Copa Holdings Reports Net Income of US$36.7 Million and EPS of US$0.84 for the First Quarter of 2010
Excluding special items, adjusted net income came in at $56.9 million, or $1.29 per share
PANAMA CITY, May 5 /PRNewswire-FirstCall/ -- Copa Holdings, S.A. (NYSE: CPA), parent company of Copa Airlines and Aero Republica, today announced financial results for the first quarter of 2010 (1Q10). 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 US GAAP. See the accompanying reconciliation of non-GAAP financial information to GAAP financial information included in financial tables section of this earnings release. Unless otherwise stated, all comparisons with prior periods refer to the first quarter of 2009 (1Q09).
OPERATING AND FINANCIAL HIGHLIGHTS
-- Copa Holdings reported net income of US$36.7 million for 1Q10, or diluted earnings per share (EPS) of US$0.84. Excluding special items, which for 1Q10 included a US$19.8 million charge related to the devaluation of the Venezuelan currency and a US$0.4 million non-cash charge associated with the mark-to-market of fuel hedge contracts, Copa Holdings would have reported an adjusted net income of $56.9 million, or $1.29 per share, compared to an adjusted net income of US$55.5 million or US$1.26 per share for 1Q09.
-- Operating income for 1Q10 came in at US$70.8 million, representing an operating margin of 21.1% compared to an operating margin of 22.3% in 1Q09. The Company continues to consistently place amongst the most profitable airlines in the world.
-- In 1Q10, total revenues increased to US$335.2 million, representing growth of 8.6%, on 3.2% capacity expansion. Yield per passenger mile decreased 1.9% to 15.9 cents; however, operating revenue per available seat mile (RASM) increased 5.2% to 13.4 cents.
-- For 1Q10, consolidated load factor for the quarter increased 5.6 percentage points to 80.0%, as consolidated passenger traffic grew 11.0%.
-- Operating cost per available seat mile (CASM) increased 6.8%, from 9.9 cents in 1Q09 to 10.5 cents in 1Q10. CASM, excluding fuel costs, increased 8.5% from 6.8 cents in 1Q09 to 7.4 cents in 1Q10 as a result of increased maintenance costs, a stronger Colombian currency and expenses related to additional capacity mainly to support growth in the second half of 2010. Compared to 4Q09, CASM excluding fuel decreased 1.7% on comparable capacity.
-- Cash, short term and long term investments ended 1Q10 at US$361.1 million, representing 28% of the last twelve months' revenues.
-- During the first quarter, Copa Airlines took delivery of three Boeing 737-800s, while Aero Republica returned its last remaining MD-80 aircraft. As a result, Copa Holdings ended the quarter with a consolidated fleet of 58 aircraft.
-- For 1Q10, Copa Holdings reported consolidated on-time performance of 90.7% and a flight-completion factor of 99.5%, maintaining its position among the best in the industry.
-- On February 10, 2010, the Board of Directors of Copa Holdings approved the modification of the Company's dividend policy, which had provided for an annual payment of approximately 10% of our annual consolidated net income. The new dividend policy provides for annual dividend payments of up to 20% of our annual consolidated net income.
RECENT DEVELOPMENTS
-- On May 5, the Board of Directors of Copa Holdings declared an annual dividend of $1.09 per share, representing 20% of our 2009 consolidated net income. The dividend will be paid on June 15, 2010 to shareholders of record as of May 31, 2010.
Consolidated Financial &
Operating Highlights 1Q10 1Q09 % Change 4Q09 % Change
RPMs (millions) 2,005 1,807 11.0% 1,984 1.0%
ASMs (mm) 2,507 2,430 3.2% 2,498 0.4%
Load Factor 80.0% 74.4% 5.6 p.p. 79.4% 0.5 p.p.
Yield 15.9 16.2 -1.9% 16.4 -2.7%
PRASM (cents) 12.7 12.1 5.5% 13.0 -2.0%
RASM (cents) 13.4 12.7 5.2% 13.7 -2.6%
CASM (cents) 10.5 9.9 6.8% 10.9 -2.9%
Adjusted CASM (cents) (1) 10.5 9.9 6.8% 10.7 -1.1%
CASM Excl. Fuel (cents) 7.4 6.8 8.5% 7.7 -4.2%
Adjusted CASM Excl. Fuel
(cents) (1) 7.4 6.8 8.5% 7.6 -1.7%
Breakeven Load Factor (2) 62.7% 57.5% 5.2 p.p. 60.0% 2.7 p.p.
Operating Revenues (US$ mm) 335.2 308.8 8.6% 343.0 -2.3%
Operating Income (US$ mm) 70.8 68.9 2.8% 71.8 -1.3%
Adjusted Operating Income
(US$ mm)(1) 70.8 68.9 2.8% 76.6 -7.5%
Operating Margin 21.1% 22.3% -1.2 p.p. 20.9% 0.2 p.p.
Adjusted Operating Margin
(1) 21.1% 22.3% -1.2 p.p. 22.3% -1.2 p.p.
Net Income (US$ mm) 36.7 71.6 -48.7% 70.4 -47.9%
Adjusted Net Income (US$ mm)
(2) 56.9 55.5 2.7% 65.7 -13.3%
EPS - Basic and Diluted
(US$) 0.84 1.63 -48.8% 1.60 -47.9%
Adjusted EPS - Basic and
Diluted (US$) (2) 1.29 1.26 2.4% 1.49 -13.3%
# of Shares - Basic and
Diluted (000) 43,978 43,875 0.2% 43,985 0.0%
(1) Adjusted Operating Income, Adjusted Operating Margin and Adjusted CASM for 4Q09 exclude special charges related to the accrual of costs associated with the retirement of four MD-80 aircraft as a result of Aero Republica's transition to an all Embraer-190 fleet.
(2) Breakeven Load Factor, Adjusted Net Income and Adjusted EPS (Basic and Diluted) exclude: a) For 4Q09, special charges related to the accrual of costs associated with the retirement of four MD-80 aircraft as a result of Aero Republica's transition to an all Embraer-190 fleet and b) For 1Q10, 1Q09, and 4Q09 excludes non-cash charges/gains associated with the mark-to-market of fuel hedges. Additionally, for 1Q10 excludes a US$19.8 million charge related to the devaluation of the Venezuelan currency.
Note: Attached to this press release is a reconciliation of non-GAAP financial measures to the comparable US GAAP measures.
Full 1Q10 earnings release available for download at: http://investor.shareholder.com/copa/results.cfm
1Q10 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST
Date: May 6, 2010
Time: 11:00 a.m. EDT (10:00 a.m. Local Time)
Conference Call:
Dial-in Number: 888-656-7422 (U.S. Domestic Callers)
913-312-0699 (International Callers)
Webcast Link: http://investor.shareholder.com/copa/events.cfm
NON-GAAP FINANCIAL MEASURE RECONCILIATION
This press release includes the following non GAAP financial measures: Adjusted CASM, Adjusted CASM Excluding Fuel, Adjusted Operating Income, Adjusted Net Income and Adjusted EPS. 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 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 Operating Income
Excluding Special Items 1Q10 1Q09 4Q09
Operating Income as Reported $70,826 $68,918 $71,757
Special Items (adjustments):
Other Special items, net
(2) - - 4,818
Adjusted Operating Income $70,826 $68,918 $76,575
Reconciliation of Net Income
Excluding Special Items 1Q10 1Q09 4Q09
Net income as Reported $36,726 $71,615 $70,442
Special Items (adjustments):
Unrealized (gain) loss on
fuel hedging instruments
(1) 372 (16,163) (9,593)
Other special items, net
(2) 19,828 - 4,818
Adjusted Net Income $56,926 $55,452 $65,667
Shares used for Computation
(in thousands)
Basic and Diluted 43,978 43,875 43,985
Adjusted earnings per share -
Basic and Diluted 1.29 1.26 1.49
Reconciliation Operating Costs
per ASM
Excluding Fuel and Special
Items 1Q10 1Q09 4Q09
Operating Costs per ASM as
Reported 10.5 9.9 10.9
Aircraft fuel per ASM (3.1) (3.0) (3.1)
Operating Costs per ASM
excluding fuel 7.4 6.8 7.7
Special Items (adjustments):
Special Items per ASM,
net (2) - - (0.2)
Operating expenses excluding
fuel and special items 7.4 6.8 7.6
FOOTNOTES:
(1) Includes unrealized (gains) losses resulting from the mark-to-market accounting for changes in the fair value of fuel hedging instruments. For 1Q10 the Company recorded unrealized fuel hedge gain of US$0.4 million. For 1Q09 and 4Q09 the Company recorded unrealized fuel hedge losses of US$16.2 million and US$9.6 million, respectively.
(2) Other Special items include for 1Q09 a US$19.8 million charge related to the devaluation of the Venezuelan currency and for 4Q09 a US$4.8 million charges related to the accrual of costs associated with the retirement of four MD-80 aircraft as a result of Aero Republica's transition to an all Embraer- 190 fleet.
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 152 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.
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
SOURCE Copa Holdings, S.A.
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