Copa Holdings Reports Financial Results for the Second Quarter of 2024

Rhea-AI Summary

Copa Holdings reported a net profit of US$120.3 million for Q2 2024, or US$2.88 per share. The company's operating profit was US$159.5 million with an operating margin of 19.5%. Passenger traffic increased by 10.6% compared to Q2 2023, while capacity increased by 9.7%. The load factor improved by 0.7 percentage points to 86.8%.

Total revenues for Q2 2024 increased by 1.3% to US$819.4 million. The company ended the quarter with approximately US$1.2 billion in cash and investments, representing 35% of the last twelve months' revenues. Copa Airlines achieved an on-time performance of 87.6% and a flight completion factor of 99.7%.

Positive

• Net profit of US$120.3 million for Q2 2024
• Passenger traffic increased by 10.6% compared to Q2 2023
• Load factor improved to 86.8%
• Total revenues increased by 1.3% to US$819.4 million
• Strong liquidity with US$1.2 billion in cash and investments
• Excellent operational performance with 87.6% on-time performance and 99.7% flight completion factor

Negative

• Operating profit decreased by 18.1% compared to Q2 2023
• Operating margin declined by 4.6 percentage points to 19.5%
• Revenue per available seat mile (RASM) decreased by 7.7%
• Passenger yields decreased by 8.7%
• Temporary suspension of flights between Venezuela and Panama

Insights

Financial Analyst

Copa Holdings' Q2 2024 results show a mixed performance. The company reported a net profit of $120.3 million, or $2.88 per share, with an operating margin of 19.5%. While these figures are solid, they represent a decline from the same period last year.

Key positives include a 10.6% increase in passenger traffic and improved load factor. However, the 7.7% decrease in RASM and 8.7% drop in passenger yields are concerning, indicating pricing pressures. The company's cost control efforts are noteworthy, with Ex-fuel CASM decreasing by 5.8%.

The balance sheet remains strong with $1.2 billion in cash and investments, representing 35% of last twelve months' revenues. The low Adjusted Net Debt to EBITDA ratio of 0.6x suggests financial stability.

Aviation Industry Expert

Copa's operational performance remains impressive, with an on-time performance of 87.6% and a flight completion factor of 99.7%. The expansion of their fleet with three new Boeing 737 MAX 9 aircraft demonstrates ongoing investment in modernization and capacity growth.

However, the suspension of flights between Venezuela and Panama is a significant development that could impact future results. Venezuela has been a key market for Copa and this suspension, even if temporary, may affect revenues and network efficiency.

The recognition by Skytrax as the "Best Airline in Central America and the Caribbean" for the ninth consecutive year underscores Copa's strong brand and service quality in the region. This could help maintain customer loyalty despite competitive pressures on yields.

PANAMA CITY, Aug. 7, 2024 /PRNewswire/ -- Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the second quarter of 2024 (2Q24). 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 2023 (2Q23).

OPERATING AND FINANCIAL HIGHLIGHTS

• Copa Holdings reported a net profit of US$120.3 million for 2Q24 or US$2.88 per share. The Company reported an operating profit of US$159.5 million and an operating margin of 19.5%.
• Passenger traffic for 2Q24, measured in terms of revenue passenger miles (RPMs), increased by 10.6% compared to 2Q23 while capacity, measured in available seat miles (ASMs), increased by 9.7%. As a result, the load factor for the quarter increased by 0.7 percentage points to 86.8% compared to 2Q23.
• Operating cost per available seat mile excluding fuel (Ex-fuel CASM) decreased by 5.8% in the quarter to 5.6 cents when compared to 2Q23, mainly driven by lower maintenance, materials and repair costs as well as lower sales and distribution costs.
• Revenue per available seat mile (RASM) decreased by 7.7% to 11.0 cents compared to 2Q23, driven by an 8.7% decrease in passenger yields. Total revenues for 2Q24 increased by 1.3% to US$819.4 million.
• The Company ended the quarter with approximately US$1.2 billion in cash, short-term and long-term investments, which represent 35% of the last twelve months' revenues.
• The Company closed the quarter with total debt, including lease liabilities, of US$1.8 billion, while our Adjusted Net Debt to EBITDA ratio ended at 0.6 times.
• During the quarter, the Company took delivery of three Boeing 737 MAX 9 aircraft, ending the quarter with a consolidated fleet of 109 aircraft – 67 Boeing 737-800s, 32 Boeing 737 MAX 9s, 9 Boeing 737-700s, and 1 Boeing 737-800 freighter.
• Copa Airlines had an on-time performance for the quarter of 87.6% and a flight completion factor of 99.7%, once again positioning itself among the very best in the industry.

Subsequent Events

• In July, Copa Airlines was recognized by Skytrax – for the ninth consecutive year – as the "Best Airline in Central America and the Caribbean."
• In July, the Company took delivery of its first Boeing 737 MAX 8, increasing its total fleet to 110 aircraft.
• On July 29, the Government of Venezuela temporarily suspended commercial flights between Venezuela and Panama effective July 31^st, forcing the Company to suspend its flights between the two countries. As of the date hereof, the official notice mandates the suspension of flights until August 31^st.
• Copa Holdings will make its third dividend payment of the year of US$1.61 per share on September 13, 2024, to all Class A and Class B shareholders on record as of August 30, 2024.

 

Consolidated Financial  & Operating Highlights	2Q24	2Q23	Variance Vs 2Q23	1Q24	Variance Vs 1Q24	YTD24	YTD23	Variance Vs YTD23
Revenue Passengers Carried (000s)	3,303	2,980	10.8 %	3,272	0.9 %	6,575	5,860	12.2 %
Revenue Passengers OnBoard (000s)	4,970	4,469	11.2 %	4,790	3.7 %	9,760	8,764	11.4 %
RPMs (millions)	6,446	5,826	10.6 %	6,127	5.2 %	12,573	11,550	8.9 %
ASMs (millions)	7,424	6,767	9.7 %	7,121	4.2 %	14,545	13,363	8.8 %
Load Factor	86.8 %	86.1 %	0.7 p.p	86.0 %	0.8 p.p	86.4 %	86.4 %	0.0 p.p
Yield (US$ Cents)	12.1	13.3	(8.7) %	14.0	(13.5) %	13.0	13.9	(6.3) %
PRASM (US$ Cents)	10.5	11.4	(7.9) %	12.1	(12.7) %	11.3	12.0	(6.3) %
RASM (US$ Cents)	11.0	12.0	(7.7) %	12.5	(12.0) %	11.8	12.5	(6.1) %
CASM (US$ Cents)	8.9	9.1	(2.1) %	9.5	(6.6) %	9.2	9.6	(4.6) %
CASM Excl. Fuel (US$ Cents)	5.6	5.9	(5.8) %	6.1	(8.1) %	5.8	6.1	(3.9) %
Fuel Gallons Consumed (millions)	87.6	79.9	9.6 %	84.4	3.7 %	172.0	158.1	8.8 %
Avg. Price Per Fuel Gallon (US$)	2.79	2.65	5.2 %	2.90	(3.7) %	2.84	3.00	(5.4) %
Average Length of Haul (miles)	1,952	1,955	(0.2) %	1,873	4.2 %	1,912	1,971	(3.0) %
Average Stage Length (miles)	1,253	1,260	(0.5) %	1,246	0.6 %	1,249	1,270	(1.6) %
Departures	36,313	33,385	8.8 %	35,220	3.1 %	71,533	65,369	9.4 %
Block Hours	116,062	107,055	8.4 %	112,164	3.5 %	228,226	211,681	7.8 %
Average Aircraft Utilization (hours)	11.9	11.8	0.3 %	11.6	2.0 %	11.7	11.9	(0.9) %
Operating Revenues (US$ millions)	819.4	809.2	1.3 %	893.5	(8.3) %	1,712.9	1,676.5	2.2 %
Operating Profit (Loss) (US$ millions)	159.5	194.7	(18.1) %	216.0	(26.1) %	375.5	387.9	(3.2) %
Operating Margin	19.5 %	24.1 %	-4.6 p.p	24.2 %	-4.7 p.p	21.9 %	23.1 %	-1.2 p.p
Net Profit (Loss) (US$ millions)	120.3	17.5	586.8 %	176.1	(31.7) %	296.3	139.0	113.1 %
Adjusted Net Profit (Loss) (US$ millions) (1)	120.3	154.5	(22.2) %	176.1	(31.7) %	296.3	312.3	(5.1) %
Basic EPS (US$)	2.88	0.44	549.4 %	4.19	(31.1) %	7.07	3.52	101.0 %
Adjusted Basic EPS (US$) (1)	2.88	3.92	(26.4) %	4.19	(31.1) %	7.07	7.90	(10.5) %
Shares for calculation of Basic EPS (000s)	41,715	39,444	5.8 %	42,052	(0.8) %	41,883	39,504	6.0 %

(1)  Excludes Special Items. This earnings release includes a reconciliation of non-IFRS financial measures to the comparable IFRS measures.

FULL 2Q24 EARNINGS RELEASE AVAILABLE FOR DOWNLOAD AT:

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

2Q24 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST

Date:	August 8, 2024
Time:	11:00 AM US ET (11:00 AM Local Time)
Join by phone:	https://register.vevent.com/register/BIaa69ad95e8754597ac5a227df82cb25e
Webcast (listen-only):	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 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. and Subsidiaries 
Consolidated statement of profit or loss 
(In US$ thousands)

		Unaudited		Unaudited		%	Unaudited		%		Unaudited		Unaudited	%
		2Q24		2Q23		Change	1Q24		Change		YTD24		YTD23	Change
Operating Revenues
Passenger revenue		781,497		773,781		1.0 %	858,725		(9.0 %)		1,640,222		1,607,798	2.0 %
Cargo and mail revenue		25,184		23,888		5.4 %	21,910		14.9 %		47,095		47,140	(0.1 %)
Other operating revenue		12,722		11,521		10.4 %	12,831		(0.9 %)		25,553		21,516	18.8 %
Total Operating Revenue		819,403		809,190		1.3 %	893,467		(8.3 %)		1,712,870		1,676,454	2.2 %
Operating Expenses
Fuel		246,011		214,121		14.9 %	245,352		0.3 %		491,363		479,619	2.4 %
Wages, salaries, benefits and other employees' expenses		114,878		105,788		8.6 %	114,314		0.5 %		229,193		208,441	10.0 %
Passenger servicing		27,579		21,460		28.5 %	29,684		(7.1 %)		57,263		41,852	36.8 %
Airport facilities and handling charges		62,768		54,146		15.9 %	60,347		4.0 %		123,115		104,625	17.7 %
Sales and distribution		52,210		56,596		(7.8 %)	55,494		(5.9 %)		107,704		118,002	(8.7 %)
Maintenance, materials and repairs		10,883		31,430		(65.4 %)	25,627		(57.5 %)		36,510		71,726	(49.1 %)
Depreciation and amortization		79,462		74,818		6.2 %	83,365		(4.7 %)		162,827		147,494	10.4 %
Flight operations		31,914		25,005		27.6 %	31,029		2.9 %		62,944		52,429	20.1 %
Other operating and administrative expenses		34,190		31,158		9.7 %	32,270		6.0 %		66,461		64,387	3.2 %
Total Operating Expense		659,896		614,523		7.4 %	677,482		(2.6 %)		1,337,378		1,288,576	3.8 %
Operating Profit/(Loss)		159,507		194,667		(18.1 %)	215,985		(26.1 %)		375,492		387,878	(3.2 %)
Non-operating Income (Expense):
Finance cost		(20,632)		(30,517)		(32.4 %)	(18,840)		9.5 %		(39,472)		(54,882)	(28.1 %)
Finance income		13,537		11,970		13.1 %	13,746		(1.5 %)		27,284		20,812	31.1 %
Gain (loss) on foreign currency fluctuations		(16,097)		3,712		(533.6 %)	(3,914)		311.3 %		(20,010)		4,914	(507.2 %)
Net change in fair value of derivatives		2,533		(137,473)		(101.8 %)	(8)		— %		2,525		(175,406)	(101.4 %)
Other non-operating income (expense)		1,766		925		90.9 %	(112)		(1679.9 %)		1,654		2,160	(23.4 %)
Total Non-Operating Income/(Expense)		(18,892)		(151,382)		(87.5 %)	(9,127)		107.0 %		(28,019)		(202,402)	(86.2 %)
Profit before taxes		140,615		43,284		224.9 %	206,858		(32.0 %)		347,472		185,476	87.3 %
Income tax expense		(20,362)		(25,775)		(21.0 %)	(30,792)		(33.9 %)		(51,154)		(46,447)	10.1 %
Net Profit/(Loss)		120,253		17,509		586.8 %	176,066		(31.7 %)		296,318		139,030	113.1 %

 

Copa Holdings, S. A. and Subsidiaries 
Consolidated statement of financial position 
(In US$ thousands)

		June 2024		December 2023
ASSETS		(Unaudited)		(Audited)
Cash and cash equivalents		200,635		206,375
Short-term investments		748,239		708,809
Total cash, cash equivalents and short-term investments		948,874		915,184
Accounts receivable, net		186,902		156,720
Accounts receivable from related parties		2,637		2,527
Expendable parts and supplies, net		116,578		116,604
Prepaid expenses		44,134		44,635
Prepaid income tax		98		66
Other current assets		21,375		32,227
		371,723		352,780
TOTAL CURRENT ASSETS		1,320,598		1,267,963
Long-term investments		258,379		258,934
Long-term prepaid expenses		7,766		9,633
Property and equipment, net		3,326,243		3,238,632
Right of use assets		341,009		281,146
Intangible, net		92,715		87,986
Net defined benefit assets		6,204		5,346
Deferred tax assets		21,497		30,148
Other Non-Current Assets		16,821		17,048
TOTAL NON-CURRENT ASSETS		4,070,634		3,928,872
TOTAL ASSETS		5,391,232		5,196,836
LIABILITIES
Loans and borrowings		226,513		222,430
Current portion of lease liability		59,743		68,304
Accounts payable		193,427		182,303
Accounts payable to related parties		3,913		1,228
Air traffic liability		640,643		611,856
Frequent flyer deferred revenue		127,024		124,815
Taxes Payable		53,642		44,210
Accrued expenses payable		41,417		64,940
Income tax payable		6,630		26,741
Other Current Liabilities		737		1,403
TOTAL CURRENT LIABILITIES		1,353,688		1,348,229
Loans and borrowings long-term		1,241,684		1,240,261
Lease Liability		296,402		215,353
Deferred tax Liabilities		47,457		36,369
Other long - term liabilities		216,512		234,474
TOTAL NON-CURRENT LIABILITIES		1,802,054		1,726,457
TOTAL LIABILITIES		3,155,742		3,074,685
EQUITY
Class A - 34,185,954 issued and 30,654,620 outstanding		23,244		23,201
Class B - 10,938,125		7,466		7,466
Additional Paid-In Capital		211,260		209,102
Treasury Stock		(254,532)		(204,130)
Retained Earnings		1,961,060		1,581,739
Net profit		296,318		514,098
Other comprehensive loss		(9,326)		(9,326)
TOTAL EQUITY		2,235,490		2,122,150
TOTAL EQUITY LIABILITIES		5,391,232		5,196,836

 

Copa Holdings, S. A. and Subsidiaries 
Consolidated statement of cash flows   
For the six months ended 
(In US$ thousands) 

	2024		2023		2022
	(Unaudited)		(Unaudited)		(Unaudited)
Cash flow from operating activities	470,777		420,171		327,833
Cash flow (used in) investing activities	(258,696)		(293,193)		(262,743)
Cash flow (used in) from financing activities	(217,820)		32,461		(142,046)
Net (decrease) increase in cash and cash equivalents	(5,739)		159,439		(76,956)
Cash and cash equivalents at January 1	206,375		122,424		211,081
Cash and cash equivalents at June 30	$            200,636		$            281,863		$            134,125
Short-term investments	748,239		833,576		801,132
Long-term investments	258,379		222,282		140,374
Total cash and cash equivalents and investments at June 30	$         1,207,254		$         1,337,721		$         1,075,631

 

Copa Holdings, S.A.

NON-IFRS FINANCIAL MEASURE RECONCILIATION

This press release includes the following non-IFRS financial measures: 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 Net Profit	2Q24		2Q23		1Q24
Net Profit as Reported	$      120,253		$       17,509		$      176,066
Net change in fair value of derivatives	$               —		$     137,473		$               —
Net change in fair value of financial investments	$               —		$          (512)		$               —
Adjusted Net Profit	$      120,253		$     154,469		$      176,066
Reconciliation of Adjusted Basic EPS	2Q24		2Q23		1Q24
Adjusted Net Profit	$      120,253		$     154,469		$      176,066
Shares used for calculation of Basic EPS	41,715		39,444		42,052
Adjusted Basic Earnings per share (Adjusted Basic EPS)	$            2.88		$           3.92		$            4.19
Reconciliation of Operating Costs per ASM
Excluding Fuel (CASM Excl. Fuel)	2Q24		2Q23		1Q24
Operating Costs per ASM as Reported (in US$ Cents)	8.9		9.1		9.5
Aircraft Fuel Cost per ASM (in US$ Cents)	3.3		3.2		3.4
Operating Costs per ASM excluding fuel (in US$ Cents)	5.6		5.9		6.1

 

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SOURCE Copa Holdings, S.A.

FAQ

What was Copa Holdings' (CPA) net profit for Q2 2024?

Copa Holdings (CPA) reported a net profit of US$120.3 million for Q2 2024, equivalent to US$2.88 per share.

How did Copa Holdings' (CPA) passenger traffic change in Q2 2024 compared to Q2 2023?

Copa Holdings' (CPA) passenger traffic, measured in revenue passenger miles (RPMs), increased by 10.6% in Q2 2024 compared to Q2 2023.

What was Copa Holdings' (CPA) total revenue for Q2 2024?

Copa Holdings (CPA) reported total revenues of US$819.4 million for Q2 2024, representing a 1.3% increase compared to Q2 2023.

How much cash and investments did Copa Holdings (CPA) have at the end of Q2 2024?

Copa Holdings (CPA) ended Q2 2024 with approximately US$1.2 billion in cash, short-term and long-term investments, representing 35% of the last twelve months' revenues.

What was Copa Airlines' on-time performance in Q2 2024?

Copa Airlines achieved an on-time performance of 87.6% and a flight completion factor of 99.7% in Q2 2024, positioning itself among the best in the industry.