Copa Holdings Reports Financial Results for the Second Quarter of 2022

Rhea-AI Summary

Copa Holdings, S.A. (NYSE: CPA) reported a second quarter 2022 adjusted net profit of US$13.2 million or US$0.32 per share, down from US$50.9 million or US$1.20 in 2Q19. Revenues rose 7.5% to US$693.4 million with passenger revenue up 5.9% and cargo revenue soaring 62.4%. The operating profit stood at US$42.3 million but the operating margin fell to 6.1% from 12.8% in 2Q19. The company holds US$1.1 billion in cash, representing 47% of the last twelve months' revenues.

Positive

• Total revenues increased 7.5% to US$693.4 million compared to 2Q19.
• Cargo revenue surged 62.4% compared to 2Q19.
• Company maintains substantial liquidity with US$1.1 billion in cash.

Negative

• Adjusted net profit decreased 74.1% compared to 2Q19.
• Operating profit dropped 48.8%, resulting in a lower operating margin of 6.1%.

Adjusted Net Profit for the second quarter came in at US$13.2 million, or Adjusted EPS of US$0.32

PANAMA CITY, Panama, Aug. 3, 2022 /PRNewswire/ -- August 3, 2022.  Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the second quarter of 2022 (2Q22). 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 second quarter of 2019 (2Q19) (which the Company believes are more relevant than year-over-year comparisons due to the significant impacts in 2020 and 2021 of the COVID-19 pandemic).

OPERATING AND FINANCIAL HIGHLIGHTS

• Copa Holdings' adjusted net profit, excluding special items, for 2Q22 came in at US$13.2 million or US$0.32 per share, as compared to an adjusted net profit of US$50.9 million or earnings per share of US$1.20 in 2Q19.
• Copa Holdings reported an operating profit of US$42.3 million for the quarter and a 6.1% operating margin, compared to an operating profit of US$82.6 million and an operating margin of 12.8% in 2Q19.
• Total revenues for 2Q22 came in at US$693.4 million, a 7.5% increase compared to 2Q19 revenues. Passenger revenue for 2Q22 was 5.9% higher than 2Q19, while cargo revenue was 62.4% higher than 2Q19. Yields increased 10.1% to 13.0 cents while load factors decreased 0.4 percentage points to 84.8%, compared to 2Q19, resulting in Revenue per Available Seat Mile (RASM) of 11.6 cents, or 11.3% higher than 2Q19.
• Operating cost per available seat mile (CASM) increased 19.9% from 9.1 cents in 2Q19 to 10.9 cents in 2Q22, driven by higher fuel prices. CASM excluding fuel (Ex-fuel CASM) decreased 4.6% in the quarter compared to 2Q19 to 6.0 cents.
• Capacity for 2Q22, measured in terms of available seat miles (ASMs), was 96.6% of the capacity flown in 2Q19.
• Including special items of US$110.9 million, comprised of an unrealized mark-to-market gain related to the Company's convertible notes and an unrealized mark-to-market loss related to changes in the value of financial investments, the Company reported a net profit of US$124.1 million for the quarter or US$3.01 per share.
• The Company ended the quarter with approximately US$1.1 billion in cash, short-term and long-term investments, which represents 47% of the last twelve months' revenues.
• The Company closed the quarter with total debt, including lease liabilities, of US$1.6 billion.
• During the quarter, the Company took delivery of one Boeing 737 MAX 9 aircraft.
• Including three Boeing 737-700 aircraft in temporary storage and one Boeing 737-800 freighter, Copa Holdings ended the quarter with a consolidated fleet of 94 aircraft – 68 Boeing 737-800s, 17 Boeing 737 MAX 9s, and 9 Boeing 737-700s.
• Copa Airlines had an on-time performance for the quarter of 85.9% and a flight completion factor of 99.8%.

 

Consolidated Financial & Operating Highlights	2Q22	2Q19 (3)	Variance vs. 2Q19	1Q22	Variance vs. 1Q22	YTD22	YTD19	Variance vs. YTD19
Revenue Passengers Carried (000s)	2,481	2,550	-2.7 %	2,285	8.6 %	4,765	5,138	-7.3 %
Revenue Passengers OnBoard (000s)	3,796	3,810	-0.4 %	3,476	9.2 %	7,272	7,640	-4.8 %
RPMs (millions)	5,047	5,249	-3.8 %	4,585	10.1 %	9,632	10,594	-9.1 %
ASMs (millions)	5,955	6,166	-3.4 %	5,623	5.9 %	11,578	12,581	-8.0 %
Load Factor	84.8 %	85.1 %	-0.4 p.p.	81.5 %	3.2 p.p.	83.2 %	84.2 %	-1.0 p.p.
Yield (US$ Cents)	13.0	11.8	10.1 %	11.8	10.3 %	12.4	12.0	3.8 %
PRASM (US$ Cents)	11.0	10.1	9.6 %	9.6	14.6 %	10.3	10.1	2.6 %
RASM (US$ Cents)	11.6	10.5	11.3 %	10.2	14.6 %	10.9	10.5	4.4 %
CASM (US$ Cents)	10.9	9.1	19.9 %	9.4	16.7 %	10.2	8.9	14.1 %
CASM Excl. Fuel (US$ Cents)	6.0	6.2	-4.6 %	6.0	0.0 %	6.0	6.2	-3.1 %
Fuel Gallons Consumed (millions)	71.5	79.3	-9.9 %	66.5	7.4 %	138.0	160.5	-14.0 %
Avg. Price Per Fuel Gallon (US$)	4.14	2.22	86.1 %	2.87	44.4 %	3.52	2.15	63.7 %
Average Length of Haul (miles)	2,034	2,058	-1.2 %	2,007	1.4 %	2,021	2,062	-2.0 %
Average Stage Length (miles)	1,273	1,279	-0.4 %	1,298	-1.9 %	1,285	1,289	-0.3 %
Departures	29,369	32,676	-10.1 %	27,190	8.0 %	56,559	66,005	-14.3 %
Block Hours	95,315	106,425	-10.4 %	88,474	7.7 %	183,790	216,515	-15.1 %
Average Aircraft Utilization (hours) (2)	11.5	11.2	2.4 %	11.0	5.0 %	11.2	11.4	-1.8 %
Operating Revenues (US$ millions)	693.4	645.1	7.5 %	571.6	21.3 %	1,265.0	1,317.3	-4.0 %
Operating Profit (Loss) (US$ millions)	42.3	82.6	-48.8 %	44.8	-5.6 %	87.0	195.5	-55.5 %
Operating Margin	6.1 %	12.8 %	-6.7 p.p.	7.8 %	-1.7 p.p.	6.9 %	14.8 %	-8.0 p.p.
Net Profit (Loss) (US$ millions)	124.1	50.9	143.9 %	19.8	527.9 %	143.8	140.3	2.5 %
Adjusted Net Profit (Loss) (US$ millions) (1)	13.2	50.9	-74.1 %	29.5	-55.3 %	42.7	140.3	-69.6 %
Basic EPS (US$)	3.01	1.20	151.4 %	0.47	540.0 %	3.49	3.30	5.7 %
Adjusted Basic EPS (US$) (1)	0.32	1.20	-73.3 %	0.70	-54.5 %	1.04	3.30	-68.7 %
Shares  for calculation of Basic EPS (000s)	41,212	42,478	-3.0 %	42,006	-1.9 %	41,212	42,478	-3.0 %
(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
(3) The Company believes that comparisons with 2019 are more relevant than year-over-year comparisons due to the significant impacts in 2020 of the COVID-19 pandemic.

 

FULL 2Q22 EARNINGS RELEASE AVAILABLE FOR DOWNLOAD AT:

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

2Q22 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST

Date:	August 4, 2022
Time:	11:00 AM US ET (10:00 AM Local Time)
Join by phone:	Join by phone
Webcast (listen-only):	Webcast (listen-only)
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 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.
Income Statement - IFRS
(US$ Thousands)
		Unaudited		Unaudited		%	Unaudited		%	Unaudited		Unaudited		%
		2Q22		2Q19		Change	1Q22		Change	YTD22		YTD19		Change
Operating Revenues
Passenger revenue		656,943		620,538		5.9 %	541,255		21.4 %	1,198,198		1,269,328		-5.6 %
Cargo and mail revenue		26,734		16,464		62.4 %	21,537		24.1 %	48,270		31,780		51.9 %
Other operating revenue		9,718		8,100		20.0 %	8,790		10.6 %	18,508		16,163		14.5 %
Total Operating Revenue		693,394		645,102		7.5 %	571,582		21.3 %	1,264,976		1,317,271		-4.0 %
Operating Expenses
Fuel		295,952		177,169		67.0 %	191,256		54.7 %	487,208		347,332		40.3 %
Wages, salaries, benefits and other employees' expenses		88,995		108,342		-17.9 %	89,759		-0.9 %	178,754		222,004		-19.5 %
Passenger servicing		16,074		25,530		-37.0 %	15,607		3.0 %	31,681		51,101		-38.0 %
Airport facilities and handling charges		47,280		44,698		5.8 %	45,787		3.3 %	93,067		90,060		3.3 %
Sales and distribution		56,222		51,289		9.6 %	46,033		22.1 %	102,255		104,421		-2.1 %
Maintenance, materials and repairs		28,311		31,235		-9.4 %	23,350		21.2 %	51,662		59,282		-12.9 %
Depreciation and amortization		65,337		70,549		-7.4 %	63,303		3.2 %	128,640		138,736		-7.3 %
Flight operations		24,068		25,450		-5.4 %	22,039		9.2 %	46,106		51,325		-10.2 %
Other operating and administrative expenses		28,894		28,240		2.3 %	29,674		-2.6 %	58,568		57,537		1.8 %
Total Operating Expense		651,133		562,502		15.8 %	526,809		23.6 %	1,177,942		1,121,798		5.0 %
Operating Profit/(Loss)		42,261		82,601		-48.8 %	44,774		-5.6 %	87,035		195,474		-55.5 %
Non-operating Income (Expense):
Finance cost		(21,270)		(13,573)		56.7 %	(20,445)		4.0 %	(41,715)		(27,583)		51.2 %
Finance income		3,526		6,041		-41.6 %	2,545		38.6 %	6,071		11,995		-49.4 %
Gain (loss) on foreign currency fluctuations		(6,834)		(2,213)		208.8 %	2,917		-334.2 %	(3,916)		(8,173)		-52.1 %
Net change in fair value of derivatives		113,670		-		-100.0 %	(6,752)		-1783.6 %	106,918		-		-100.0 %
Other non-operating income (expense)		(2,717)		(2,115)		28.5 %	(2,664)		2.0 %	(5,381)		(2,940)		83.0 %
Total Non-Operating Income/(Expense)		86,375		(11,859)		-828.3 %	(24,398)		-454.0 %	61,977		(26,700)		-332.1 %
Profit before taxes		128,636		70,742		81.8 %	20,376		531.3 %	149,012		168,773		-11.7 %
Income tax expense		(4,560)		(19,876)		-77.1 %	(617)		639.5 %	(5,177)		(28,476)		-81.8 %
Net Profit/(Loss)		124,076		50,866		143.9 %	19,759		527.9 %	143,835		140,297		2.5 %
EPS
Basic		3.01		1.20		151.4 %	0.47		540.0 %	3.49		3.30		5.7 %
Shares used for calculation:
Basic		41,211,540		42,478,415		-3.0 %	42,006,022		-1.9 %	41,211,540		42,478,415		-3.0 %

 

 

Copa Holdings, S. A. and subsidiaries
Consolidated statement of financial position
(US$ Thousands)
	June 2022	December 2021
ASSETS	(Unaudited)
Cash and cash equivalents	134,125	211,081
Short-term investments	801,132	806,340
Total cash, cash equivalents and short-term investments	935,257	1,017,421
	-	-
Accounts receivable, net	155,322	90,618
Accounts receivable from related parties	1,767	1,832
Expendable parts and supplies, net	88,980	74,778
Prepaid expenses	42,029	31,148
Prepaid income tax	15,832	16,938
Other current assets	8,127	6,054
	312,057	221,368
TOTAL CURRENT ASSETS	1,247,314	1,238,789
Long-term investments	140,374	199,670
Long-term prepaid expenses	9,785	6,727
Property and equipment, net	2,755,741	2,512,704
Right of use assets	137,339	166,328
Intangible, net	77,302	81,749
Deferred tax assets	29,874	28,196
Other Non-Current Assets	15,045	14,098
TOTAL NON-CURRENT ASSETS	3,165,461	3,009,472
TOTAL ASSETS	4,412,774	4,248,261
LIABILITIES
Loans and borrowings	148,158	196,602
Current portion of lease liability	75,494	73,917
Accounts payable	142,711	112,596
Accounts payable to related parties	27,400	7,948
Air traffic liability	711,135	557,331
Frequent flyer deferred revenue	100,230	95,114
Taxes Payable	43,650	32,600
Employee benefits obligations	29,933	32,767
Income tax payable	4,993	3,835
Other Current Liabilities	592	786
TOTAL CURRENT LIABILITIES	1,284,295	1,113,496
Loans and borrowings long-term	1,350,239	1,229,031
Lease Liability	72,745	104,734
Net Defined Benefit Liability	7,006	7,670
Derivative financial instruments	161,420	268,338
Deferred tax Liabilities	18,919	18,782
Other long - term liabilities	221,480	206,813
TOTAL NON-CURRENT LIABILITIES	1,831,810	1,835,368
TOTAL LIABILITIES	3,116,105	2,948,864
EQUITY	-	-
Class A - 34,012,213  issued and 28,770,135 outstanding	21,326	21,289
Class B - 10,938,125	7,466	7,466
Additional Paid-In Capital	100,945	98,348
Treasury Stock	(326,239)	(176,902)
Retained Earnings	1,367,868	1,324,022
Net profit	143,835	43,844
Other comprehensive loss	(18,531)	(18,670)
TOTAL EQUITY	1,296,669	1,299,397
TOTAL EQUITY LIABILITIES	4,412,774	4,248,261

 

Copa Holdings, S. A. and subsidiaries
Consolidated Statement of Cash Flows
For the six months ended June 30,
(In US$ thousands)
									2022		2021		2020
									(Unaudited)		(Unaudited)		(Unaudited)
Cash flow from (used in) operating activities									327,833		149,669		(56,632)
Cash flow used in investing activities									(262,743)		(119,776)		(48,009)
Cash flow (used in) from financing activities									(142,046)		107,806		253,205
Net (decrease) increase in cash and cash equivalents									(76,956)		137,699		148,564
Cash and cash equivalents at January 1									211,081		119,065		158,733
Cash and cash equivalents at June 30									$               134,125		$               256,764		$               307,297
Short-term investments									801,132		925,680		740,887
Long-term investments									140,374		99,235		95,540
Total cash and cash equivalents and investments at June 30									$            1,075,631		$            1,281,679		$            1,143,724

 

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 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 Operating Profit
and Adjusted Net Profit		2Q22		2Q21		1Q22		2Q19
Operating Profit as Reported		$     42,261		$       8,736		$     44,774		$     82,601
Subtract: Unredeemed Ticket Revenue provision reversal				$   (10,395)
Adjusted Operating Profit		$     42,261		$     (1,659)		$     44,774		$     82,601
Net Profit as Reported		$   124,076		$     28,073		$     19,759		$     50,866
Subtract: Unredeemed Ticket Revenue provision reversal				$   (10,395)
Add: Net change in fair value of derivatives		$ (113,670)		$   (33,898)		$       6,752
Add: Net change in fair value of financial investments		$       2,761				$       2,979
Adjusted Net Profit		$     13,168		$   (16,220)		$     29,490		$     50,866
Reconciliation of Adjusted Basic EPS		2Q22		2Q21		1Q22		2Q19
Adjusted Net Profit		$     13,168		$   (16,220)		$     29,490		$     50,866
Shares used for calculation of Basic EPS		41,212		42,651		42,006		42,478
Adjusted Basic Earnings per share (Adjusted Basic EPS)		$         0.32		$       (0.38)		$         0.70		$         1.20
Reconciliation of Operating Costs per ASM
Excluding Fuel (CASM Excl. Fuel)		2Q22		2Q21		1Q22		2Q19
Operating Costs per ASM as Reported (in US$ Cents)		10.9		9.0		9.4		9.1
Aircraft Fuel Cost per ASM  (in US$ Cents)		5.0		2.5		3.4		2.9
Operating Costs per ASM excluding fuel (in US$ Cents)		6.0		6.6		6.0		6.2

 

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SOURCE Copa Holdings, S.A.

FAQ

What were Copa Holdings' earnings for the second quarter of 2022?

Copa Holdings reported adjusted earnings of US$13.2 million, or US$0.32 per share.

How did Copa Holdings' revenue perform in Q2 2022?

The company's total revenue for Q2 2022 was US$693.4 million, a 7.5% increase from Q2 2019.

What is Copa Holdings’ operating profit and margin for Q2 2022?

Copa Holdings' operating profit was US$42.3 million with an operating margin of 6.1%.

What is the cash position of Copa Holdings as of Q2 2022?

Copa Holdings ended Q2 2022 with approximately US$1.1 billion in cash and investments, representing 47% of the last twelve months' revenues.

How does Copa Holdings' adjusted net profit in Q2 2022 compare to previous years?

The adjusted net profit of US$13.2 million is significantly lower, down 74.1% from US$50.9 million in Q2 2019.