel (cents)
|
7.1 | 7.8 | -9.1 | % | 6.8 | 3.0 | % | |||||||||||||
Breakeven
Load Factor (2)
|
59.7 | % | 66.4 | % | -6.7 | p.p. | 57.5 | % | 2.2 | p.p. | ||||||||||
Operating
Revenues (US$ 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 | % | |||||||||||||
Operating
Margin
|
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 | % |
Financial
Outlook
(US
GAAP)
|
2009
- Full Year
Revised
|
2009
- Full Year
Prior
|
2008
Actual
|
|||||||||
ASMs
(billion)
|
+/-10.0 | +/-10.0 | 8.8 | |||||||||
Average
Load Factor
|
+/-72 | % | +/-74 | % | 76 | % | ||||||
RASM
(cents)
|
+/-12.2 | +/-12.6. | 14.6 | |||||||||
CASM
Ex-fuel (cents)
|
+/- 7.2 | +/- 7.5 | 7.5 | |||||||||
Operating Margin
|
16-18 | % | 16-18 | % | 17.4 | % |
Unaudited
|
Unaudited
|
%
|
Unaudited
|
%
|
||||||||||||||||
2Q09
|
2Q08
|
Change
|
1Q09
|
Change
|
||||||||||||||||
Copa
Holdings (Consolidated)
|
||||||||||||||||||||
Revenue
passengers carried (thousands)
|
1,270 | 1,168 | 8.7 | % | 1,287 | -1.3 | % | |||||||||||||
Revenue
passengers miles (RPMs) (mm)
|
1,676 | 1,559 | 7.5 | % | 1,807 | -7.3 | % | |||||||||||||
Available
seat miles (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. | ||||||||||
Break-even
load factor
|
0.0 | p.p. | 0.0 | p.p. | ||||||||||||||||
Yield
(cents)
|
15.6 | 18.0 | -13.3 | % | 16.2 | -3.7 | % | |||||||||||||
RASM
(cents)
|
11.4 | 14.2 | -20.0 | % | 12.7 | -10.4 | % | |||||||||||||
CASM
(cents)
|
9.9 | 12.7 | -22.5 | % | 9.9 | 0.1 | % | |||||||||||||
CASM
- excl. fuel (cents)
|
7.1 | 7.8 | -9.1 | % | 6.8 | 3.0 | % | |||||||||||||
Fuel
gallons consumed (mm)
|
33.7 | 29.7 | 13.8 | % | 33.9 | -0.4 | % | |||||||||||||
Average
price of Fuel - Net of Hedges (US$)
|
2.04 | 3.47 | -41.2 | % | 2.16 | -5.5 | % | |||||||||||||
Copa
Segment
|
||||||||||||||||||||
Revenue
passengers miles (RPMs) (mm)
|
1,429 | 1,357 | 5.3 | % | 1,566 | -8.8 | % | |||||||||||||
Available
seat miles (ASMs) (mm)
|
2,045 | 1,732 | 18.1 | % | 2,039 | 0.3 | % | |||||||||||||
Load
factor
|
69.9 | % | 78.3 | % | -8.5 | p.p. | 76.8 | % | -6.9 | p.p. | ||||||||||
Break-even
load factor
|
0.0 | p.p. | 0.0 | p.p. | ||||||||||||||||
Yield
(US$ cents)
|
14.7 | 16.6 | -11.9 | % | 15.5 | -5.4 | % | |||||||||||||
RASM
(cents)
|
10.9 | 13.9 | -21.7 | % | 12.6 | -13.2 | % | |||||||||||||
CASM
(cents)
|
9.5 | 11.9 | -20.2 | % | 9.5 | 0.5 | % | |||||||||||||
CASM
- excl. fuel (cents)
|
6.7 | 7.2 | -7.5 | % | 6.4 | 4.1 | % | |||||||||||||
Fuel
gallons consumed (mm)
|
27.3 | 23.7 | 15.5 | % | 27.5 | -0.7 | % | |||||||||||||
Average
price of Fuel - Net of Hedges (US$)
|
2.12 | 3.38 | -37.3 | % | 2.25 | -5.7 | % | |||||||||||||
Aero
Republica Segment
|
||||||||||||||||||||
Revenue
passengers miles (RPMs) (mm)
|
247 | 202 | 22.1 | % | 241 | 2.6 | % | |||||||||||||
Available
seat miles (ASMs) (mm)
|
393 | 361 | 8.9 | % | 390 | 0.6 | % | |||||||||||||
Load
factor
|
62.8 | % | 62.8 | % | 0.0 | p.p. | 61.6 | % | 1.2 | p.p. | ||||||||||
Break-even
load factor
|
0.0 | p.p. | 0.0 | p.p. | ||||||||||||||||
Yield
(cents)
|
21.2 | 27.3 | -22.5 | % | 20.9 | 1.1 | % | |||||||||||||
RASM
(cents)
|
14.4 | 16.7 | -14.0 | % | 13.8 | 4.4 | % | |||||||||||||
CASM
(cents)
|
12.1 | 17.5 | -30.9 | % | 12.1 | -0.5 | % | |||||||||||||
CASM
- excl.fuel (cents)
|
9.3 | 11.2 | -16.7 | % | 9.3 | 0.6 | % | |||||||||||||
Fuel
gallons consumed (mm)
|
6.4 | 6.0 | 7.0 | % | 6.3 | 0.8 | % | |||||||||||||
Average
price of Fuel - Net of Hedges (US$)
|
1.70 | 3.80 | -55.3 | % | 1.77 | -4.2 | % |
Unaudited
|
Unaudited
|
%
|
Unaudited
|
%
|
||||||||||||||||
2Q09
|
2Q08
|
Change
|
1Q09
|
Change
|
||||||||||||||||
Operating
Revenues
|
||||||||||||||||||||
Passenger
Revenue
|
261,743 | 280,919 | -6.8 | % | 293,152 | -10.7 | % | |||||||||||||
Cargo,
mail and other
|
15,896 | 17,010 | -6.5 | % | 15,604 | 1.9 | % | |||||||||||||
Total
Operating Revenue
|
277,639 | 297,929 | -6.8 | % | 308,756 | -10.1 | % | |||||||||||||
Operating
Expenses
|
||||||||||||||||||||
Aircraft
fuel
|
68,889 | 104,239 | -33.9 | % | 73,472 | -6.2 | % | |||||||||||||
Salaries
and benefits
|
38,223 | 32,553 | 17.4 | % | 36,733 | 4.1 | % | |||||||||||||
Passenger
servicing
|
25,129 | 23,375 | 7.5 | % | 26,019 | -3.4 | % | |||||||||||||
Commissions
|
12,700 | 17,818 | -28.7 | % | 13,223 | -4.0 | % | |||||||||||||
Reservations
and sales
|
13,149 | 14,505 | -9.3 | % | 13,040 | 0.8 | % | |||||||||||||
Maintenance,
material and repairs
|
21,559 | 16,180 | 33.2 | % | 16,860 | 27.9 | % | |||||||||||||
Depreciation
|
11,966 | 10,433 | 14.7 | % | 11,928 | 0.3 | % | |||||||||||||
Flight
operations
|
15,071 | 14,015 | 7.5 | % | 14,935 | 0.9 | % | |||||||||||||
Aircraft
rentals
|
11,487 | 12,012 | -4.4 | % | 12,366 | -7.1 | % | |||||||||||||
Landing
fees and other rentals
|
7,798 | 7,557 | 3.2 | % | 8,376 | -6.9 | % | |||||||||||||
Other
|
14,917 | 14,047 | 6.2 | % | 12,886 | 15.8 | % | |||||||||||||
Total
Operating Expense
|
240,888 | 266,734 | -9.7 | % | 239,838 | 0.4 | % | |||||||||||||
Operating
Income
|
36,751 | 31,195 | 17.8 | % | 68,918 | -46.7 | % | |||||||||||||
Non-operating
Income (Expense):
|
||||||||||||||||||||
Interest
expense
|
(8,520 | ) | (9,815 | ) | -13.2 | % | (8,936 | ) | -4.7 | % | ||||||||||
Interest
capitalized
|
233 | 484 | -51.9 | % | 318 | -26.7 | % | |||||||||||||
Interest
income
|
2,211 | 2,596 | -14.8 | % | 2,563 | -13.7 | % | |||||||||||||
Other,
net
|
27,602 | 9,479 | 191.2 | % | 14,394 | 91.8 | % | |||||||||||||
Total
Non-Operating Income/(Expense)
|
21,526 | 2,744 | 684.6 | % | 8,339 | 158.2 | % | |||||||||||||
Income
before Income Taxes
|
58,277 | 33,938 | 71.7 | % | 77,256 | -24.6 | % | |||||||||||||
Provision
for Income Taxes
|
3,115 | 3,507 | -11.2 | % | 5,641 | -44.8 | % | |||||||||||||
Net Income
|
55,162 | 30,431 | 81.3 | % | 71,615 | -23.0 | % | |||||||||||||
Basic
EPS
|
1.27 | 0.70 | 80.7 | % | 1.67 | -23.7 | % | |||||||||||||
Basic
Shares
|
43,337,693 | 43,194,566 | 0.3 | % | 42,907,967 | 1.0 | % | |||||||||||||
Diluted
EPS
|
1.26 | 0.70 | 80.4 | % | 1.65 | -23.4 | % | |||||||||||||
Diluted
Shares
|
43,684,875 | 43,464,749 | 0.5 | % | 43,463,759 | 0.5 | % |
(US$
Thousands)
|
June
30,
|
March
31,
|
June
30,
|
|||||||||
2009
|
2009
|
2008
|
||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||
ASSETS
|
||||||||||||
Current
Assets:
|
||||||||||||
Cash
and cash equivalents
|
$ | 298,479 | $ | 302,905 | $ | 223,505 | ||||||
Short-term
investments
|
|
87,544 | 92,568 | 86,500 | ||||||||
Total
cash, cash equivalents and short-term investments
|
386,023 | 395,473 | 310,005 | |||||||||
Accounts
receivable, net of allowance for doubtful accounts
|
80,035 | 82,021 | 97,525 | |||||||||
Accounts
receivable from related parties
|
3,218 | 3,169 | 2,108 | |||||||||
Expendable
parts and supplies, net of allowance for obsolescence
|
22,481 | 20,751 | 18,287 | |||||||||
Prepaid
expenses
|
27,207 | 23,270 | 23,173 | |||||||||
Other
current assets
|
3,835 | 5,419 | 23,395 | |||||||||
Total
Current Assets
|
522,799 | 530,103 | 474,493 | |||||||||
Long-term
investments
|
8,293 | 7,652 | 17,730 | |||||||||
Property
and Equipment:
|
||||||||||||
Owned
property and equipment:
|
||||||||||||
Flight
equipment
|
1,428,433 | 1,415,590 | 1,300,486 | |||||||||
Other
equipment
|
59,728 | 57,109 | 53,263 | |||||||||
1,488,161 | 1,472,699 | 1,353,749 | ||||||||||
Less:
Accumulated depreciation
|
(198,324 | ) | (186,222 | ) | (155,915 | ) | ||||||
1,289,837 | 1,286,477 | 1,197,834 | ||||||||||
Purchase
deposits for flight equipment
|
122,364 | 80,674 | 64,567 | |||||||||
Total
Property and Equipment
|
1,412,201 | 1,367,151 | 1,262,401 | |||||||||
Other
Assets:
|
||||||||||||
Net
pension asset
|
1,832 | 1,658 | 1,236 | |||||||||
Goodwill
|
22,588 | 19,038 | 25,355 | |||||||||
Intangible
asset
|
33,119 | 27,913 | 37,177 | |||||||||
Other
assets
|
32,738 | 28,977 | 31,020 | |||||||||
Total
Other Assets
|
90,277 | 77,586 | 94,788 | |||||||||
Total
Assets
|
$ | 2,033,570 | $ | 1,982,493 | $ | 1,849,412 | ||||||
LIABILITIES
AND SHAREHOLDER'S EQUITY
|
||||||||||||
Current
Liabilities:
|
||||||||||||
Current
maturities of long-term debt
|
$ | 157,040 | $ | 114,741 | $ | 100,454 | ||||||
Accounts
payable
|
49,552 | 50,333 | 48,213 | |||||||||
Accounts
payable to related parties
|
6,771 | 7,892 | 9,511 | |||||||||
Air
traffic liability
|
157,056 | 154,469 | 195,579 | |||||||||
Taxes
and interest payable
|
39,346 | 39,746 | 38,208 | |||||||||
Accrued
expenses payable
|
39,902 | 37,418 | 44,599 | |||||||||
Other
current liabilities
|
20,970 | 46,337 | 4,190 | |||||||||
Total
Current Liabilities
|
470,637 | 450,937 | 440,754 | |||||||||
Non-Current
Liabilities:
|
||||||||||||
Long-term
debt
|
791,612 | 812,124 | 795,820 | |||||||||
Post
employment benefits liability
|
2,208 | 2,060 | 1,897 | |||||||||
Other
long-term liabilities
|
11,158 | 9,052 | 10,965 | |||||||||
Deferred
tax liabilities
|
9,839 | 8,135 | 8,375 | |||||||||
Total
Non-Current Liabilities
|
814,817 | 831,371 | 817,057 | |||||||||
Total
Liabilities
|
1,285,454 | 1,282,308 | 1,257,811 | |||||||||
Shareholders'
Equity:
|
||||||||||||
Class
A - 30,416,440 shares issued and outstanding
|
20,858 | 20,858 | 20,761 | |||||||||
Class
B - 12,778,125 shares issued and outstanding
|
8,722 | 8,722 | 8,722 | |||||||||
Additional
paid in capital
|
16,009 | 14,664 | 11,160 | |||||||||
Retained
earnings
|
704,523 | 665,617 | 545,322 | |||||||||
Accumulated
other comprehensive income (loss)
|
(1,996 | ) | (9,676 | ) | 5,636 | |||||||
Total
Shareholders' Equity
|
748,116 | 700,185 | 591,601 | |||||||||
Total
Liabilities and Shareholders' Equity
|
$ | 2,033,570 | $ | 1,982,493 | $ | 1,849,412 |
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 |
(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.
|
Copa Holdings, S.A.
|
||
(Registrant)
|
||
Date:
08/5/2009
|
||
By:
|
/s/ Victor
Vial
|
|
Name:
|
Victor
Vial
|
|
Title:
|
CFO
|