SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
Report on Form 6-K dated for the month of May, 2009
Copa Holdings, S.A.
(Translation of Registrant's Name Into English)
Boulevard Costa del Este, Avenida Principal y Avenida de la Rotonda
Urbanización Costa del Este
Complejo Business Park, Torre Norte
Parque Lefevre
Panama City, Panama
(Address of principal executive offices)
(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)
Form 20-F x Form 40-F ¨
(Indicate by check whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)
Yes ¨ No x
(If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b);82- )
Enclosure: Press Release - - Copa Holdings Reports Net Income of US$71.6 Million and EPS of US$1.65 for the First Quarter of 2009
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
Copa Holdings, S.A. | ||
(Registrant) | ||
Date: 05/6/2009 | ||
By: | /s/ Victor Vial | |
Name: Victor Vial | ||
Title: CFO |
Copa Holdings Reports Net Income of US$71.6 Million and EPS of US$1.65 for the First Quarter of 2009
Excluding special, items adjusted net income came in at $55.5 million, or $1.28 per share
Panama City, Panama — May 06, 2009. Copa Holdings, S.A. (NYSE: CPA), parent company of Copa Airlines and Aero Republica, today announced financial results for the first quarter of 2009 (1Q09). The terms “Copa Holdings" or "the Company" refer to the consolidated entity, whose operating subsidiaries are Copa Airlines and Aero Republica. The following financial and operating information, unless otherwise indicated, is presented in accordance with U.S. GAAP. Unless otherwise stated, all comparisons with prior periods refer to the first quarter of 2008 (1Q08).
OPERATING AND FINANCIAL HIGHLIGHTS
· | Copa Holdings reported net income of US$71.6 million for 1Q09, or diluted earnings per share (EPS) of US$1.65, an increase of 81.3% as compared to net income of US$39.5 million or diluted EPS of US$0.91 in 1Q08. |
· | Excluding special items, which for 1Q09 included a US$16.2 million non-cash gain associated with the mark-to-market of fuel hedge contracts, Copa Holdings would have reported an adjusted net income of $55.5 million, or $1.28 per share, compared to an adjusted net income of US$37.7 million or US$0.87 per share for 1Q08. See the accompanying reconciliation of non-GAAP financial information to GAAP financial information included in the financial tables section of this earnings release. |
· | Operating income for 1Q09 came in at US$68.9 million, despite a $19.9 million fuel hedge loss, representing an increase of 33.3% as compared to operating income of US$51.7 million for 1Q08. Operating margin increased from 17.5% to 22.3%, maintaining our position among the most profitable airlines in the industry. |
· | In 1Q09, total revenues increased to US$308.8 million, representing growth of 4.3%, on a 17.0% capacity expansion. Yield per passenger mile decreased 6.2% to 16.2 cents and operating revenue per available seat mile (RASM) decreased 10.8% to 12.7 cents. |
· | Revenue passenger miles (RPMs) increased 11.6% from 1.62 billion in 1Q08 to 1.81 billion in 1Q09, and available seat miles (ASMs) increased 17.0% from 2.08 billion in 1Q08 to 2.43 billion in 1Q09, with the Copa Airlines segment increasing 18.9% year-over-year and Aero Republica increasing 8.0%. Consolidated load factor decreased 3.6 percentage points to 74.4%. Underlying Break-even load factor for 1Q09 decreased 7.7 percentage points to 57.5% from 65.2% in 1Q08. |
· | Operating cost per available seat mile (CASM) decreased 16.0%, from 11.8 cents in 1Q08 to 9.9 cents in 1Q09. CASM, excluding fuel costs, decreased 11.0% from 7.7 cents in 1Q08 to 6.8 cents in 1Q09. |
· | Liquidity including cash, short term and long term investments, plus committed credit lines of US$31 million, ended the quarter at US$434.2 million, representing 33% of the last twelve months’ revenues. |
· | Copa Airlines ended the quarter with a fleet of 43 aircraft, consisting of 28 Boeing 737 Next Generation aircraft and 15 Embraer-190 aircraft. Aero Republica received two Embraer-190 aircraft and ended the quarter with a fleet of 15 aircraft, consisting of 11 Embraer-190 and four MD-80 aircraft. Copa Holdings ended the quarter with a consolidated fleet of 58 aircraft. |
· | For 1Q09, Copa Airlines reported on-time performance of 90.6% and a flight-completion factor of 99.6%, maintaining its position among the best in the industry. |
RECENT DEVELOPMENTS
· | On May 6, the Copa Holdings Board of Directors declared an annual dividend of $0.37 per share. Although this dividend is the same amount per share paid in 2008, it represents 14% of 2008 consolidated net income. The determination to pay dividends in excess of the Company’s current 10% policy was made due to the Company’s strong operating earnings, balance sheet and liquidity position. The dividend will be paid on June 15, 2009 to stockholders of record as of May 29, 2009. |
· | Recently, Continental Airlines announced its intention to leave SkyTeam effective October 24, 2009. Due to the long-standing alliance relationship with Continental, and in order to ensure Copa remains fully aligned with Continental on a number of important joint initiatives, Copa will also be leaving SkyTeam concurrently with Continental on October 24, 2009. |
Consolidated Financial & Operating Highlights | 1Q09 | 1Q08 | % Change | 4Q08 | % Change | |||||||||||||||
RPMs (millions) | 1,807 | 1,619 | 11.6 | % | 1,760 | 2.7 | % | |||||||||||||
ASMs (mm) | 2,430 | 2,077 | 17.0 | % | 2,375 | 2.3 | % | |||||||||||||
Load Factor | 74.4 | % | 78.0 | % | -3.6 p.p. | 74.1 | % | 0.3 p.p. | ||||||||||||
Yield | 16.2 | 17.3 | -6.2 | % | 18.5 | -12.4 | % | |||||||||||||
PRASM (cents) | 12.1 | 13.5 | -10.6 | % | 13.7 | -12.0 | % | |||||||||||||
RASM (cents) | 12.7 | 14.2 | -10.8 | % | 14.6 | -12.8 | % | |||||||||||||
CASM (cents) | 9.9 | 11.8 | -16.0 | % | 11.0 | -10.5 | % | |||||||||||||
CASM Excl. Fuel (cents) | 6.8 | 7.7 | -11.0 | % | 7.2 | -4.7 | % | |||||||||||||
Breakeven Load Factor (2) | 57.5 | % | 65.2 | % | -7.7 p.p. | 56.9 | % | 0.6 p.p. | ||||||||||||
Operating Revenues (US$ mm) | 308.8 | 295.9 | 4.3 | % | 346.1 | -10.8 | % | |||||||||||||
EBITDAR (US$ mm) (1) | 111.4 | 75.8 | 46.9 | % | 66.6 | 67.2 | % | |||||||||||||
Adjusted EBITDAR (US$ mm) (1)(2) | 95.3 | 74.1 | 28.6 | % | 106.1 | -10.2 | % | |||||||||||||
EBITDAR Margin (1) | 36.1 | % | 25.6 | % | 10.5 p.p. | 19.3 | % | 16.8 p.p. | ||||||||||||
Adjusted EBITDAR Margin (1)(2) | 30.9 | % | 25.0 | % | 5.8 p.p. | 30.7 | % | 0.2 p.p. | ||||||||||||
Operating Income (US$ mm) | 68.9 | 51.7 | 33.3 | % | 84.0 | -18.0 | % | |||||||||||||
Operating Margin | 22.3 | % | 17.5 | % | 4.8 p.p. | 24.3 | % | -2.0 p.p. | ||||||||||||
Net Income (US$ mm) | 71.6 | 39.5 | 81.3 | % | 25.8 | 178.1 | % | |||||||||||||
Adjusted Net Income (US$ mm) (2) | 55.5 | 37.7 | 47.0 | % | 65.2 | -15.0 | % | |||||||||||||
EPS - Basic (US$) | 1.67 | 0.92 | 81.6 | % | 0.60 | 179.9 | % | |||||||||||||
Adjusted EPS - Basic (US$) (2) | 1.29 | 0.88 | 47.3 | % | 1.51 | -14.4 | % | |||||||||||||
EPS - Diluted (US$) | 1.65 | 0.91 | 81.2 | % | 0.59 | 177.8 | % | |||||||||||||
Adjusted EPS - Diluted (US$) (2) | 1.28 | 0.87 | 46.9 | % | 1.50 | -15.0 | % | |||||||||||||
Weighted Avg. # of Shares - Basic (000) | 42,908 | 42,985 | -0.2 | % | 43,195 | -0.7 | % | |||||||||||||
Weighted Avg. # of Shares - Diluted (000) | 43,464 | 43,433 | 0.1 | % | 43,426 | 0.1 | % |
(1) EBITDAR means earnings before interest, taxes, depreciation, amortization and rent.
(2) Break-even load factor, adjusted EBITDAR, Adjusted EBITDAR margin, Adjusted Net Income and Adjusted EPS (Basic and Diluted) exclude non-cash charges/gains associated with the mark-to-market of fuel hedges.
Note: A reconciliation of non-GAAP financial measures to the comparable US GAAP measures appears at the end of this press release.
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MANAGEMENT’S COMMENTS ON 1Q09 RESULTS
Copa Holdings first quarter results were positively impacted by lower unit costs, mainly related to lower fuel costs. For 1Q09 the company reported record operating income of US$68.9 million, a 33.3% increase over 1Q08. Operating margin increased 4.8 percentage points from 17.5% to 22.3%, maintaining our position as one of the most profitable airlines in the world.
Total revenues increased 4.3% during the quarter, at a slower rate than capacity expansion of 17.0%, which resulted in a 10.8% decrease in revenues per ASM (RASM) from 14.2 cents to 12.7 cents. Passenger revenues, which represented 95% of total revenues, increased 4.6% to US$293.2 million, due to a 17.0% increase in capacity, partly offset by a 10.6% decline in passenger revenue per ASM (PRASM). The latter was driven by a 6.2% drop in yield and a 3.6 percentage point decline in consolidated load factor from 78.0% to 74.4%.
In 1Q09, Copa Airlines’ yields came in at 15.5 cents, representing a decline of 3.2% compared to 1Q08. Copa Airlines yields declined mainly as a result of an increased length of haul and lower average fares as a result of a less robust demand environment and lower fuel surcharges. Aero Republica’s yields decreased 16.9% to 20.9 cents for the most part due to a weaker Colombian currency.
Consolidated operating expenses for 1Q09 decreased 1.8% to US$239.8 million, while consolidated operating expenses per ASM (CASM) decreased 16.0% to 9.9 cents. Excluding fuel costs, unit costs decreased 11.0% to 6.8 cents, mostly as a result of lower distribution costs, the timing of certain maintenance events at Aero Republica and overall higher aircraft utilization.
Aircraft fuel expense decreased 12.9% or US$10.9 million compared to 1Q08, despite a 17.0% increase in miles flown. The Company’s effective jet fuel price, which includes a US$19.9 million negative fuel hedge effect in 1Q09 and a US$4.0 million positive fuel hedge effect in 1Q08, decreased from an average of US$2.82 in 1Q08 to US$2.16 in 1Q09.
For 1Q09, the Company had fuel hedges in place representing 36% of its consolidated volume. Continuing with the execution of its fuel hedge policy, the Company currently has hedged approximately 30% in 2Q09, 25% in 3Q09 and 16% in 4Q09. For 2010 and 2011 the Company has hedged 6% and 9% of its consolidated volume, respectively.
The Company recorded a non-operating gain of US$8.3 million for 1Q09 compared to an US$8.1 million non-operating expense in 1Q08. This gain was mainly due to a US$16.4 million increase in Other, net as a result of an unrealized fuel hedge mark-to-market gain of US$16.2 million, as compared to an unrealized fuel hedge mark-to-market gain of US$1.8 million in 1Q08.
Copa Holdings closed the quarter with a strong cash position totaling US$403.1 million in cash, short term and long term investment, representing approximately 31% of last twelve months´ revenues. This figure includes US$29.3 million in restricted cash, of which $22.9 million is collateral for out-of-money hedge contracts related to future quarters. Additionally, the company has committed lines of credit totaling $31.1 million. Total debt at the end of the year amounted to US$926.9 million, most of which relates to aircraft and equipment financing.
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During 2009, the Company expects to receive six aircraft, four Boeing 737-800s for Copa Airlines and two Embraer-190s for Aero Republica. Related to the purchased 737-800s, the Company has already secured final commitment from US EXIM Bank and arranged financing for one aircraft which was delivered in February. Additionally, for the remaining two purchased 737-800s, the Company has secured preliminary commitments from US EXIM Bank. The two Embraer-190s, which have already been delivered, are operating leases.
For 1Q09, Aero Republica recorded operating income of US$6.3 million, compared to an operating loss of US$0.7 million in 1Q08. Operating margin for 1Q09 came in at 11.8%. Aero Republica continues to benefit from its international expansion and fleet transition strategy aimed at replacing its MD-80 fleet with modern and fuel efficient Embraer-190 aircraft. For 1Q09, Aero Republica’s capacity, in terms of ASMs flown in Embraer-190 aircraft as a percentage of its total capacity, increased from 50% in 1Q08 to 66% in 1Q09.
Additionally, as part of its international expansion, Aero Republica’s international capacity increased nearly 90% year-over-year, reaching 26% of total capacity during 1Q09, as compared to 15% in 1Q08. Furthermore, according to statistics from Colombia’s Civil Aeronautics Authority (Aerocivil) Aero Republica has increased its international passenger market share to 9.1%, up from 5.8% in 2008.
Copa Holdings’ first quarter results highlight the Company’s ability to operate profitably and grow in a challenging economic environment. In 2009, Copa Airlines’ capacity is expected to grow approximately 16%, mostly as a result of the full year effect of capacity introduced during the course of 2008. At the same time, Aero Republica’s capacity growth will remain flat or increase slightly as the airline continues its transition to all Embraer-190 fleet. This should result in a consolidated capacity growth of approximately 13%. Copa Holdings’ consolidated fleet is expected to end the year flat at 55 aircraft, made up of 18 737-700s, 11 737-800s and 26 Embraer-190s.
Copa Holdings continues to deliver industry-leading results, despite negative factors that have affected the industry as a whole. This is the result of a solid and well executed business model based on developing the most comprehensive and convenient network for intra Latin America travel and a very competitive cost structure. Throughout the remainder of 2009, the Company will seek to continue strengthening its long term competitive position, with the advantages of a flexible fleet plan and a strong balance sheet and liquidity position.
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OUTLOOK FOR 2009
Copa Holdings’ 2009 guidance remains unchanged. Consolidated capacity for 2009 is expected to increase approximately 13%, mainly as a result of the full year effect of capacity introduced in 2008. Load factors are expected to come in slightly below 2008 levels at approximately 74%, while unit revenues (RASM) are forecasted to decline approximately 14% mainly as a result of a decrease in fuel surcharges and slower traffic growth as a result of a weakening economic environment. Unit costs excluding fuel are expected to come in at 7.5 cents. We currently estimate the effective the estimated effective price of jet fuel for 2009, including the effect of current hedge contracts and into plane costs, remains at US$2.11 per gallon. As a result, the Company maintains its operating margin guidance in the range of 16.0% to 18.0% for 2009, although expecting to come in at the high end of this range.
Financial Outlook (US GAAP) | 2009 - Full Year | |||
ASMs (billion) | +/-10.0 | |||
Average Load Factor | +/-74 | % | ||
RASM (cents) | +/-12.6 | |||
CASM Ex-fuel (cents) | +/- 7.5 | |||
Operating Margin | 16.0-18.0 | % |
CONSOLIDATED FIRST QUARTER RESULTS
Operating revenue
Consolidated revenue for 1Q09 totaled US$308.8 million, a 4.3% or US$12.9 million increase over operating revenue of US$295.9 million in 1Q08, mainly due to an 8.1% or US$19.2 million increase in Copa Airlines’ operating revenue, partly offset by a 13.2% or US$8.2 million decline in Aero Republica’s operating revenue.
Copa Airlines operating revenue
Copa Airlines operating revenue for 1Q09 totaled US$256.1 million, an 8.1% increase over operating revenue of US$236.9 million in 1Q08. This increase was primarily due to an 8.8% or US$19.6 million increase in passenger revenue.
Passenger revenue. For 1Q09 passenger revenue totaled US$242.8 million, an 8.8% increase over passenger revenue of US$223.2 million in 1Q08 as ASMs increased by 18.9% in 1Q09 as compared to 1Q08. Passenger yield decreased 3.2% to 15.5 cents, while load factor decreased 4.4 percentage points from the 81.2% to 76.8 in 1Q09..
Cargo, mail and other. Cargo, mail and other revenue totaled US$13.3 million in 1Q09, a 3.2% decline from cargo, mail and other of US$13.7 million in 1Q08.
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Aero Republica operating revenue
During 1Q09, Aero Republica generated operating revenue of US$53.7 million, representing a 13.2% decline over 1Q08. This decrease resulted mainly from a US$6.7 million or 11.7% decline in passenger revenue. During the quarter Aero Republica’s capacity (ASMs) increased by 8.0% mainly as a result of increased international presence, while traffic (RPMs) increased 6.2%, resulting in a load factor of 61.6% or 1 percentage point below 1Q08. Yields decreased by 16.9% primarily due a weaker demand environment, lower fuel surcharges and a weaker Colombian currency.
Operating expenses
For 1Q09, consolidated operating expenses decreased 1.8% to US$239.8 million, representing operating cost per available seat mile (CASM) of 9.9 cents. Operating cost per available seat mile (CASM), excluding fuel costs, decreased 11.1% from 7.7 cents in 1Q08 to 6.8 cents in 1Q09. An overview of the major variances on a consolidated basis follows:
Aircraft fuel. For 1Q09, aircraft fuel totaled US$73.5 million, a US$10.9 million or 12.9% decrease from aircraft fuel of US$84.3 million in 1Q08. This decline was primarily a result of a 23.4% decrease in the average price per gallon of jet fuel (all-in), which averaged US$2.16 in 1Q09 as compared to US$2.82 in 1Q08, offset by a 14.5% increase in gallons consumed resulting from increased capacity. The all-in average price per gallon of jet fuel for 1Q09 includes $19.9 million fuel hedge loss.
Salaries and benefits. For 1Q09, salaries and benefits totaled US$36.7 million, a 7.6% increase over salaries and benefits of US$34.1 million in 1Q08. This increase was mostly a result of an overall increase in operating headcount to support additional capacity.
Passenger servicing. For 1Q09, passenger servicing totaled US$26.0 million, a 12.0% increase over passenger servicing of US$23.2 million in 1Q08. This increase was primarily a result of an increase in capacity and passengers carried.
Commissions. For 1Q09, commissions totaled US$13.2 million, a 22.0% decrease from commissions of US$17.0 million in 1Q08. This decrease was primarily a result of lower average commission rates at both Copa Airlines and Aero Republica.
Reservations and sales. Reservations and sales totaled US$13.0 million, a 1.6% decrease from reservation and sales of US$13.3 million in 1Q08.
Maintenance, material and repairs. For 1Q09, maintenance, material and repairs totaled US$16.9 million, a 2.7% decrease over maintenance, material and repairs of US$17.3 million in 1Q08. This decrease was primarily a result of the timing of major overhaul events in Aero Republica.
Depreciation. Depreciation totaled US$11.9 million in 1Q09, a 19.3% increase over depreciation of US$10.0 million in 1Q08. This increase was primarily related to the depreciation of new aircraft and spares.
Aircraft Rentals. Aircraft rentals totaled US$12.4 million in 1Q09, a 15.9% increase over aircraft rentals of US$10.7 million in 1Q08.
Flight operations, aircraft rentals, landing fees and other rentals. Combined, flight operations, aircraft rentals, landing fees and other rentals increased 12.7% from US$31.7 million in 1Q08 to US$35.7 million in 1Q09, primarily as a result of increased capacity.
Other. Other expenses totaled US$12.9 million in 1Q09, a decrease of US$0.4 million.
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Copa Airlines operating expenses
Copa Airlines’ operating expenses increased 4.8% to US$193.4 million from US$184.5 million in 1Q08. Operating expenses per available seat mile decreased 11.8% to 9.5 cents in 1Q09 from 10.8 cents in 1Q08. Excluding fuel costs, operating expenses per available seat mile decreased 7.1% from 6.9 cents in 1Q08 to 6.4 cents in 1Q09.
Aircraft fuel. For 1Q09, aircraft fuel totaled US$62.2 million, a 5.2% increase over aircraft fuel expense of US$65.7 million in the same period in 2008. This increase was primarily a result of a 17.2% increase in gallons consumed resulting from increased capacity, offset by a 18.4% decline in the average price per gallon of jet fuel (all-in), which averaged US$2.25 in 1Q09 as compared to US$2.76 in 1Q08. The all-in average price per gallon of jet fuel for 1Q09 includes $19.1 million fuel hedge loss.
Salaries and benefits. For 1Q09, salaries and benefits totaled US$29.9 million, a 13.9% increase over salaries and benefits of US$26.2 million in the same period in 2008. This increase was mainly a result of an overall increase in operating headcount to support additional capacity.
Passenger servicing. Passenger servicing totaled US$22.0 million for 1Q09, a 17.5% increase over passenger servicing of US$18.7 million in 1Q08. This increase was primarily the result of an increase in capacity and passengers carried.
Commissions. Commissions totaled US$10.4 million for 1Q09, a 16.0% decrease from commissions of US$12.4 million in 1Q08. This decrease was primarily a result of a lower average commission rate.
Reservations and sales. Reservations and sales totaled US$10.1 million, a 1.1% increase over reservation and sales of US$10.0 million in 1Q08.
Maintenance, materials and repairs. Maintenance, materials and repairs totaled US$13.5 million in 1Q09, a 40.4% increase over maintenance, materials and repairs of US$9.6 million in 1Q08. This increase resulted from higher capacity, and more overhaul events.
Depreciation. Depreciation totaled US$10.8 million in 1Q09, a 22.1% increase over depreciation of US$8.8 million in 1Q08, primarily related to depreciation of new aircraft and spare parts.
Flight operations, aircraft rentals, landing fees and other rentals. Combined, flight operations, aircraft rentals, landing fees and other rentals increased 5.0% from US$23.7 million in 1Q08 to US$24.8 million in 1Q09, primarily as a result of increased capacity.
Other. Other expenses increased US$0.3 million from US$9.5 million in 1Q08 to US$9.8 million in 1Q09.
Aero Republica operating expenses
Aero Republica’s operating expenses decreased 24.2% to US$47.4 million in 1Q09 from US$62.6 million in 1Q08. Operating expenses per available seat mile (CASM) decreased 29.9% to 12.1 cents in 1Q09 from 17.3 cents in 1Q08. CASM, excluding fuel costs, decreased 23.7% from 12.1 cents in 1Q08 to 9.3 cents in 1Q09, mainly due to the timing of overhaul events and a weaker Colombian currency.
Non-operating income (expense)
Consolidated non-operating income (expense) totaled a gain of US$8.3 million in 1Q09, compared to an US$8.1 million expense in 1Q08.
Interest expense. Interest expense totaled US$8.9 million in 1Q09, an 18.6% decrease from interest expense of US$11.0 million in 1Q08, primarily as a result of lower rates on variable rate debt.
Interest capitalized. Interest capitalized totaled US$0.3 million in 1Q09, a 39.0% decrease from 1Q08.
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Interest income. Interest income totaled US$2.6 million, a 7.4% decrease from interest income of US$2.8 million in 1Q08, mostly a result of lower rates.
Other, net. Other net totaled a gain of US$14.4 million in 1Q09, mainly related to a US$16.2 million non-cash gain related to the mark-to-market of fuel hedge contracts.
About Copa Holdings
Copa Holdings, through its Copa Airlines and Aero Republica operating subsidiaries, is a leading Latin American provider of passenger and cargo service. Copa Airlines currently offers approximately 144 daily scheduled flights to 45 destinations in 24 countries in North, Central and South America and the Caribbean. In addition, Copa Airlines provides passengers with access to flights to more than 120 other international destinations through code share agreements with Continental Airlines and other airlines. Aero Republica, the second-largest domestic carrier in Colombia, provides service to 12 cities in Colombia as well as international connectivity with Copa Airlines' Hub of the Americas through flights from Bogota, Bucaramanga, Cali, Cartagena, Medellin and Pereira. Additionally, Aero Republica has direct daily flights to Caracas, Venezuela, from the cities of Bogota and Medellin.
CONTACT: Copa Holdings S.A.
Investor Relations:
Ph: (507) 304-2677
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 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.
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Copa Holdings, S.A.
Operating data
Unaudited | Unaudited | % | Unaudited | % | ||||||||||||||||
1Q09 | 1Q08 | Change | 4Q08 | Change | ||||||||||||||||
Copa Holdings (Consolidated) | ||||||||||||||||||||
Revenue passengers carried (thousands) | 1,287 | 1,217 | 5.7 | % | 1,338 | -3.9 | % | |||||||||||||
Revenue passengers miles (RPMs) (mm) | 1,807 | 1,619 | 11.6 | % | 1,760 | 2.7 | % | |||||||||||||
Available seat miles (ASMs) (mm) | 2,430 | 2,077 | 17.0 | % | 2,375 | 2.3 | % | |||||||||||||
Load factor | 74.4 | % | 78.0 | % | -3.6 p.p. | 74.1 | % | 0.3 p.p. | ||||||||||||
Break-even load factor | 57.5 | % | 65.2 | % | -7.7 p.p. | 56.9 | % | 0.6 p.p. | ||||||||||||
Yield (cents) | 16.2 | 17.3 | -6.2 | % | 18.5 | -12.4 | % | |||||||||||||
RASM (cents) | 12.7 | 14.2 | -10.8 | % | 14.6 | -12.8 | % | |||||||||||||
CASM (cents) | 9.9 | 11.8 | -16.0 | % | 11.0 | -10.5 | % | |||||||||||||
CASM - excl. fuel (cents) | 6.8 | 7.7 | -11.0 | % | 7.2 | -4.7 | % | |||||||||||||
Fuel gallons consumed (mm) | 33.9 | 29.6 | 14.5 | % | 33.4 | 1.4 | % | |||||||||||||
Average price of Fuel - Net of Hedges (US$) | 2.16 | 2.82 | -23.4 | % | 2.73 | -20.8 | % | |||||||||||||
Copa Segment | ||||||||||||||||||||
Revenue passengers miles (RPMs) (mm) | 1,566 | 1,393 | 12.4 | % | 1,503 | 4.2 | % | |||||||||||||
Available seat miles (ASMs) (mm) | 2,039 | 1,715 | 18.9 | % | 1,981 | 3.0 | % | |||||||||||||
Load factor | 76.8 | % | 81.2 | % | -4.4 p.p. | 75.9 | % | 0.9 p.p. | ||||||||||||
Break-even load factor | 58.1 | % | 63.0 | % | -4.9 p.p. | 55.3 | % | 2.8 p.p. | ||||||||||||
Yield (US$ cents) | 15.5 | 16.0 | -3.2 | % | 17.4 | -10.9 | % | |||||||||||||
RASM (cents) | 12.6 | 13.8 | -9.1 | % | 14.1 | -10.8 | % | |||||||||||||
CASM (cents) | 9.5 | 10.8 | -11.8 | % | 10.5 | -9.9 | % | |||||||||||||
CASM - excl. fuel (cents) | 6.4 | 6.9 | -7.1 | % | 6.8 | -5.5 | % | |||||||||||||
Fuel gallons consumed (mm) | 27.5 | 23.5 | 17.2 | % | 26.9 | 2.1 | % | |||||||||||||
Average price of Fuel - Net of Hedges (US$) | 2.25 | 2.76 | -18.4 | % | 2.72 | -17.2 | % | |||||||||||||
Aero Republica Segment | ||||||||||||||||||||
Revenue passengers miles (RPMs) (mm) | 241 | 226 | 6.2 | % | 257 | -6.3 | % | |||||||||||||
Available seat miles (ASMs) (mm) | 390 | 361 | 8.0 | % | 395 | -1.1 | % | |||||||||||||
Load factor | 61.6 | % | 62.6 | % | -1.0 p.p. | 65.0 | % | -3.4 p.p. | ||||||||||||
Break-even load factor | 52.9 | % | 67.8 | % | -14.9 p.p. | 58.9 | % | -6.0 p.p. | ||||||||||||
Yield (cents) | 20.9 | 25.2 | -16.9 | % | 25.0 | -16.4 | % | |||||||||||||
RASM (cents) | 13.8 | 17.1 | -19.6 | % | 17.5 | -21.2 | % | |||||||||||||
CASM (cents) | 12.1 | 17.3 | -29.9 | % | 14.0 | -13.4 | % | |||||||||||||
CASM - excl. fuel (cents) | 9.3 | 12.1 | -23.7 | % | 9.9 | -6.3 | % | |||||||||||||
Fuel gallons consumed (mm) | 6.3 | 6.1 | 4.3 | % | 6.4 | -1.5 | % | |||||||||||||
Average price of Fuel - Net of Hedges (US$) | 1.77 | 3.07 | -42.2 | % | 2.78 | -36.2 | % |
9
Income Statement - USGAAP
(US$ Thousands)
Unaudited | Unaudited | % | Unaudited | % | ||||||||||||||||
1Q09 | 1Q08 | Change | 4Q08 | Change | ||||||||||||||||
Operating Revenues | ||||||||||||||||||||
Passenger Revenue | 293,152 | 280,224 | 4.6 | % | 325,849 | -10.0 | % | |||||||||||||
Cargo, mail and other | 15,604 | 15,662 | -0.4 | % | 20,210 | -22.8 | % | |||||||||||||
Total Operating Revenue | 308,756 | 295,886 | 4.3 | % | 346,059 | -10.8 | % | |||||||||||||
Operating Expenses | ||||||||||||||||||||
Aircraft fuel | 73,472 | 84,344 | -12.9 | % | 91,408 | -19.6 | % | |||||||||||||
Salaries and benefits | 36,733 | 34,147 | 7.6 | % | 37,484 | -2.0 | % | |||||||||||||
Passenger servicing | 26,019 | 23,235 | 12.0 | % | 26,280 | -1.0 | % | |||||||||||||
Commissions | 13,223 | 16,961 | -22.0 | % | 14,798 | -10.6 | % | |||||||||||||
Reservations and sales | 13,040 | 13,256 | -1.6 | % | 13,187 | -1.1 | % | |||||||||||||
Maintenance, material and repairs | 16,860 | 17,323 | -2.7 | % | 17,737 | -4.9 | % | |||||||||||||
Depreciation | 11,928 | 10,000 | 19.3 | % | 11,326 | 5.3 | % | |||||||||||||
Flight operations | 14,935 | 12,979 | 15.1 | % | 14,680 | 1.7 | % | |||||||||||||
Aircraft rentals | 12,366 | 10,673 | 15.9 | % | 10,078 | 22.7 | % | |||||||||||||
Landing fees and other rentals | 8,376 | 8,008 | 4.6 | % | 8,305 | 0.9 | % | |||||||||||||
Other | 12,886 | 13,246 | -2.7 | % | 16,766 | -23.1 | % | |||||||||||||
Special fleet charges | - | - | - | - | - | |||||||||||||||
Total Operating Expense | 239,838 | 244,172 | -1.8 | % | 262,049 | -8.5 | % | |||||||||||||
Operating Income | 68,918 | 51,714 | 33.3 | % | 84,010 | -18.0 | % | |||||||||||||
Non-operating Income (Expense): | ||||||||||||||||||||
Interest expense | (8,936 | ) | (10,980 | ) | -18.6 | % | (10,891 | ) | -18.0 | % | ||||||||||
Interest capitalized | 318 | 521 | -39.0 | % | 525 | -39.4 | % | |||||||||||||
Interest income | 2,563 | 2,768 | -7.4 | % | 2,863 | -10.5 | % | |||||||||||||
Other, net | 14,394 | (420 | ) | -3527.3 | % | (42,639 | ) | -133.8 | % | |||||||||||
Total Non-Operating Income/(Expense) | 8,339 | (8,111 | ) | -202.8 | % | (50,142 | ) | -116.6 | % | |||||||||||
Income before Income Taxes | 77,256 | 43,603 | 77.2 | % | 33,868 | 128.1 | % | |||||||||||||
Provision for Income Taxes | 5,641 | 4,104 | 37.5 | % | 8,113 | -30.5 | % | |||||||||||||
Net Income | 71,615 | 39,499 | 81.3 | % | 25,755 | 178.1 | % | |||||||||||||
Basic EPS | 1.67 | 0.92 | 81.6 | % | 0.60 | 179.9 | % | |||||||||||||
Basic Shares | 42,907,967 | 42,985,220 | -0.2 | % | 43,194,566 | -0.7 | % | |||||||||||||
Diluted EPS | 1.65 | 0.91 | 81.2 | % | 0.59 | 177.8 | % | |||||||||||||
Diluted Shares | 43,463,759 | 43,432,584 | 0.1 | % | 43,425,896 | 0.1 | % |
10
Copa Holdings, S.A. | ||||||||||||
Balance Sheet - USGAAP | ||||||||||||
(US$ Thousands) | March 31, | December 31, | March 31, | |||||||||
2009 | 2008 | 2008 | ||||||||||
(Unaudited) | (Audited) | (Unaudited) | ||||||||||
ASSETS | ||||||||||||
Current Assets: | ||||||||||||
Cash and cash equivalents | $ | 302,905 | $ | 220,808 | $ | 234,593 | ||||||
Short-term investments | 92,568 | 176,018 | 70,500 | |||||||||
Total cash, cash equivalents and short-term investments | 395,473 | 396,826 | 305,093 | |||||||||
Accounts receivable, net of allowance for doubtful accounts | 82,021 | 70,609 | 84,194 | |||||||||
Accounts receivable from related parties | 3,169 | 4,592 | 3,462 | |||||||||
Expendable parts and supplies, net of allowance for obsolescence | 20,751 | 18,405 | 16,526 | |||||||||
Prepaid expenses | 23,270 | 26,694 | 25,317 | |||||||||
Other current assets | 5,419 | 5,338 | 15,593 | |||||||||
Total Current Assets | 530,103 | 522,464 | 450,185 | |||||||||
Long-term investments | 7,652 | 11,145 | 17,538 | |||||||||
Property and Equipment: | ||||||||||||
Owned property and equipment: | ||||||||||||
Flight equipment | 1,415,590 | 1,372,352 | 1,195,518 | |||||||||
Other equipment | 57,109 | 55,291 | 53,352 | |||||||||
1,472,699 | 1,427,643 | 1,248,870 | ||||||||||
Less: Accumulated depreciation | (186,222 | ) | (174,835 | ) | (147,667 | ) | ||||||
1,286,477 | 1,252,808 | 1,101,203 | ||||||||||
Purchase deposits for flight equipment | 80,674 | 84,861 | 74,046 | |||||||||
Total Property and Equipment | 1,367,151 | 1,337,669 | 1,175,249 | |||||||||
Other Assets: | ||||||||||||
Net pension asset | 1,658 | 1,486 | 1,171 | |||||||||
Goodwill | 19,038 | 21,732 | 26,767 | |||||||||
Intangible asset | 27,913 | 31,865 | 39,247 | |||||||||
Other assets | 28,977 | 27,864 | 30,604 | |||||||||
Total Other Assets | 77,586 | 82,947 | 97,789 | |||||||||
Total Assets | $ | 1,982,493 | $ | 1,954,225 | $ | 1,740,761 | ||||||
LIABILITIES AND SHAREHOLDER'S EQUITY | ||||||||||||
Current Liabilities: | ||||||||||||
Current maturities of long-term debt | $ | 114,741 | $ | 115,833 | $ | 96,243 | ||||||
Accounts payable | 50,333 | 54,066 | 51,193 | |||||||||
Accounts payable to related parties | 7,892 | 11,510 | 9,439 | |||||||||
Air traffic liability | 154,469 | 182,490 | 150,383 | |||||||||
Taxes and interest payable | 39,746 | 37,194 | 34,397 | |||||||||
Accrued expenses payable | 37,418 | 40,642 | 57,342 | |||||||||
Other current liabilities | 46,337 | 60,349 | 4,631 | |||||||||
Total Current Liabilities | 450,937 | 502,084 | 403,628 | |||||||||
Non-Current Liabilities: | ||||||||||||
Long-term debt | 812,124 | 800,196 | 739,886 | |||||||||
Post employment benefits liability | 2,060 | 2,072 | 1,866 | |||||||||
Other long-term liabilities | 9,052 | 8,694 | 10,273 | |||||||||
Deferred tax liabilities | 8,135 | 8,747 | 8,119 | |||||||||
Total Non-Current Liabilities | 831,371 | 819,709 | 760,144 | |||||||||
Total Liabilities | 1,282,308 | 1,321,793 | 1,163,772 | |||||||||
Shareholders' Equity: | ||||||||||||
Class A - 30,416,440 shares issued and outstanding | 20,858 | 20,761 | 20,761 | |||||||||
Class B - 12,778,125 shares issued and outstanding | 8,722 | 8,722 | 8,722 | |||||||||
Additional paid in capital | 14,664 | 13,481 | 10,037 | |||||||||
Retained earnings | 665,617 | 594,004 | 531,098 | |||||||||
Accumulated other comprehensive income (loss) | (9,676 | ) | (4,536 | ) | 6,371 | |||||||
Total Shareholders' Equity | 700,185 | 632,432 | 576,989 | |||||||||
Total Liabilities and Shareholders' Equity | $ | 1,982,493 | $ | 1,954,225 | $ | 1,740,761 |
11
Copa Holdings, S.A.
NON-GAAP FINANCIAL MEASURE RECONCILIATION
This press release includes the following non GAAP financial measures: Adjusted EBITDAR, Adjusted Net Income and Adjusted EPS. This supplemental information is presented because we believe they are useful indicators of our operating performance and are 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 U.S. GAAP measures, in particular operating income and net income. The following is a reconciliation of these non-GAAP financial measures to the comparable U.S. GAAP measures:
Reconciliation of EBITDAR | ||||||||||||
Excluding Special Items | 1Q09 | 1Q08 | 4Q08 | |||||||||
Net income as Reported | $ | 71,615 | $ | 39,499 | $ | 25,755 | ||||||
Interest Expense | (8,936 | ) | (10,980 | ) | (10,891 | ) | ||||||
Capitalized Interest | 318 | 521 | 525 | |||||||||
Interest Income | 2,563 | 2,768 | 2,863 | |||||||||
Income Taxes | (5,641 | ) | (4,104 | ) | (8,113 | ) | ||||||
EBIT | 83,311 | 51,294 | 41,371 | |||||||||
Depreciation and Amortization | 11,928 | 10,000 | 11,326 | |||||||||
EBITDA | 95,239 | 61,294 | 52,697 | |||||||||
Aircraft Rent | 12,366 | 10,673 | 10,078 | |||||||||
Other Rentals | 3,812 | 3,883 | 3,873 | |||||||||
EBITDAR | $ | 111,417 | $ | 75,850 | $ | 66,648 | ||||||
Special Items (adjustments): | ||||||||||||
Unrealized (gain) loss on fuel hedging instruments (1) | (16,163 | ) | (1,786 | ) | 39,462 | |||||||
Adjusted EBITDAR | $ | 95,254 | $ | 74,064 | $ | 106,111 |
12
Reconciliation of Net Income | ||||||||||||
Excluding Special Items | 1Q09 | 1Q08 | 4Q08 | |||||||||
Net income as Reported | $ | 71,615 | $ | 39,499 | $ | 25,755 | ||||||
Special Items (adjustments): | ||||||||||||
Unrealized (gain) loss on fuel hedging instruments (1) | (16,163 | ) | (1,786 | ) | 39,462 | |||||||
Adjusted Net Income | $ | 55,452 | $ | 37,713 | $ | 65,217 | ||||||
Shares used for Computation (in thousands) | ||||||||||||
Basic | 42,908 | 42,985 | 43,195 | |||||||||
Diluted | 43,464 | 43,433 | 43,426 | |||||||||
Adjusted earnings per share | ||||||||||||
Basic | 1.29 | 0.88 | 1.51 | |||||||||
Diluted | 1.28 | 0.87 | 1.50 |
FOOTNOTE:
(1) | The 1Q09 and 1Q08 periods included a non-cash gains of US$16.2 million and $1.8 Million, respectively, and 4Q08 period included non-cash charge of US$39.5 million resulting from the mark-to-market accounting for changes in the fair value of fuel hedging instruments. |
13