Copa Holdings Reports Financial Results for the Fourth Quarter of 2020
02/10/2021 - 04:45 PM
PANAMA CITY , Panama , Feb. 10, 2021 /PRNewswire/ -- Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the fourth quarter of 2020 (4Q20). 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 fourth quarter of 2019 (4Q19).
The financial information included in this press release is preliminary, as the Company has not yet issued its audited financial statements. This information presented herein may differ from those results. During the preparation of the financial statements and related notes and our year-end audit, additional items that would require material adjustments to the preliminary financial information included in this press release may be identified.
Due to the continued effects of the Covid-19 pandemic on the aviation industry, the Company operated on average, at approximately 27% of the capacity for the same period in 2019. Therefore, this earnings release will focus on the financial results and metrics that are relevant in these circumstances and will omit certain financial ratios, unit metrics and operational indicators that are usually provided, since they are either not measurable, not meaningful or not material on such a limited operational base.
OPERATING AND FINANCIAL HIGHLIGHTS
Copa Holdings reported a net loss of US$168.8 million for the quarter, or US$3.97 per share. Excluding special items, the Company would have reported a net loss of US$85.2 million , or US$2.00 per share. Special items for the quarter include an US$80.1 million unrealized mark-to-market loss related to the Company's convertible notes, a US$4.4 million asset impairment charge on the Boeing 737-700 fleet, and a US$0.9 million gain on the Embraer assets held for sale. Copa Holdings reported an operating loss of US$95.1 million for the quarter. Excluding special items, the Company would have reported an operating loss of US$91.5 million . For the full year 2020, Copa Holdings reported a net loss of US$598.6 million , or US$14.08 per share. Excluding special items, the Company would have reported a net loss of US$259.5 million , or US$6.11 per share. Special items for the full year include a US$191.2 million in total impairment charges related to the Boeing 737-700 fleet, a US$98.7 million unrealized mark-to-market loss on to the Company's convertible notes, and a US$49.2 million expected loss on the Embraer assets held for sale. For the full year 2020, Copa Holdings reported an operating loss of US$460.9 million . Excluding special items, the Company would have reported an operating loss of US$220.6 million for 2020. Cash consumption, defined as cash disbursements less proceeds, excluding extraordinary financing activities and asset sales, averaged approximately US$6 million per month during the quarter. Cash consumption for the quarter benefited from changes in working capital, as cash proceeds increased ahead of capacity growth, while cash outflows lagged given the timing of certain accounts payable. The Company ended the quarter with US$1.3 billion of available liquidity, consisting of approximately US$1.0 billion in cash, short-term and long-term investments, and committed and undrawn credit facilities of US$305 million . The Company closed the quarter with total debt, including lease liabilities, of US$1.4 billion . The Company's flight operations, measured in terms of available seat miles (ASMs), represented 15% in October, 28% in November, and 39% in December, as compared to the same periods in 2019. For the quarter, the Company's ASMs were approximately 27% of ASMs in the same period in 2019. During the quarter, the Company completed the delivery of 5 Embraer 190 aircraft that were previously sold to a third party. As of December 31, 2020 , there were 8 Embraer 190 aircraft sold and pending to be delivered. In December, The Export-Import Bank of the United States authorized a final commitment for a guaranteed loan in an amount up to US$327.9 million , related to 7 737 MAX 9 aircraft to be delivered to the Company during 2020 and 2021. In December, the Company took delivery of 1 Boeing 737 MAX 9. Excluding the aircraft classified as assets held for sale, Copa Holdings ended the year with a consolidated fleet of 75 aircraft – 68 Boeing 737-800s and 7 Boeing 737 MAX 9s, compared to a total fleet of 102 aircraft by year end 2019. Subsequent Events
In January, the Company delivered 1 Embraer 190 aircraft, out of 14 that were sold to a third party. In January and the first week of February, the Company took delivery of 3 Boeing 737 MAX 9s and expects to receive 3 additional Boeing 737 MAX 9s by the end of the first quarter. During the month of February, the company added new credit facility commitments for an aggregate amount of US$40 million , bringing the total of undrawn committed credit facilities to US$345 million . The Company has reached an agreement with Boeing regarding compensation related to the Boeing 737 MAX grounding. Terms remain confidential.
Consolidated Financial
4Q20
4Q19
Variance
3Q20
Variance
2020
2019
Variance
Revenue Passengers Carried (000s)
696
2,633
-73.6%
30
2256.3%
2,852
10,474
-72.8%
RPMs (millions)
1,267
5,244
-75.8%
57
2130.0%
5,812
21,303
-72.7%
ASMs (millions)
1,684
6,149
-72.6%
95
1667.7%
7,301
25,113
-70.9%
Load Factor
75.3%
85.3%
-10.0 p.p.
59.7%
15.6 p.p.
79.6%
84.8%
-5.2 p.p.
Fuel Gallons Consumed (millions)
20.75
78.94
-73.7%
1.32
1469.1%
92.8
321.4
-71.1%
Avg. Price Per Fuel Gallon (US$)
1.41
2.16
-34.7%
1.41
-0.3%
1.81
2.16
-16.0%
Average Length of Haul (miles)
1,822
1,992
-8.5%
1,925
-5.4%
2,038
2,034
0.2%
Average Stage Length (miles)
1,211
1,279
-5.4%
1,081
12.0%
1,278
1,288
-0.8%
Departures
8,795
32,441
-72.9%
559
1473.3%
37,865
131,819
-71.3%
Block Hours
26,870
105,620
-74.6%
1,710
1471.8%
122,968
431,749
-71.5%
Average Aircraft Utilization (hours) (2)
5.2
11.3
-53.8%
0.9
477.8%
7.5
11.4
-70.8%
Operating Revenues (US$ millions)
158.6
681.9
-76.7%
32.4
389.9%
801.0
2,707.4
-70.4%
Operating Profit (Loss) (US$ millions)
-95.1
17.8
-633.9%
-107.0
-11.1%
-460.9
346.2
-233.2%
Adjusted Operating Profit (Loss) (US$ millions) (1)
-91.5
107.1
-185.4%
-107.0
-14.4%
-220.6
435.5
-150.6%
Net Profit (Loss) (US$ millions)
-168.8
2.7
n/m
-118.1
43.0%
-598.6
247.0
-342.3%
Adjusted Net Profit (Loss) (US$ millions) (1)
-85.2
92.1
n/m
-121.6
-30.0%
-259.5
336.3
-177.2%
Basic EPS (US$)
-3.97
0.06
n/m
-2.78
43.0%
-14.08
5.81
-342.2%
Adjusted Basic EPS (US$) (1)
-2.00
2.17
n/m
-2.86
-30.0%
-6.11
7.92
-177.1%
Shares for calculation of Basic EPS (000s)
42,511
42,487
0.1%
42,510
0.0%
42,508
42,483
0.1%
(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 4Q20 EARNINGS RELEASE AVAILABLE FOR DOWNLOAD AT: https://copa.gcs-web.com/financial-information/quarterly-results
4Q20 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST
Date:
Feb 11, 2021
Time:
11:00 AM US ET (11:00 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: 011 507 304-2774www.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
Audited
%
4Q20
4Q19
Change
3Q20
Change
2020
2019
Change
Operating Revenues
Passenger revenue
147,535
657,940
-77.6%
27,619
434.2%
760,594
2,612,605
-70.9%
Cargo and mail revenue
7,243
16,033
-54.8%
596
1114.3%
21,002
62,460
-66.4%
Other operating revenue
3,858
7,955
-51.5%
4,167
-7.4%
19,407
32,343
-40.0%
Total Operating Revenue
158,636
681,927
-76.7%
32,382
389.9%
801,003
2,707,409
-70.4%
Operating Expenses
Fuel
28,346
171,314
-83.5%
1,287
2102.7%
166,723
696,249
-76.1%
Wages, salaries, benefits and other employees' expenses
63,599
115,036
-44.7%
44,241
43.8%
256,327
450,438
-43.1%
Passenger servicing
4,180
24,798
-83.1%
1,095
281.9%
27,567
102,103
-73.0%
Airport facilities and handling charges
16,914
44,877
-62.3%
1,752
865.2%
59,536
181,959
-67.3%
Sales and distribution
18,646
53,222
-65.0%
5,985
211.6%
70,395
210,623
-66.6%
Maintenance, materials and repairs
33,221
37,648
-11.8%
9,079
265.9%
76,948
127,562
-39.7%
Depreciation and amortization
67,850
159,812
-57.5%
63,022
7.7%
502,433
371,424
35.3%
Flight operations
5,925
24,908
-76.2%
454
1206.5%
30,028
102,806
-70.8%
Other operating and administrative expenses
15,011
32,506
-53.8%
12,435
20.7%
71,977
118,072
-39.0%
Total Operating Expense
253,693
664,123
-61.8%
139,349
82.1%
1,261,934
2,361,238
-46.6%
Operating Profit (Loss)
(95,057)
17,804
n/m
(106,966)
n/m
(460,931)
346,171
-233.2%
Non-operating Income (Expense):
Finance cost
(18,360)
(17,154)
7.0%
(16,264)
12.9%
(73,045)
(57,450)
27.1%
Finance income
3,571
6,289
-43.2%
4,394
-18.7%
19,963
24,405
-18.2%
Net change in fair value of derivatives
(80,076)
2,406
n/m
3,591
n/m
(8,459)
(15,408)
-45.1%
Gain (loss) on foreign currency fluctuations
2,361
-
n/m
(370)
n/m
(98,683)
-
n/m
Other non-operating income (expense)
1,026
(989)
n/m
(2,631)
n/m
(1,169)
(4,279)
-72.7%
Total Non-Operating Income/(Expense)
(91,478)
(9,448)
868.2%
(11,278)
711.1%
(161,392)
(52,732)
206.1%
Profit (Loss) before taxes
(186,535)
8,356
n/m
(118,245)
n/m
(622,323)
293,439
-312.1%
Income tax expense
(17,731)
5,629
n/m
(188)
n/m
(23,717)
46,437
-151.1%
Net Profit (Loss)
(168,805)
2,728
n/m
(118,057)
n/m
(598,606)
247,002
-342.3%
EPS
Basic
-3.97
0.06
n/m
-2.78
n/m
-14.08
5.81
n/m
Shares used for calculation:
Basic
42,510,573
42,486,717
42,509,959
42,508,448
42,483,048
Copa Holdings, S. A. and subsidiaries
Consolidated statement of financial position
(US$ Thousands)
December
December
2020
2019
(Unaudited)
(Audited)
ASSETS
Current Assets
Cash and cash equivalents
119,065
158,733
Short-term investments
770,816
692,403
Total cash, cash equivalents and short-term investments
889,881
851,136
Accounts receivable, net
63,206
129,634
Accounts receivable from related parties
1,429
147
Expendable parts and supplies, net
74,319
69,100
Prepaid expenses
30,473
49,034
Prepaid income tax
16,716
1,181
Other current assets
7,805
14,206
193,948
263,301
Assets held for sale
135,542
120,006
TOTAL CURRENT ASSETS
1,219,371
1,234,442
Long-term investments
119,617
134,347
Long-term accounts receivable
1,054
2,139
Long-term prepaid expenses
6,066
17,743
Property and equipment, net
2,147,486
2,532,402
Right of use assets
214,279
290,843
Intangible, net
95,568
108,116
Net employee defined benefit assets
-
249
Deferred tax assets
35,595
19,216
Other Non-Current Assets
14,348
17,881
TOTAL NON-CURRENT ASSETS
2,634,013
3,122,935
TOTAL ASSETS
3,853,384
4,357,377
LIABILITIES
Loans and borrowings
127,946
122,581
Current portion of lease liability
83,605
97,732
Accounts payable
63,461
119,332
Accounts payable to related parties
2,970
14,086
Air traffic liability
470,695
497,374
Frequent flyer deferred revenue
91,213
80,325
Taxes Payable
13,400
46,267
Employee benefits obligations
33,995
55,373
Income tax payable
1,023
9,683
Other Current Liabilities
252
83
TOTAL CURRENT LIABILITIES
888,561
1,042,836
Loans and borrowings long-term
1,035,954
938,182
Lease Liability
146,905
206,832
Derivative financial instruments
237,104
-
Net employee defined benefit liabilities
14,332
-
Other long - term liabilities
216,325
191,221
Deferred tax Liabilities
22,190
43,397
TOTAL NON-CURRENT LIABILITIES
1,672,810
1,379,633
TOTAL LIABILITIES
2,561,371
2,422,469
EQUITY
Issued Capital
Class A -33,861,872 issued and 31,421,265 outstanding
21,199
21,142
Class B common stock - 10,938,125
7,466
7,466
Additional Paid-In Capital
91,341
86,135
Treasury Stock
(136,388)
(136,388)
Retained Earnings
1,931,084
1,718,179
Net profit
(598,606)
247,002
Other comprehensive loss
(24,082)
(8,628)
TOTAL EQUITY
1,292,014
1,934,908
TOTAL EQUITY & LIABILITIES
3,853,384
4,357,377
Copa Holdings, S. A. and subsidiaries
Consolidated Statement of Cash Flows
For the twelve months ended December 31,
(In US$ thousands)
2020
2019
2018
(Unaudited)
(Audited)
(Audited)
Cash flow (used in) from operating activities
(39,515)
740,776
497,153
Cash flow used in investing activities
(93,761)
(192,868)
(149,596)
Cash flow from (used in) financing activities
93,609
(545,334)
(430,191)
Net (decrease) increase in cash and cash equivalents
(39,667)
2,574
(82,634)
Cash and cash equivalents at January 1
158,732
156,158
238,792
Cash and cash equivalents at December 31
$ 119,065
$ 158,732
$ 156,158
Short-term investments
770,816
692,403
566,200
Long-term investments
119,617
134,347
138,846
Total cash and cash equivalents and investments at December 31
$ 1,009,498
$ 985,482
$ 861,204
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
4Q20
4Q19
3Q20
FY20
FY19
Operating Profit as Reported
$ (95,057)
$ 17,804
$ (106,966)
$ (460,931)
$ 346,171
Add: Fleet Impairment charges
$ 4,400
$ 89,344
$ 191,207
$ 89,344
Add: Expected loss (gain) on Embraer assets held for sale
$ (877)
$ 49,171
Adjusted Operating Profit
$ (91,533)
$ 107,148
$ (106,966)
$ (220,552)
$ 435,515
Net Profit as Reported
$ (168,805)
$ 2,728
$ (118,057)
$ (598,606)
$ 247,002
Add: Fleet Impairment charges
$ 4,400
$ 89,344
$ 191,207
$ 89,344
Add: Expected loss (gain) on Embraer assets held for sale
$ (877)
$ 49,171
Add: Net change in fair value of derivatives
$ 80,076
$ (3,591)
$ 98,683
Adjusted Net Profit
$ (85,205)
$ 92,071
$ (121,648)
$ (259,545)
$ 336,346
Reconciliation of Adjusted Basic EPS
4Q20
4Q19
3Q20
FY20
FY19
Adjusted Net Profit
$ (85,205)
$ 92,071
$ (121,648)
$ (259,545)
$ 336,346
Shares used for calculation of Basic EPS
42,511
42,487
42,510
42,508
42,483
Adjusted Basic Earnings per share (Adjusted Basic EPS)
$ (2.00)
$ 2.17
$ (2.86)
$ (6.11)
$ 7.92
Reconciliation of Monthly Cash Consumption for 2020
4Q20
3Q20
2Q20
Beginning Cash balance
$ 1,006
$ 1,143
$ 1,127
Ending Cash balance
$ 1,009
$ 1,006
$ 1,143
Net cashflows in the quarter
$ 4
$ (137)
$ 16
Substract: Proceeds from Convertible Notes Offering
$ -
$ -
$ 343
Substract: Others proceeds (assets sold and other non-op proceeds)
$ 23
$ 22
Add: Repayment of short term credit lines
$ -
$ 50
$ 95
Cash Consumption excluding extraordinary activities
$ (19)
$ (109)
$ (232)
Monthly Cash Consumption excluding extraordinary activities
$ (6)
$ (36)
$ (77)
http://www.prnewswire.com/news-releases/copa-holdings-reports-financial-results-for-the-fourth-quarter-of-2020-301226312.html
SOURCE Copa Holdings, S.A.
