Copa Holdings Reports Financial Results for the First Quarter of 2021

Rhea-AI Summary

Copa Holdings, S.A. (NYSE: CPA) reported a net loss of US$110.7 million for 1Q21, equating to US$2.60 per share. Excluding special items, the adjusted loss stands at US$95.1 million or US$2.23 per share. The operating loss reached US$77.1 million, with an average cash consumption of US$23 million per month. The company ended the quarter with US$1.5 billion in liquidity. Flight operations peaked at 39% of pre-pandemic levels (1Q19), with an operating revenue decrease of 68.8% year-over-year.

Positive

• Copa Holdings ended 1Q21 with US$1.5 billion in available liquidity, providing financial cushion.
• On-time performance of 95.0% and flight-completion factor of 99.3% indicates operational reliability.

Negative

• Reported a net loss of US$110.7 million, marking a 249.1% decline compared to 1Q20.
• Operating revenue fell by 68.8% year-over-year to US$185.7 million.
• Load factor decreased by 12.3 percentage points to 69.2% compared to 1Q20.

PANAMA CITY, Panama, May 5, 2021 /PRNewswire/ -- Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the first quarter of 2021 (1Q21). 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 first quarter of 2021 (1Q21).

OPERATING AND FINANCIAL HIGHLIGHTS

• Copa Holdings reported a net loss of US$110.7 million for the quarter, or US$2.60 per share.  Excluding special items, the Company would have reported a net loss of US$95.1 million, or US$2.23 per share.  Special items for the quarter include a US$15.7 million unrealized mark-to-market loss related to the Company's convertible notes.
• Copa Holdings reported an operating loss of US$77.1 million for the quarter.
• Cash consumption, defined as cash disbursements less proceeds, excluding extraordinary financing activities and asset sales but including capital expenditures and payment of financial obligations, averaged approximately US$23 million per month during the quarter. 
• The Company ended the quarter with US$1.5 billion of available liquidity, consisting of approximately US$1.2 billion in cash, short-term and long-term investments, and committed and undrawn credit facilities of US$345 million.
• The Company closed the quarter with total debt, including lease liabilities, of US$1.7 billion.
• The Company's flight operations, measured in terms of available seat miles (ASMs), represented approximately 39% of those in the same period in 2019.
• During the quarter, 4 Embraer 190 aircraft exited the fleet as part of a previously agreed sale to a third party.  As of March 31, 2021, there were 4 remaining Embraer 190 aircraft sold that are expected to leave during the second quarter. 
• During the quarter, the Company took delivery of 6 Boeing 737 MAX 9.  Excluding the aircraft classified as assets held for sale, and including aircraft in temporary storage, Copa Holdings ended the quarter with a consolidated fleet of 81 aircraft – 68 Boeing 737-800s and 13 Boeing 737 MAX 9s, compared to a total fleet of 102 aircraft at the end of the first quarter of 2020.
• During the quarter, Copa Airlines had an on-time performance of 95.0% and a flight-completion factor of 99.3%, once again positioning itself among the best in the industry.

Subsequent Events

• In April, the Company delivered 1 Embraer 190 aircraft, out of 14 that were sold to a third party.

 

Consolidated Financial & Operating Highlights	1Q21	1Q20	Variance vs. 1Q20	4Q20	Variance vs. 4Q20	1Q19	Variance vs. 1Q19
Revenue Passengers Carried (000s)	924	2,118	-56.4%	681	35.6%	2,620	-64.7%
RPMs (millions)	1,716	4,473	-61.6%	1,259	36.3%	5,345	-67.9%
ASMs (millions)	2,481	5,491	-54.8%	1,684	47.3%	6,415	-61.3%
Load Factor	69.2%	81.5%	-12.3 p.p.	74.8%	-5.6 p.p.	83.3%	-14.1 p.p.
Yield (US$ Cents)	10.1	12.8	-21.5%	11.7	-13.9%	12.1	-16.9%
PRASM (US$ Cents)	7.0	10.5	-33.3%	8.8	-20.4%	10.1	-31.0%
RASM (US$ Cents)	7.5	10.8	-31.0%	9.4	-20.6%	10.5	-28.6%
CASM (US$ Cents)	10.6	9.0	17.1%	15.1	-29.7%	8.7	21.5%
CASM Excl. Fuel (US$ Cents)	8.5	6.6	30.1%	13.4	-36.3%	6.1	40.5%
Fuel Gallons Consumed (millions)	29.08	70.02	-58.5%	20.75	40.1%	81.2	-64.2%
Avg. Price Per Fuel Gallon (US$)	1.75	1.95	-9.9%	1.41	24.2%	2.09	-15.9%
Average Length of Haul (miles)	1,858	2,112	-12.0%	1,849	0.5%	2,040	-8.9%
Average Stage Length (miles)	1,256	1,308	-3.9%	1,211	3.7%	1,299	-3.3%
Departures	12,372	28,286	-56.3%	8,795	40.7%	33,329	-62.9%
Block Hours	38,851	93,568	-58.5%	26,870	44.6%	110,089	-64.7%
Average Aircraft Utilization (hours) (2)	6.6	10.7	-38.6%	5.2	26.8%	12	-43.9%
Operating Revenues (US$ millions)	185.7	595.5	-68.8%	158.6	17.0%	672.2	-72.4%
Operating Profit (Loss) (US$ millions)	-77.1	98.7	-178.1%	-95.1	-18.9%	112.9	-168.3%
Adjusted Operating Profit (Loss) (US$ millions) (1)	-77.1	98.7	-178.1%	-91.5	-15.8%	112.9	-168.3%
Operating Margin	-41.5%	16.6%	-58.1 p.p.	-59.9%	18.4 p.p.	16.8%	-58.3 p.p.
Adjusted Operating Margin (1)	-41.5%	16.6%	-58.1 p.p.	-57.7%	16.2 p.p.	16.8%	-58.3 p.p.
Net Profit (Loss) (US$ millions)	-110.7	74.3	-249.1%	-177.3	-37.5%	89.4	-223.8%
Adjusted Net Profit (Loss) (US$ millions) (1)	-95.1	74.3	-228.0%	-85.2	11.6%	89.4	-206.3%
Basic EPS (US$)	-2.60	1.75	-248.8%	-4.17	-37.6%	2.11	-223.5%
Adjusted Basic EPS (US$) (1)	-2.23	1.75	-227.8%	-2.00	11.4%	2.11	-206.1%
Shares for calculation of Basic EPS (000s)	42,571	42,501	0.2%	42,511	0.1%	42,478	0.2%
(1) Excludes Special Items.  This earnings release includes a reconciliation of non-IFRS financial measures to the comparable IFRS measures.
(2) Average Aircraft Utilization is calculated based on the Company's active fleet, excluding aircraft in storage as well as those classified as assets held for sale.

FULL 1Q21 EARNINGS RELEASE AVAILABLE FOR DOWNLOAD AT:

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

1Q21 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST

Date:	May 6, 2021
Time:	11:00 AM US ET (10:00 AM Local Time)
Conference telephone number:	877-293-5456 (US Domestic Callers)
	707-287-9357 (International Callers)
Webcast:	https://copa.gcs-web.com/events-and-presentations
Speakers:	Pedro Heilbron, Chief Executive Officer
	José Montero, Chief Financial Officer

 

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 80 destinations in 33 countries in North, Central and South America and the Caribbean. For more information visit: www.copa.com. 

CONTACT: Copa Holdings S.A.
Investor Relations:
Ph: 011 507 304-2774
www.copa.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 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		%
		1Q21		1Q20		Change		4Q20		Change		1Q19		Change
Operating Revenues
Passenger revenue		173,095		574,650		-69.9%		147,535		17.3%		648,790		-73.3%
Cargo and mail revenue		7,956		13,017		-38.9%		7,243		9.9%		15,316		-48.1%
Other operating revenue		4,626		7,785		-40.6%		3,858		19.9%		8,063		-42.6%
Total Operating Revenue		185,677		595,453		-68.8%		158,636		17.0%		672,169		-72.4%
Operating Expenses
Fuel		51,308		136,954		-62.5%		28,346		81.0%		170,163		-69.8%
Wages, salaries, benefits and other employees' expenses		54,575		110,289		-50.5%		63,599		-14.2%		113,662		-52.0%
Passenger servicing		5,586		21,890		-74.5%		4,180		33.6%		25,571		-78.2%
Airport facilities and handling charges		22,044		40,365		-45.4%		16,914		30.3%		45,362		-51.4%
Sales and distribution		21,652		42,011		-48.5%		18,646		16.1%		53,133		-59.2%
Maintenance, materials and repairs		19,727		27,144		-27.3%		33,221		-40.6%		28,047		-29.7%
Depreciation and amortization		59,450		66,375		-10.4%		67,850		-12.4%		68,187		-12.8%
Flight operations		9,410		23,731		-60.3%		5,925		58.8%		25,875		-63.6%
Other operating and administrative expenses		19,006		28,008		-32.1%		15,011		26.6%		29,297		-35.1%
Total Operating Expense		262,759		496,766		-47.1%		253,693		3.6%		559,296		-53.0%
Operating Profit (Loss)		(77,081)		98,687		-178.1%		(95,057)		-18.9%		112,873		-168.3%
Non-operating Income (Expense):
Finance cost		(17,818)		(11,085)		60.7%		(18,360)		-3.0%		(14,010)		27.2%
Finance income		2,853		6,320		-54.9%		3,571		-20.1%		5,954		-52.1%
Net change in fair value of derivatives		(15,663)		-		n/m		(88,532)		-82.3%		-		n/m
Gain (loss) on foreign currency fluctuations		(1,809)		(10,950)		-83.5%		2,361		-176.6%		(5,960)		-69.6%
Other non-operating income (expense)		(976)		(11)		n/m		1,026		-195.2%		(825)		18.4%
Total Non-Operating Income/(Expense)		(33,412)		(15,726)		112.5%		(99,934)		-66.6%		(14,841)		125.1%
Profit (Loss) before taxes		(110,494)		82,961		-233.2%		(194,991)		-43.3%		98,032		-212.7%
Income tax expense		239		8,687		-97.2%		(17,731)		-101.3%		8,600		-97.2%
Net Profit (Loss)		(110,733)		74,273		-249.1%		(177,261)		-37.5%		89,431		-223.8%
EPS
Basic		-2.60		1.75		-248.8%		-4.17		-37.6%		2.11		-223.5%
Shares used for calculation:
Basic		42,570,983		42,501,338				42,510,573				42,477,761

 

Copa Holdings, S. A. and subsidiaries
Consolidated statement of financial position
(US$ Thousands)	March	December
	2021	2020
	(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents	193,801	119,065
Short-term investments	898,453	770,816
Total cash, cash equivalents and short-term investments	1,092,254	889,881
Accounts receivable, net	68,436	63,206
Accounts receivable from related parties	1,042	1,429
Expendable parts and supplies, net	72,992	74,319
Prepaid expenses	27,556	30,473
Prepaid income tax	16,189	16,716
Other current assets	6,908	7,805
	193,123	193,948
Assets held for sale	115,303	135,542
TOTAL CURRENT ASSETS	1,400,679	1,219,371
Long-term investments	111,001	119,617
Long-term accounts receivable	1,054	1,054
Long-term prepaid expenses	5,680	6,066
Property and equipment, net	2,215,264	2,147,486
Right of use assets	193,553	214,279
Intangible, net	91,316	95,568
Deferred tax assets	35,413	35,595
Other Non-Current Assets	13,917	14,348
TOTAL NON-CURRENT ASSETS	2,667,199	2,634,013
TOTAL ASSETS	4,067,878	3,853,385
LIABILITIES
Loans and borrowings	157,393	127,946
Current portion of lease liability	81,309	83,605
Accounts payable	75,917	63,461
Accounts payable to related parties	4,538	2,970
Air traffic liability	475,084	470,695
Frequent flyer deferred revenue	92,992	91,213
Taxes Payable	18,267	13,400
Employee benefits obligations	28,912	33,995
Income tax payable	1,422	1,023
Other Current Liabilities	197	252
TOTAL CURRENT LIABILITIES	936,033	888,561
Loans and borrowings long-term	1,308,987	1,035,954
Lease Liability	126,436	146,905
Net employee defined benefit liabilities	14,524	14,332
Derivative financial instruments	261,223	245,560
Deferred tax Liabilities	20,862	22,190
Other long - term liabilities	225,642	216,325
TOTAL NON-CURRENT LIABILITIES	1,957,673	1,681,265
TOTAL LIABILITIES	2,893,705	2,569,825
EQUITY
Issued Capital
Class A - 33,998,370 issued and 31,543,037 outstanding	21,282	21,199
Class B common stock - 10,938,125	7,466	7,466
Additional Paid-In Capital	92,608	91,341
Treasury Stock	(136,388)	(136,388)
Retained Earnings	1,324,025	1,931,086
Net (loss) profit	(110,733)	-                 607,062
Other comprehensive loss	(24,086)	(24,082)
TOTAL EQUITY	1,174,173	1,283,560
TOTAL EQUITY & LIABILITIES	4,067,878	3,853,385

Copa Holdings, S. A. and subsidiaries
Consolidated Statement of Cash Flows
For the three months ended March 31,
(In US$ thousands)
										2021		2020		2019
										(Unaudited)		(Unaudited)		(Unaudited)
Cash flow (used in) from operating activities										(892)		106,340		144,061
Cash flow (used in) from  investing activities										(86,697)		19,795		(3,591)
Cash flow from (used in) financing activities										162,325		55,058		(84,361)
Net increase in cash and cash equivalents										74,736		181,193		56,109
Cash and cash equivalents at January 1										119,065		158,732		156,158
Cash and cash equivalents at March 31										$               193,801		$               339,925		$               212,267
Short-term investments										898,453		672,721		556,127
Long-term investments										111,001		114,277		128,992
Total cash and cash equivalents and investments at March 31										$            1,203,255		$            1,126,923		$               897,386

 

Copa Holdings, S.A.

NON-IFRS FINANCIAL MEASURE RECONCILIATION

This press release includes the following non-IFRS financial measures: Adjusted Operating Profit, Adjusted Net Profit, Adjusted Basic EPS and Monthly Cash Consumption. 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 Operating Profit
and Adjusted Net Profit		1Q21		1Q20		4Q20		1Q19
Operating Profit as Reported		$        (77,081)		$          98,687		$        (95,057)		$        112,873
Add: Fleet Impairment charges						$            4,400
Add: Expected loss (gain) on Embraer assets held for sale						$             (877)
Adjusted Operating Profit		$        (77,081)		$          98,687		$        (91,533)		$        112,873
Net Profit as Reported		$      (110,733)		$          74,273		$      (177,261)		$          89,431
Add: Fleet Impairment charges						$            4,400
Add: Expected loss (gain) on Embraer assets held for sale						$             (877)
Add: Net change in fair value of derivatives		$          15,663				$          88,532
Adjusted Net Profit		$        (95,070)		$          74,273		$        (85,204)		$          89,431
Reconciliation of Adjusted Basic EPS		1Q21		1Q20		4Q20		1Q19
Adjusted Net Profit		$        (95,070)		$          74,273		$        (85,204)		$          89,431
Shares used for calculation of Basic EPS		42,571		42,501		42,511		42,478
Adjusted Basic Earnings per share (Adjusted Basic EPS)		$            (2.23)		$              1.75		$            (2.00)		$              2.11
Reconciliation of Monthly Cash Consumption for 2020 and 2021		1Q21		4Q20		3Q20		2Q20
Beginning Cash balance		$            1,009		$            1,006		$            1,143		$            1,127
Ending Cash balance		$            1,203		$            1,009		$            1,006		$            1,143
Net cashflows in the quarter		$               194		$                   4		$             (137)		$                 16
Subtract: Proceeds from Convertible Notes Offering		$                 -		$                 -		$                 -		$               343
Subtract: Net Proceeds from new Aircraft Financing		$               241		$                 -		$                 -		$                 -
Subtract: Others proceeds (assets sold and other non-op proceeds)		$                 20		$                 23		$                 22		$                 -
Add: Repayment of short term credit lines		$                 -		$                 -		$                 50		$                 95
Cash Consumption excluding extraordinary activities		$               (68)		$               (19)		$             (109)		$             (232)
Monthly Cash Consumption excluding extraordinary  activities		$               (23)		$                 (6)		$               (36)		$               (77)

 

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SOURCE Copa Holdings, S.A.

FAQ

What were Copa Holdings' earnings results for 1Q21?

Copa Holdings reported a net loss of US$110.7 million or US$2.60 per share for 1Q21.

How did Copa Holdings' operating revenue perform in 1Q21?

Copa Holdings' operating revenue decreased by 68.8% to US$185.7 million in 1Q21 compared to the previous year.

What is the impact of Copa Holdings' cash consumption in 1Q21?

Copa Holdings had an average cash consumption of approximately US$23 million per month in 1Q21.

How did Copa Holdings' flight operations compare to 2019?

In 1Q21, Copa Holdings' flight operations were approximately 39% of those in the same period of 2019.