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Copa Holdings Reports Financial Results for the Second Quarter of 2023

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Copa Holdings reports a net profit of US$17.5 million for 2Q23, with an operating profit of US$194.7 million and a 24.1% operating margin. Passenger traffic increased by 15.4% and total revenues increased by 16.7% to US$809.2 million. The company ended the quarter with approximately US$1.3 billion in cash and total debt of US$1.8 billion. Copa Airlines received two Boeing 737 MAX 9 aircraft during the quarter and expects to end the year with 107 aircraft. The company will also start service to Barquisimeto, Venezuela, in October 2023.
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PANAMA CITY, Aug. 9, 2023 /PRNewswire/ -- Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the second quarter of 2023 (2Q23). 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 2022 (2Q22).

OPERATING AND FINANCIAL HIGHLIGHTS

  • Copa Holdings reported a net profit of US$17.5 million for 2Q23 or US$0.44 per share. Excluding special items comprised of the unrealized mark-to-market net loss of US$137.0 million related to the Company's convertible notes, as well as changes in the value of financial investments, the Company would have reported a net profit of US$154.5 million or US$3.92 per share.
  • Copa Holdings reported an operating profit of US$194.7 million and a 24.1% operating margin for the quarter, as compared to an operating profit of US$42.3 million and an operating margin of 6.1% in 2Q22.
  • Passenger traffic, measured in terms of revenue passenger miles (RPMs), increased by 15.4% year over year, while capacity (available seat miles or ASMs) increased by 13.6%. As a result, the load factor for the quarter increased by 1.3 percentage points to 86.1%, as compared to 2Q22.
  • Total revenues for 2Q23 increased 16.7% to US$809.2 million, mainly driven by higher capacity, while yields increased 2.0% to 13.3 cents. Revenue per available seat mile (RASM) increased 2.7% to 12.0 cents, as compared to 2Q22.
  • Operating cost per available seat mile (CASM) decreased 17.0% from 10.9 cents in 2Q22 to 9.1 cents in 2Q23, mainly driven by a decrease of 35.9% in the price of jet fuel per gallon. CASM excluding fuel (Ex-fuel CASM) decreased by 0.8% in the quarter to 5.9 cents, when compared to 2Q22.
  • The Company ended the quarter with approximately US$1.3 billion in cash, short-term and long-term investments, which represent 39.6% 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 0.5 times.
  • During the quarter, the Company announced that it will start service to Barquisimeto, Venezuela, bringing the total number of destinations in its network to 81. This new route is scheduled to start in October of 2023.
  • During the quarter, the Company took delivery of two Boeing 737 MAX 9 aircraft, ending the quarter with a consolidated fleet of 101 aircraft – 67 Boeing 737-800s, 24 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 91.6% and a flight completion factor of 99.8%, once again positioning itself among the very best in the industry.

Subsequent Events

  • In July, the Company took delivery of one Boeing 737 MAX 9 and expects to receive five additional aircraft during the remainder of 2023. The Company expects to end the year with 107 aircraft.
  • On July 14, 2023, Copa Holdings publicly announced the redemption of all its outstanding 4.50% Convertible Senior Notes due in 2025, which will be completed on September 18, 2023. Notes surrendered for conversion will be settled through a combination of cash (up to the principal amount of US$350 million) and shares of Copa common stock, the latter to cover the remainder of the conversion obligation.
  • In July, Copa Airlines was recognized by Skytrax – for the eighth consecutive year – as the "Best Airline in Central America and the Caribbean".
  • Copa Holdings will make its third dividend payment of the year of US$0.82 per share on October 13, 2023, to all Class A and Class B shareholders on record as of September 29, 2023.

 

Consolidated Financial
& Operating Highlights

2Q23

2Q22

Variance vs. 1Q19

1Q23

Variance vs. 1Q23

YTD23

YTD22

Variance vs. YTD22

Revenue Passengers Carried (000s)

2,980

2,481

20.1 %

2,881

3.4 %

5,860

4,765

23.0 %

Revenue Passengers OnBoard (000s)

4,469

3,796

17.7 %

4,295

4.0 %

8,764

7,272

20.5 %

RPMs (millions) 

5,826

5,047

15.4 %

5,723

1.8 %

11,550

9,632

19.9 %

ASMs (millions) 

6,767

5,955

13.6 %

6,596

2.6 %

13,363

11,578

15.4 %

Load Factor 

86.1 %

84.8 %

1.3 p.p.

86.8 %

-0.7 p.p.

86.4 %

83.2 %

3.2 p.p.

Yield (US$ Cents) 

13.3

13.0

2.0 %

14.6

-8.9 %

13.9

12.4

11.9 %

PRASM (US$ Cents) 

11.4

11.0

3.6 %

12.6

-9.6 %

12.0

10.3

16.3 %

RASM (US$ Cents) 

12.0

11.6

2.7 %

13.1

-9.1 %

12.5

10.9

14.8 %

CASM (US$ Cents) 

9.1

10.9

-17.0 %

10.2

-11.1 %

9.6

10.2

-5.2 %

CASM Excl. Fuel (US$ Cents) 

5.9

6.0

-0.8 %

6.2

-4.5 %

6.1

6.0

1.5 %

Fuel Gallons Consumed (millions) 

79.9

71.5

11.8 %

78.2

2.2 %

158.1

138.0

14.5 %

Avg. Price Per Fuel Gallon (US$)

2.65

4.14

-35.9 %

3.36

-21.1 %

3.00

3.52

-14.8 %

Average Length of Haul (miles)

1,955

2,034

-3.9 %

1,987

-1.6 %

1,971

2,021

-2.5 %

Average Stage Length (miles)

1,260

1,273

-1.1 %

1,281

-1.7 %

1,270

1,285

-1.2 %

Departures

33,385

29,369

13.7 %

31,984

4.4 %

65,369

56,559

15.6 %

Block Hours

107,055

95,315

12.3 %

104,626

2.3 %

211,681

183,790

15.2 %

Average Aircraft Utilization (hours)

11.8

11.2

5.4 %

11.9

-0.8 %

11.8

10.9

8.5 %

Operating Revenues (US$ millions) 

809.2

693.4

16.7 %

867.3

-6.7 %

1,676.5

1,265.0

32.5 %

Operating Profit (Loss) (US$ millions)

194.7

42.3

360.6 %

193.2

0.8 %

387.9

87.0

345.7 %

Operating Margin 

24.1 %

6.1 %

18.0 p.p.

22.3 %

1.8 p.p.

23.1 %

6.9 %

16.3 p.p.

Net Profit (Loss) (US$ millions)

17.5

124.1

-85.9 %

121.5

-85.6 %

139.0

143.8

-3.3 %

Adjusted Net Profit (Loss) (US$ millions) (1)

154.5

13.2

1073.1 %

157.8

-2.1 %

312.3

42.7

632.0 %

Basic EPS (US$)

0.44

3.01

-85.3 %

3.07

-85.5 %

3.52

3.49

1.0 %

Adjusted Basic EPS (US$) (1)

3.92

0.32

1125.7 %

3.99

-1.8 %

7.92

1.04

664.9 %

Shares for calculation of Basic EPS (000s) 

39,442

41,212

-4.3 %

39,565

-0.3 %

39,442

41,212

-4.3 %










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

 

FULL 2Q23 EARNINGS RELEASE AVAILABLE FOR DOWNLOAD AT:

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

2Q23 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST

 

Date:

August 10, 2023



Time:

10:00 AM US ET (9:00 AM Local Time)



Join by phone: 

https://register.vevent.com/register/BI4c91a9ca6f634c05bd431cabc09bb55d



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.















Income Statement - IFRS















(US$ Thousands)

















Unaudited


Unaudited


%

Unaudited


%

Unaudited


Unaudited


%



2Q23


2Q22


Change

1Q23


Change

YTD23


YTD22


Change

Operating Revenues















Passenger revenue


773,781


656,943


17.8 %

834,018


-7.2 %

1,607,798


1,198,198


34.2 %

Cargo and mail revenue


23,888


26,734


-10.6 %

23,252


2.7 %

47,140


48,270


-2.3 %

Other operating revenue


11,521


9,718


18.6 %

9,995


15.3 %

21,516


18,508


16.3 %

Total Operating Revenue


809,190


693,394


16.7 %

867,264


-6.7 %

1,676,454


1,264,976


32.5 %
















Operating Expenses















Fuel


214,121


295,952


-27.7 %

265,498


-19.4 %

479,619


487,208


-1.6 %

Wages, salaries, benefits and other employees' expenses


105,788


88,995


18.9 %

102,652


3.1 %

208,441


178,754


16.6 %

Passenger servicing


21,460


16,074


33.5 %

20,391


5.2 %

41,852


31,681


32.1 %

Airport facilities and handling charges


54,146


47,280


14.5 %

50,479


7.3 %

104,625


93,067


12.4 %

Sales and distribution


56,596


56,222


0.7 %

61,406


-7.8 %

118,002


102,255


15.4 %

Maintenance, materials and repairs


31,430


28,311


11.0 %

40,296


-22.0 %

71,726


51,662


38.8 %

Depreciation and amortization


74,818


65,337


14.5 %

72,677


2.9 %

147,494


128,640


14.7 %

Flight operations


25,005


24,068


3.9 %

27,424


-8.8 %

52,429


46,106


13.7 %

Other operating and administrative expenses


31,158


28,894


7.8 %

33,228


-6.2 %

64,387


58,568


9.9 %

Total Operating Expense


614,523


651,133


-5.6 %

674,053


-8.8 %

1,288,576


1,177,942


9.4 %
















Operating Profit/(Loss)


194,667


42,261


360.6 %

193,212


0.8 %

387,878


87,035


345.7 %
















Non-operating Income (Expense):















Finance cost


(30,517)


(21,270)


43.5 %

(24,365)


25.2 %

(54,882)


(41,715)


31.6 %

Finance income


11,970


3,526


239.5 %

8,842


35.4 %

20,812


6,071


242.8 %

Gain (loss) on foreign currency fluctuations


3,712


(6,834)


-154.3 %

1,201


209.0 %

4,914


(3,916)


-225.5 %

Net change in fair value of derivatives


(137,473)


113,670


-220.9 %

(37,933)


262.4 %

(175,406)


106,918


-264.1 %

Other non-operating income (expense)


925


(2,717)


-134.0 %

1,235


-25.1 %

2,160


(5,381)


-140.1 %

Total Non-Operating Income/(Expense)


(151,382)


86,375


-275.3 %

(51,020)


196.7 %

(202,402)


61,977


-426.6 %
















Profit before taxes


43,284


128,636


-66.4 %

142,192


-69.6 %

185,476


149,012


24.5 %
















Income tax expense


(25,775)


(4,560)


465.2 %

(20,671)


24.7 %

(46,447)


(5,177)


797.2 %
















Net Profit/(Loss)


17,509


124,076


-85.9 %

121,521


-85.6 %

139,030


143,835


-3.3 %
















EPS















Basic


0.44


3.01


-85.3 %

3.07


-85.5 %

3.52


3.49


1.0 %
















Shares used for calculation:















Basic


39,442,367


41,211,540


-4.3 %

39,565,223


-0.3 %

39,442,367


41,211,540


-4.3 %
















 

Copa Holdings, S. A. and subsidiaries 



Consolidated statement of financial position 



(US$ Thousands)




June 2023

December 2022

 ASSETS 

 (Unaudited)  

 (Audited)  

Cash and cash equivalents

281,863

122,424

Short-term investments

833,576

812,323

Total cash, cash equivalents and short-term investments

1,115,439

934,747




Accounts receivable, net

162,333

135,415

Accounts receivable from related parties

2,388

2,168

Expendable parts and supplies, net

104,332

93,332

Prepaid expenses

46,025

52,322

Prepaid income tax

335

798

Other current assets

21,855

17,043


337,268

301,078

TOTAL CURRENT ASSETS

1,452,707

1,235,825




Long-term investments

222,282

202,056

Long-term prepaid expenses

8,832

7,770

Property and equipment, net

3,025,624

2,883,524

Right of use assets

258,268

234,380

Intangible, net

82,919

78,555

Net defined benefit assets

1,732

504

Deferred tax assets

29,499

30,743

Other Non-Current Assets

16,796

17,005

TOTAL NON-CURRENT ASSETS

3,645,952

3,454,537




TOTAL ASSETS

5,098,659

4,690,362




LIABILITIES



Loans and borrowings

445,083

142,484

Derivative financial instruments

426,555

-

Current portion of lease liability

71,940

80,084

Accounts payable

161,880

166,660

Accounts payable to related parties

2,340

1,004

Air traffic liability

649,054

651,805

Frequent flyer deferred revenue

114,570

111,526

Taxes Payable

49,178

43,878

Employee benefits obligations

39,537

44,913

Income tax payable

14,814

6,276

Other Current Liabilities

757

1,175

TOTAL CURRENT LIABILITIES

1,975,708

1,249,805




Loans and borrowings long-term

1,107,037

1,301,819

Lease Liability

186,558

158,289

Derivative financial instruments

-

251,150

Deferred tax Liabilities

34,710

16,571

Other long - term liabilities

239,763

220,618

TOTAL NON-CURRENT LIABILITIES

1,568,068

1,948,447




TOTAL LIABILITIES

3,543,776

3,198,252




EQUITY



Class A - 34,064,142  issued and 28,367,386 outstanding

21,366

21,327

Class B - 10,938,125

7,466

7,466

Additional Paid-In Capital

105,551

103,465

Treasury Stock

(360,001)

(344,541)

Retained Earnings

1,652,916

1,367,784

Net profit 

139,030

348,054

Other comprehensive loss

(11,445)

(11,445)




TOTAL EQUITY

1,554,883

1,492,110

TOTAL EQUITY LIABILITIES

5,098,659

4,690,362




 

Copa Holdings, S. A. and subsidiaries 







Consolidated Statement of Cash Flows







For the six months ended June 30, 







(In US$ thousands)

















2023


2022


2021










(Unaudited)


(Unaudited)


(Unaudited)

Cash flow from operating activities 


420,171


327,833


149,669

Cash flow used in investing activities 


(293,193)


(262,743)


(119,776)

Cash flow from (used in) from financing activities 


32,461


(142,046)


107,806

Net increase in cash and cash equivalents 


159,439


(76,956)


137,699

Cash and cash equivalents at January 1


122,424


211,081


119,065

Cash and cash equivalents at June 30


$               281,863


$               134,125


$               256,764















Short-term investments 


833,576


801,132


925,680

Long-term investments 


222,282


140,374


99,235

Total cash and cash equivalents and investments at June 30


$            1,337,721


$            1,075,631


$            1,281,679















 

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


2Q23


2Q22


1Q23








Net Profit as Reported


$     17,509


$   124,076


$   121,521

   Add: Net change in fair value of derivatives


$   137,473


$ (113,670)


$     37,933

   Add: Net change in fair value of financial investments


$        (512)


$       2,761


$     (1,655)

Adjusted Net Profit


$   154,469


$     13,168


$   157,798








Reconciliation of Adjusted Basic EPS


2Q23


2Q22


1Q23








Adjusted Net Profit


$   154,469


$     13,168


$   157,798

Shares used for calculation of Basic EPS


39,442


41,212


39,565

Adjusted Basic Earnings per share (Adjusted Basic EPS)


$         3.92


$         0.32


$         3.99








Reconciliation of Operating Costs per ASM







Excluding Fuel (CASM Excl. Fuel)


2Q23


2Q22


1Q23








Operating Costs per ASM as Reported (in US$ Cents)


9.1


10.9


10.2

Aircraft Fuel Cost per ASM  (in US$ Cents)


3.2


5.0


4.0

Operating Costs per ASM excluding fuel (in US$ Cents)


5.9


6.0


6.2








 

Cision View original content:https://www.prnewswire.com/news-releases/copa-holdings-reports-financial-results-for-the-second-quarter-of-2023-301897235.html

SOURCE Copa Holdings, S.A.

FAQ

What is the net profit reported by Copa Holdings for 2Q23?

Copa Holdings reported a net profit of US$17.5 million for 2Q23.

What is the operating profit and margin for the quarter?

Copa Holdings reported an operating profit of US$194.7 million and a 24.1% operating margin for the quarter.

How much did passenger traffic increase by?

Passenger traffic increased by 15.4% year over year.

What is the total revenue for 2Q23?

Total revenues for 2Q23 increased 16.7% to US$809.2 million.

How much cash does the company have at the end of the quarter?

The company ended the quarter with approximately US$1.3 billion in cash.

How many aircraft did Copa Airlines receive during the quarter?

Copa Airlines took delivery of two Boeing 737 MAX 9 aircraft during the quarter.

What new route will Copa Airlines start in October 2023?

Copa Airlines will start service to Barquisimeto, Venezuela, in October 2023.

Copa Holdings, S.A.

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