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
November, 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$43.1 Million and EPS of US$0.99 for the Third Quarter of 2009
Copa Holdings Reports Net Income of
US$43.1 Million and EPS of US$0.99 for the Third Quarter of
2009
Excluding
special items, adjusted net income came in at US$52.6 million or US$1.20 per
share
Panama City, Panama —
November 12, 2009. Copa Holdings, S.A. (NYSE: CPA), parent company of
Copa Airlines and Aero Republica, today announced financial results for the
third quarter of 2009 (3Q09). 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 third quarter of 2008 (3Q08).
OPERATING
AND FINANCIAL HIGHLIGHTS
|
·
|
Copa
Holdings reported net income of US$43.1 million for 3Q09, or diluted
earnings per share (EPS) of US$0.99, an increase of 86.8% as compared to
net income of US$23.0 million or diluted EPS of US$0.53 in
3Q08.
|
|
·
|
Third
quarter 2009 results include a special charge of US$14.6 million 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 a US$5.1 million non-cash gain associated with the
mark-to-market of fuel hedge contracts. Excluding the impact of these
special items, the company would have reported net income of US$52.6
million and diluted EPS of $1.20, an increase of 14.3% over 3Q08 adjusted
net income. See the accompanying reconciliation of non-GAAP
financial information to GAAP financial information included in the
financial tables section of this earnings
release.
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|
·
|
Operating
income for 3Q09 came in at US$45.9 million, representing an operating
margin of 14.2%, as compared to operating income for 3Q08 of US$57.1
million. Excluding special fleet charges of US$14.6 million,
operating income would have been US$60.5 million, which would have
represented an operating margin of 18.7% for the quarter, up from 16.4% in
3Q08.
|
|
·
|
In
3Q09, total revenues reached US$323.7 million, representing a 7.2%
decline, on a 10.7% capacity expansion. Yield per passenger
mile decreased 14.2% to 15.9 cents and operating revenue per available
seat mile (RASM) decreased 16.2% to 12.7
cents.
|
|
·
|
Revenue
passenger miles (RPMs) increased 8.5% from 1.78 billion in 3Q08 to 1.93
billion in 3Q09, and available seat miles (ASMs) increased 10.7% from 2.30
billion in 3Q08 to 2.55 billion in 3Q09, with the Copa Airlines segment
increasing 11.6% and Aero Republica increasing
6.0%. Consolidated load factor decreased 1.5 percentage points
to 75.8%. Underlying Break-even load factor for 3Q09 decreased 4.8
percentage points to 59.7% from 64.5% in
3Q08.
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|
·
|
Operating
cost per available seat mile (CASM), decreased 14.0% from 12.7 cents in
3Q08 to 10.9 cents in 3Q09. Excluding special charges, CASM
would have decreased 18.5% from 12.7 cents in 3Q08 to 10.3 cents in
3Q09. CASM, excluding fuel costs and special charges, would
have decreased 1.4% from 7.3 cents in 3Q08 to 7.2 cents in
3Q09.
|
|
·
|
Cash,
short term and long term investments ended the quarter at US$376.3
million, representing 30% of the last twelve months’
revenues. During the quarter the Company made pre-delivery
payments for future aircraft deliveries in the amount of $43.6
million.
|
|
·
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Copa
Holdings ended the quarter with a consolidated fleet of 55
aircraft. Copa Airlines fleet consisted of 43 aircraft,
including 28 Boeing 737 Next Generation and 15 Embraer-190’s. Aero
Republica’s fleet consisted of 12 aircraft, including 11 Embraer-190’s and
one MD-80.
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|
·
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For
3Q09, Copa Airlines reported on-time performance of approximately 87.1%
and a flight-completion factor of 99.2%, maintaining its position among
the best in the industry.
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RECENT
DEVELOPMENTS
|
·
|
On
October 6, Aero Republica announced daily flights to Quito, Ecuador from
Bogotá, Colombia beginning December 20, 2009. With the addition
of this destination, Aero Republica will now provide service to three
international destinations from seven Colombian
cities.
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|
·
|
On
October 12, the Panamanian government authorities presented Aerotocumen
S.A. the order to proceed with the Phase 2 expansion project of Tocumen
International Airport. This project, which represents an
investment of approximately US$70 million and is expected to be completed
in early 2011, involves the expansion from 22 to 34 international gates
and will consolidate Tocumen Airport as the most complete and convenient
hub facility for intra-Latin America
travel.
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Consolidated Financial &
Operating Highlights
|
3Q09
|
3Q08
|
% Change
|
2Q09
|
% Change
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|||||||||||||||
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RPMs
(millions)
|
1,930 | 1,779 | 8.5 | % | 1,676 | 15.2 | % | |||||||||||||
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ASMs
(mm)
|
2,545 | 2,300 | 10.7 | % | 2,438 | 4.4 | % | |||||||||||||
|
Load
Factor
|
75.8 | % | 77.3 | % |
-1.5
p.p.
|
68.7 | % |
7.1
p.p.
|
||||||||||||
|
Yield
|
15.9 | 18.6 | -14.2 | % | 15.6 | 2.0 | % | |||||||||||||
|
PRASM
(cents)
|
12.1 | 14.4 | -15.9 | % | 10.7 | 12.5 | % | |||||||||||||
|
RASM
(cents)
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12.7 | 15.2 | -16.2 | % | 11.4 | 11.7 | % | |||||||||||||
|
CASM
(cents)
|
10.9 | 12.7 | -14.0 | % | 9.9 | 10.5 | % | |||||||||||||
|
Adjusted
CASM (cents) (1)
|
10.3 | 12.7 | -18.5 | % | 9.9 | 4.7 | % | |||||||||||||
|
CASM
Excl. Fuel (cents)
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7.7 | 7.3 | 6.5 | % | 7.1 | 9.7 | % | |||||||||||||
|
Adjusted
CASM Excl. Fuel (cents)
(1)
|
7.2 | 7.3 | -1.4 | % | 7.1 | 1.6 | % | |||||||||||||
|
Breakeven
Load Factor (3)
|
59.7 | % | 64.5 | % |
-4.8
p.p.
|
59.7 | % |
0.0
p.p.
|
||||||||||||
|
Operating
Revenues (US$ mm)
|
323.7 | 348.9 | -7.2 | % | 277.6 | 16.6 | % | |||||||||||||
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EBITDAR
(US$ mm)
(2)
|
79.6 | 57.1 | 39.5 | % | 91.2 | -12.6 | % | |||||||||||||
|
Adjusted
EBITDAR (US$ mm)
(2)(3)
|
89.2 | 80.0 | 11.5 | % | 64.1 | 39.1 | % | |||||||||||||
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EBITDAR
Margin (2)
|
24.6 | % | 16.4 | % |
8.2
p.p.
|
32.8 | % |
-8.2
p.p.
|
||||||||||||
|
Adjusted
EBITDAR Margin (2)(3)
|
27.5 | % | 22.0 | % |
5.6
p.p.
|
23.1 | % |
4.5
p.p.
|
||||||||||||
|
Operating
Income (US$ mm)
|
45.9 | 57.1 | -19.6 | % | 36.8 | 24.9 | % | |||||||||||||
|
Adjusted
Operating Income (US$ mm) (1)
|
60.5 | 57.1 | 6.0 | % | 36.8 | 64.6 | % | |||||||||||||
|
Operating
Margin
|
14.2 | % | 16.4 | % |
-2.2
p.p.
|
13.2 | % |
0.9
p.p.
|
||||||||||||
|
Adjusted
Operating Margin (1)
|
18.7 | % | 16.4 | % |
2.3
p.p.
|
13.2 | % |
5.5
p.p.
|
||||||||||||
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Net
Income (US$ mm)
|
43.1 | 23.0 | 87.8 | % | 55.2 | -21.8 | % | |||||||||||||
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Adjusted
Net Income (US$ mm) (3)
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52.6 | 45.8 | 14.9 | % | 28.1 | 87.4 | % | |||||||||||||
|
EPS
- Basic (US$)
|
1.00 | 0.53 | 87.1 | % | 1.27 | -21.8 | % | |||||||||||||
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Adjusted
EPS - Basic (US$) (3)
|
1.21 | 1.06 | 14.5 | % | 0.65 | 87.4 | % | |||||||||||||
|
EPS
- Diluted (US$)
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0.99 | 0.53 | 86.8 | % | 1.26 | -21.8 | % | |||||||||||||
|
Adjusted
EPS - Diluted (US$)
(3)
|
1.20 | 1.05 | 14.3 | % | 0.64 | 87.3 | % | |||||||||||||
|
Weighted
Avg. # of Shares - Basic (000)
|
43,344 | 43,195 | 0.3 | % | 43,338 | 0.0 | % | |||||||||||||
|
Weighted Avg. # of Shares - Diluted
(000)
|
43,710 | 43,491 | 0.5 | % | 43,685 | 0.1 | % | |||||||||||||
(1) Adjusted Operating Income, Adjusted
Operating Margin and Adjusted CASM for 3Q09 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) EBITDAR means earnings before
interest, taxes, depreciation, amortization and rent.
(3)
Adjusted EBITDAR,
Adjusted EBITDAR Margin, Breakeven Load Factor and Adjusted Net Income and
Adjusted EPS (Basic and Diluted) exclude: a) For 3Q09, 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 and b) For 3Q09, 3Q08 and 2Q09 exclude non-cash charges/gains
associated with the mark-to-market of fuel hedges.
Note: Attached to this press
release is a reconciliation of non-GAAP
financial measures to the comparable US GAAP measures.
2
MANAGEMENT’S
COMMENTS ON 3Q09 RESULTS
Copa
Holdings delivered another quarter of solid financial results with third quarter
operating income coming in at US$45.9 million and net income at US$43.1
million. Excluding US$14.6 million in special charges at Aero
Republica related to the accrual of costs associated with the retirement of four
MD-80 aircraft and a $5.1M non-cash gain associated with the mark-to-market of
fuel hedge contracts, operating income and net income reported would have been
US$60.5 million and US$52.6 million, respectively.
Total
revenues decreased 7.2% during the quarter, while capacity increased 10.7%,
which resulted in a 16.2% decrease in revenues per ASM (RASM) from 15.2 cents to
12.7 cents. Passenger revenues, which represented 95% of total
revenues, decreased 6.9% to US$307.4 million, due to a 15.9% decline in
passenger revenue per ASM (PRASM), driven by a 14.2% drop in yield and a 1.5
percentage point decline in consolidated load factor from 77.3% to
75.8%. However, break even load factor decreased 4.8 points from
64.5% in 3Q08 to 59.7% in 3Q09.
In 3Q09,
Copa Airlines’ yields came in at 15.1 cents, representing a decline of 11.6%
compared to 3Q08 and a 3.1% increase over 2Q09. Copa Airlines’ yields
declined year-over-year mainly as a result of lower average fares due to a less
robust demand environment. Aero Republica’s yields decreased 26.0% to
20.6 cents, as a result of a more competitive fare environment, reduced fuel
surcharges and a weaker Colombian currency. Nevertheless, the effect
of lower yields at Aero Republica was partially offset by increased traffic,
which for the quarter increased 18.3% and resulted in a load factor of 70.2%, or
7.3 percentage points above 3Q08.
Consolidated
operating expenses for 3Q09 decreased 4.8% to US$277.8 million, while
consolidated operating expenses per ASM (CASM) decreased 14.0% to 10.9
cents. CASM, excluding fuel costs and special charges, decreased 1.4%
from 7.3 cents in 3Q08 to 7.2 cents in 3Q09.
Aircraft
fuel expense decreased 35.2% or US$43.9 million compared to 3Q08, despite a
10.7% increase in available seat miles (ASMs). The Company’s
effective jet fuel price, which includes a US$7.9 million negative fuel hedge
effect in 3Q09 and a US$4.6 million positive fuel hedge effect in 3Q08,
decreased from an average of US$3.81 in 3Q08 to US$2.24 in
3Q09.
For 3Q09,
the Company had fuel hedges in place representing 28% of its consolidated
volume. Continuing with the execution of its fuel hedge policy, the
Company currently has hedged approximately 23% of its 4Q09
volume. Additionally, for both 2010 and 2011 the Company has hedged
17% and 9% of its consolidated volume, respectively.
The
Company recorded a non-operating gain of US$0.4 million for 3Q09 compared to a
US$32.4 million non-operating expense for 3Q08. Non-operating income
for 3Q09 consisted of a fuel hedge mark-to-market gain of US$5.1 million,
compared to a fuel hedge mark-to-market loss of US$22.8 million in
3Q08.
Copa
Holdings closed the quarter with US$376.3 million in cash, short term and long
term investments, representing approximately 30% of last twelve months´
revenues. During the quarter the Company funded from cash
pre-delivery payments for future aircraft deliveries in the amount of $43.6
million. Total debt at the end of 3Q09 amounted to US$900.5 million,
most of which relates to aircraft and equipment financing.
3
For 3Q09,
Aero Republica recorded an operating loss of US$9.8 million, compared to
operating income of US$5.7 million in 3Q08. Aero Republica’s operating income,
excluding the special fleet charges, would have come in at US$4.7 million,
representing an operating margin of 7.4%.
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 3Q09, Aero Republica’s capacity,
in terms of ASMs flown in Embraer-190 aircraft as a percentage of its total
capacity, increased from 50% in 3Q08 to 78% in 3Q09. By the end of
1Q10, Aero Republica will operate an all Embraer-190 fleet with an
average age of approximately two years, one of the youngest in the
industry. Additionally, as part of its international expansion, for
3Q09 Aero Republica’s international capacity represented 20% of total
capacity.
Copa
Airlines’ operational plan calls for capacity growth of approximately 14% during
2009, mostly as a result of the full year effect of capacity introduced during
the course of 2008. During the same period, Aero Republica’s capacity will
increase approximately 7% as the airline continues its transition to all
Embraer-190 fleet. Copa Holdings’ consolidated fleet is expected to
end the year at 58 aircraft, composed of 20 737-700s, 11 737-800s and 26
Embraer-190s and 1 MD-80.
Copa
Holdings continues to deliver industry-leading results, despite certain negative
factors that affect the industry as a whole. These results are the
product of a solid and resilient 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 financial
position.
OUTLOOK
FOR 2009
Based on
the Company’s year to date results, and our current expectations for the
remainder of the year, we are narrowing our capacity guidance from +/-10.0
billion to +/-9.9 billion ASMs, which would represent a 12% capacity growth for
2009. As a result of an improved demand outlook for the fourth
quarter, we are increasing full year consolidated load factor guidance from
+/-72% to +/-73%. Additionally, we are increasing RASM guidance
from +/-12.2 cents to +/-12.4 cents, as a result of expected improvement in
consolidated load factor and yield. With respect to costs, we now
expect unit costs excluding fuel, CASM ex–fuel, to increase from +/-7.2 cents to
+/- 7.3 cents, primarily as a result of additional passenger related expenses
due to improved demand. As a result, we are narrowing our operating
margin guidance from a range of 16-18% to a range of 17-18%. We
currently estimate an effective full year 2009 jet fuel price, including the
effect of current hedge contracts and into-plane costs, of US$2.17 per gallon,
up from the previous estimate of $2.16 per gallon.
|
Financial
Outlook
(US
GAAP)
|
2009
- Full Year
Revised
|
2009
- Full Year
Prior
|
2008
Actual
|
|||||||||
|
ASMs
(billion)
|
+/-9.9 | +/-10.0 | 8.8 | |||||||||
|
Average
Load Factor
|
+/-73 | % | +/-72 | % | 76 | % | ||||||
|
RASM
(cents)
|
+/-12.4 | +/-12.2 | 14.6 | |||||||||
|
CASM
Ex-fuel (cents)
|
+/- 7.3 | +/- 7.2 | 7.5 | |||||||||
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Operating Margin
|
17-18 | % | 16-18 | % | 17.4 | % | ||||||
4
OUTLOOK
FOR 2010 – PRELIMINARY
For 2010,
preliminary guidance calls for consolidated capacity growth of approximately
10%. Load factors are expected to come in above 2009 levels; while unit
revenues (RASM) are expected to increase approximately 3% mainly as a result an
improved demand environment which we expect will result in both higher load
factors and yields. Unit costs excluding fuel, CASM ex-fuel, are expected
to come in below 2009 levels. The estimated effective price per
gallon of jet fuel, including the effect of current hedge contracts and into
plane costs for 2010 is US$2.23. As a result, the Company is
projecting an operating margin in the range of 19.0% to 21.0% for
2010.
|
Financial
Outlook (US GAAP)
|
2010
- Full Year
|
|||
|
ASMs
(billion)
|
+/-10.9 | |||
|
Average
Load Factor
|
+/-75 | % | ||
|
RASM
(cents)
|
+/-12.8 | |||
|
CASM
Ex-fuel (cents)
|
+/- 7.0 | |||
|
Operating Margin
|
19-21 | % | ||
CONSOLIDATED
THIRD QUARTER RESULTS
Operating
revenue
Consolidated
revenue for 3Q09 totaled US$323.7 million, a 7.2% or US$25.2 million
decline from operating revenue of US$348.9 million in 3Q08, mainly due to a
5.2% or US$14.6 million decrease in Copa Airlines’ operating revenue and a 13.1%
or US$9.7 million decline in Aero Republica’s operating revenue.
Copa Airlines operating
revenue
Copa
Airlines operating revenue for 3Q09 totaled US$264.8 million, a 5.2% decline
from operating revenue of US$279.3 million in 3Q08. This decline
was primarily due to a 5.5% or US$14.4 million drop in passenger
revenue.
Passenger
revenue. For 3Q09, passenger
revenue totaled US$248.3 million, a 5.5% decline from passenger revenue of
US$262.7 million in 3Q08 as ASMs increased by 11.6% in 3Q09 as compared to
3Q08. Passenger yield decreased 11.6% to 15.1 cents, while load
factor decreased 3.4 percentage points from 80.3% in 3Q08 to 76.9% in
3Q09.
Cargo, mail and
other. Cargo, mail and other
revenue totaled US$16.4 million in 3Q09, a 1.0% decline from cargo, mail and
other of US$16.6 million in 3Q08.
Aero Republica operating
revenue
During
3Q09, Aero Republica generated operating revenue of US$64.2 million,
representing a 13.1% decline from 3Q08. This decrease resulted mainly
from a US$8.5 million or 12.5% decline in passenger revenue. During
the quarter, Aero Republica’s capacity (ASMs) increased by 6.0%, while traffic
(RPMs) increased 18.3%, resulting in a load factor of 70.2% or 7.3 percentage
point above 3Q08. Yields decreased by 26.0% primarily due to lower
fuel surcharges, a more competitive domestic environment and a weaker Colombian
currency compared to the same period in 2008.
5
Operating
expenses
For 3Q09,
consolidated operating expenses decreased 4.8% to US$277.8 million, representing
operating cost per available seat mile (CASM) of 10.9
cents. Operating expenses, excluding special charges, totaled
US$263.2 million, a 9.8% decrease from operating expenses of
US$291.8 million for 3Q08. Operating cost per available seat
mile (CASM), excluding fuel costs and special charges, decreased 1.4% from 7.3
cents in 3Q08 to 7.2 cents in 3Q09. An overview of the major
variances on a consolidated basis follows:
Aircraft
fuel. For
3Q09, aircraft fuel totaled US$80.8 million, a US$43.9 million or 35.2%
decrease from aircraft fuel of US$124.7 million in 3Q08. This decline was
primarily a result of a 41.1% decrease in the average price per gallon of jet
fuel (all-in), which averaged US$2.24 in 3Q09 as compared to US$3.81 in 3Q08,
offset by a 9.7% increase in gallons consumed resulting from increased
capacity. The all-in average price per gallon of jet fuel for 3Q09
includes a US$7.9 million realized fuel hedge loss compared to a US$4.6 million
realized fuel hedge gain in 3Q08.
Salaries and
benefits. For 3Q09, salaries and
benefits totaled US$39.1 million, a 10.8% increase over salaries and
benefits of US$35.2 million in 3Q08. This increase was mostly a result of
an overall increase in operating headcount to support additional
capacity.
Passenger
servicing. For 3Q09, passenger
servicing totaled US$28.8 million, an 11.4% increase over passenger servicing of
US$25.9 million in 3Q08. This increase was primarily a result of an increase in
capacity and passengers carried.
Commissions.
For 3Q09, commissions totaled US$15.9 million, a 9.7% decrease from
commissions of US$17.6 million in 3Q08. This decrease was primarily a
result of a lower revenue base and a lower average commission rates at both Copa
Airlines and Aero Republica.
Reservations and
sales.
Reservations and sales totaled US$16.0 million, a 13.8% increase from
reservation and sales of US$14.0 million in 3Q08. This increase was
primarily a result of 13.3% more passengers carried.
Maintenance,
material and repairs. For 3Q09, maintenance,
material and repairs totaled US$18.2 million, a 19.7% increase over maintenance,
material and repairs of US$15.2 million in 3Q08. This increase was
primarily a result of increased capacity and the timing of major overhaul events
at Copa Airlines.
Depreciation. Depreciation totaled
US$11.9 million in 3Q09, a 7.1% increase over depreciation of
US$11.1 million in 3Q08. This increase was primarily related to the
depreciation of new aircraft and spares.
Flight
operations, aircraft
rentals. landing fees and other rentals. Combined, flight
operations, aircraft rentals, landing fees and other rentals increased 7.1% from
US$33.6 million in 3Q08 to US$36.0 million in 3Q09.
Other. Other expenses totaled
US$16.5 million in 3Q09, an increase of US$2.1 million.
Special
charges. During 3Q09, the Company
registered a US$14.6 million charge related to the accrual of costs associated
with the retirement of four MD-80 aircraft as a result of Aero
Republica’s ongoing transition to an all Embraer-190 fleet.
Copa Airlines operating
expenses
Copa
Airlines’ operating expenses decreased 8.3% to US$209.0 million from US$227.9
million in 3Q08, despite an 11.6% increase in capacity. Operating
expenses per available seat mile decreased 17.8% to 9.8 cents in 3Q09 from 11.9
cents in 3Q08. Excluding fuel costs, operating expenses per available
seat mile decreased 2.2% from 6.8 cents in 3Q08 to 6.7 cents in
3Q09.
6
Aircraft
fuel. For 3Q09,
aircraft fuel totaled US$66.7 million, a 31.7% decrease from aircraft fuel
expense of US$97.6 million in the same period in 2008. This decrease was
primarily a result of a 38.8% decline in the average price per gallon of jet
fuel (all-in), which averaged US$2.26 in 3Q09 as compared to US$3.69 in 3Q08.
The all-in average price per gallon of jet fuel for 3Q09 includes $7.7 million
realized fuel hedge loss compared to a US$4.6 million realized fuel hedge gain
in 3Q08.
Salaries and
benefits. For
3Q09, salaries and benefits totaled US$30.4 million, an 11.1% increase over
salaries and benefits of US$27.4 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$24.3 million for 3Q09, a 13.5% increase
over passenger servicing of US$21.4 million in 3Q08. This
increase was primarily the result of an increase in capacity and passengers
carried.
Commissions. Commissions totaled
US$13.0 million for 3Q09, a 5.2% decrease from commissions of US$13.7
million in 3Q08. This decrease was primarily a result of a lower revenue base
and lower average commission rate.
Reservations and
sales.
Reservations and sales totaled US$11.5 million, a 9.4% increase from
reservation and sales of US$10.5 million in 3Q08. This increase was
primarily a result of a 6.1% increase in passengers carried and higher average
rate of commissions for global distribution systems.
Maintenance,
materials and repairs.
Maintenance, materials and repairs totaled US$15.3 million in 3Q09, a
39.6% increase over maintenance, materials and repairs of US$10.9 million
in 3Q08. This increase was a result of increased capacity and the timing of
major overhaul events.
Depreciation. Depreciation totaled
US$10.9 million in 3Q09, a 9.3% increase over depreciation of
US$9.9 million in 3Q08, 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 decreased 1.7% from
US$26.2 million in 3Q08 to US$25.7 million in 3Q09.
Other. Other expenses increased
US$1.0 million from US$10.4 million in 3Q08 to US$11.4 million in
3Q09.
Aero
Republica operating expenses
Aero
Republica’s operating expenses increased 8.6% to US$74.0 million in 3Q09 from
US$68.1 million in 3Q08. Operating expenses per available seat mile
(CASM) increased 2.5% to 18.1 cents in 3Q09 from 17.6 cents in
3Q08. CASM, excluding fuel costs and special charges, increased 4.1%
from 10.6 cents in 3Q08 to 11.1 cents in 3Q09.
Non-operating
income (expense)
Consolidated
non-operating income (expense) totaled a gain of US$0.4 million in 3Q09,
compared to a loss of US$32.4 million in 3Q08.
Interest
expense. Interest expense totaled US$8.1 million in 3Q09, a
22% decrease from interest expense of US$10.4 million in 3Q08, primarily as a
result of lower rates on variable rate debt.
Interest
capitalized. Interest capitalized totaled US$0.1 million in
3Q09, a 63.9% decrease from 3Q08.
Interest income. Interest
income totaled US$2.2 million, a 23.6% decrease from interest income of US$2.9
million in 3Q08, mostly a result of lower rates.
Other, net. Other
net totaled a gain of US$6.1 million in 3Q09, mainly related to a US$5.1 million
non-cash gain related to the mark-to-market of fuel hedge
contracts.
7
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 Barranquilla, Bogota, Bucaramanga, Cali, Cartagena, Medellin and
Pereira. Additionally, Aero Republica has direct flights to Caracas, Venezuela
from the cities of Bogota and Cartagena.
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.
8
Copa
Holdings, S.A.
Operating
data
|
Unaudited
|
Unaudited
|
%
|
Unaudited
|
%
|
||||||||||||||||
|
3Q09
|
3Q08
|
Change
|
2Q09
|
Change
|
||||||||||||||||
|
Copa
Holdings (Consolidated)
|
||||||||||||||||||||
|
Revenue
passengers carried (thousands)
|
1,475 | 1,302 | 13.3 | % | 1,270 | 16.2 | % | |||||||||||||
|
Revenue
passengers miles (RPMs) (mm)
|
1,930 | 1,779 | 8.5 | % | 1,676 | 15.2 | % | |||||||||||||
|
Available
seat miles (ASMs) (mm)
|
2,545 | 2,300 | 10.7 | % | 2,438 | 4.4 | % | |||||||||||||
|
Load
factor
|
75.8 | % | 77.3 | % |
-1.5
p.p.
|
68.7 | % |
7.1
p.p.
|
||||||||||||
|
Break-even
load factor
|
59.7 | % | 64.5 | % |
-4.8
p.p.
|
59.7 | % |
0.0
p.p.
|
||||||||||||
|
Yield
(cents)
|
15.9 | 18.6 | -14.2 | % | 15.6 | 2.0 | % | |||||||||||||
|
RASM
(cents)
|
12.7 | 15.2 | -16.2 | % | 11.4 | 11.7 | % | |||||||||||||
|
CASM
(cents)
|
10.9 | 12.7 | -14.0 | % | 9.9 | 10.5 | % | |||||||||||||
|
Adj.CASM
- excl. special charges and fuel (cents)
|
7.2 | 7.3 | -1.4 | % | 7.1 | 1.6 | % | |||||||||||||
|
Fuel
gallons consumed (mm)
|
35.6 | 32.4 | 9.7 | % | 33.7 | 5.5 | % | |||||||||||||
|
Average
price of Fuel - Net of Hedges (US$)
|
2.24 | 3.81 | -41.1 | % | 2.04 | 10.0 | % | |||||||||||||
|
Copa
Segment
|
||||||||||||||||||||
|
Revenue
passengers miles (RPMs) (mm)
|
1,643 | 1,536 | 7.0 | % | 1,429 | 15.0 | % | |||||||||||||
|
Available
seat miles (ASMs) (mm)
|
2,136 | 1,914 | 11.6 | % | 2,045 | 4.5 | % | |||||||||||||
|
Load
factor
|
76.9 | % | 80.3 | % |
-3.4
p.p.
|
69.9 | % |
7.0
p.p.
|
||||||||||||
|
Break-even
load factor
|
58.1 | % | 65.1 | % |
-7.0
p.p.
|
60.8 | % |
-2.7
p.p.
|
||||||||||||
|
Yield
(US$ cents)
|
15.1 | 17.1 | -11.6 | % | 14.7 | 3.1 | % | |||||||||||||
|
RASM
(cents)
|
12.4 | 14.6 | -15.1 | % | 10.9 | 13.8 | % | |||||||||||||
|
CASM
(cents)
|
9.8 | 11.9 | -17.8 | % | 9.5 | 2.7 | % | |||||||||||||
|
Adj.CASM
- excl. special charges and fuel (cents)
|
6.6 | 6.8 | -3.1 | % | 6.7 | -1.4 | % | |||||||||||||
|
Fuel
gallons consumed (mm)
|
29.1 | 26.2 | 11.2 | % | 27.3 | 6.4 | % | |||||||||||||
|
Average
price of Fuel - Net of Hedges (US$)
|
2.26 | 3.69 | -38.8 | % | 2.12 | 6.6 | % | |||||||||||||
|
Aero
Republica Segment
|
||||||||||||||||||||
|
Revenue
passengers miles (RPMs) (mm)
|
287 | 243 | 18.3 | % | 247 | 16.4 | % | |||||||||||||
|
Available
seat miles (ASMs) (mm)
|
409 | 386 | 6.0 | % | 393 | 4.2 | % | |||||||||||||
|
Load
factor
|
70.2 | % | 62.9 | % |
7.3
p.p.
|
62.8 | % |
7.4
p.p.
|
||||||||||||
|
Break-even
load factor
|
65.6 | % | 58.3 | % |
7.3
p.p.
|
54.1 | % |
11.5
p.p.
|
||||||||||||
|
Yield
(cents)
|
20.6 | 27.8 | -26.0 | % | 21.2 | -2.8 | % | |||||||||||||
|
RASM
(cents)
|
15.7 | 19.1 | -18.0 | % | 14.4 | 9.1 | % | |||||||||||||
|
CASM
(cents)
|
18.1 | 17.6 | 2.5 | % | 12.1 | 49.6 | % | |||||||||||||
|
Adj.CASM
- excl. special charges and fuel (cents)
|
11.1 | 11.0 | 0.8 | % | 9.3 | 18.8 | % | |||||||||||||
|
Fuel
gallons consumed (mm)
|
6.5 | 6.3 | 3.6 | % | 6.4 | 1.5 | % | |||||||||||||
|
Average
price of Fuel - Net of Hedges (US$)
|
2.18 | 4.32 | -49.6 | % | 1.70 | 28.2 | % | |||||||||||||
9
Copa
Holdings, S.A.
Income
Statement - USGAAP
(US$
Thousands)
|
Unaudited
|
Unaudited
|
%
|
Unaudited
|
%
|
||||||||||||||||
|
3Q09
|
3Q08
|
Change
|
2Q09
|
Change
|
||||||||||||||||
|
Operating
Revenues
|
||||||||||||||||||||
|
Passenger
Revenue
|
307,438 | 330,319 | -6.9 | % | 261,743 | 17.5 | % | |||||||||||||
|
Cargo,
mail and other
|
16,298 | 18,596 | -12.4 | % | 15,896 | 2.5 | % | |||||||||||||
|
Total
Operating Revenue
|
323,736 | 348,915 | -7.2 | % | 277,639 | 16.6 | % | |||||||||||||
|
Operating
Expenses
|
||||||||||||||||||||
|
Aircraft
fuel
|
80,812 | 124,678 | -35.2 | % | 68,889 | 17.3 | % | |||||||||||||
|
Salaries
and benefits
|
39,059 | 35,247 | 10.8 | % | 38,223 | 2.2 | % | |||||||||||||
|
Passenger
servicing
|
28,839 | 25,885 | 11.4 | % | 25,129 | 14.8 | % | |||||||||||||
|
Commissions
|
15,889 | 17,600 | -9.7 | % | 12,700 | 25.1 | % | |||||||||||||
|
Reservations
and sales
|
15,993 | 14,048 | 13.8 | % | 13,149 | 21.6 | % | |||||||||||||
|
Maintenance,
material and repairs
|
18,195 | 15,198 | 19.7 | % | 21,559 | -15.6 | % | |||||||||||||
|
Depreciation
|
11,926 | 11,132 | 7.1 | % | 11,966 | -0.3 | % | |||||||||||||
|
Flight
operations
|
15,511 | 14,751 | 5.2 | % | 15,071 | 2.9 | % | |||||||||||||
|
Aircraft
rentals
|
11,911 | 10,245 | 16.3 | % | 11,487 | 3.7 | % | |||||||||||||
|
Landing
fees and other rentals
|
8,557 | 8,597 | -0.5 | % | 7,798 | 9.7 | % | |||||||||||||
|
Other
|
16,545 | 14,461 | 14.4 | % | 14,917 | 10.9 | % | |||||||||||||
|
Special
fleet charges
|
14,599 | - | n/a | - | n/a | |||||||||||||||
|
Total
Operating Expense
|
277,836 | 291,842 | -4.8 | % | 240,888 | 15.3 | % | |||||||||||||
|
Operating
Income
|
45,900 | 57,073 | -19.6 | % | 36,751 | 24.9 | % | |||||||||||||
|
Non-operating
Income (Expense):
|
||||||||||||||||||||
|
Interest
expense
|
(8,090 | ) | (10,385 | ) | -22.1 | % | (8,520 | ) | -5.0 | % | ||||||||||
|
Interest
capitalized
|
141 | 391 | -63.9 | % | 233 | -39.5 | % | |||||||||||||
|
Interest
income
|
2,217 | 2,903 | -23.6 | % | 2,211 | 0.3 | % | |||||||||||||
|
Other,
net
|
6,139 | (25,263 | ) | -124.3 | % | 27,602 | -77.8 | % | ||||||||||||
|
Total
Non-Operating Income/(Expense)
|
407 | (32,354 | ) | -101.3 | % | 21,526 | -98.1 | % | ||||||||||||
|
Income
before Income Taxes
|
46,307 | 24,719 | 87.3 | % | 58,277 | -20.5 | % | |||||||||||||
|
Provision
for Income Taxes
|
3,168 | 1,745 | 81.5 | % | 3,115 | 1.7 | % | |||||||||||||
|
Net
Income
|
43,139 | 22,974 | 87.8 | % | 55,162 | -21.8 | % | |||||||||||||
|
Basic
EPS
|
1.00 | 0.53 | 87.1 | % | 1.27 | -21.8 | % | |||||||||||||
|
Basic
Shares
|
43,344,371 | 43,194,566 | 0.3 | % | 43,337,693 | 0.0 | % | |||||||||||||
|
Diluted
EPS
|
0.99 | 0.53 | 86.8 | % | 1.26 | -21.8 | % | |||||||||||||
|
Diluted
Shares
|
43,710,245 | 43,490,728 | 0.5 | % | 43,684,875 | 0.1 | % | |||||||||||||
10
Copa Holdings, S.A.
Balance
Sheet – USGAAP
(US$ Thousands)
|
September
30,
|
June
30,
|
September
30,
|
||||||||||
|
2009
|
2009
|
2008
|
||||||||||
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||
|
ASSETS
|
||||||||||||
|
Current
Assets:
|
||||||||||||
|
Cash
and cash equivalents
|
$ | 264,976 | $ | 298,479 | $ | 200,272 | ||||||
|
Short-term
investments
|
102,778 | 87,544 | 152,942 | |||||||||
|
Total
cash, cash equivalents and short-term investments
|
367,754 | 386,023 | 353,214 | |||||||||
|
Accounts
receivable, net of allowance for doubtful accounts
|
90,722 | 80,035 | 103,362 | |||||||||
|
Accounts
receivable from related parties
|
5,425 | 3,218 | 1,710 | |||||||||
|
Expendable
parts and supplies, net of allowance for obsolescence
|
23,138 | 22,481 | 17,167 | |||||||||
|
Prepaid
expenses
|
22,277 | 27,207 | 26,689 | |||||||||
|
Other
current assets
|
5,465 | 3,835 | 8,954 | |||||||||
|
Total
Current Assets
|
514,781 | 522,799 | 511,096 | |||||||||
|
Long-term
investments
|
8,577 | 8,293 | 23,055 | |||||||||
|
Property
and Equipment:
|
||||||||||||
|
Owned
property and equipment:
|
||||||||||||
|
Flight
equipment
|
1,436,216 | 1,428,433 | 1,309,928 | |||||||||
|
Other
equipment
|
61,379 | 59,728 | 53,406 | |||||||||
| 1,497,595 | 1,488,161 | 1,363,334 | ||||||||||
|
Less:
Accumulated depreciation
|
(210,067 | ) | (198,324 | ) | (164,820 | ) | ||||||
| 1,287,528 | 1,289,837 | 1,198,514 | ||||||||||
|
Purchase
deposits for flight equipment
|
165,370 | 122,364 | 68,738 | |||||||||
|
Total
Property and Equipment
|
1,452,898 | 1,412,201 | 1,267,252 | |||||||||
|
Other
Assets:
|
||||||||||||
|
Net
pension asset
|
2,003 | 1,832 | 1,463 | |||||||||
|
Goodwill
|
25,369 | 22,588 | 22,421 | |||||||||
|
Intangible
asset
|
37,197 | 33,119 | 32,876 | |||||||||
|
Other
assets
|
34,413 | 32,738 | 30,811 | |||||||||
|
Total
Other Assets
|
98,982 | 90,277 | 87,571 | |||||||||
|
Total
Assets
|
$ | 2,075,238 | $ | 2,033,570 | $ | 1,888,974 | ||||||
|
LIABILITIES
AND SHAREHOLDER'S EQUITY
|
||||||||||||
|
Current
Liabilities:
|
||||||||||||
|
Current
maturities of long-term debt
|
$ | 129,315 | $ | 157,040 | $ | 119,150 | ||||||
|
Accounts
payable
|
49,825 | 49,552 | 56,030 | |||||||||
|
Accounts
payable to related parties
|
9,060 | 6,771 | 8,453 | |||||||||
|
Air
traffic liability
|
186,985 | 157,056 | 214,641 | |||||||||
|
Taxes
and interest payable
|
41,761 | 39,346 | 39,437 | |||||||||
|
Accrued
expenses payable
|
45,490 | 39,902 | 44,966 | |||||||||
|
Other
current liabilities
|
18,924 | 20,970 | 15,453 | |||||||||
|
Total
Current Liabilities
|
481,360 | 470,637 | 498,130 | |||||||||
|
Non-Current
Liabilities:
|
||||||||||||
|
Long-term
debt
|
771,184 | 791,612 | 762,977 | |||||||||
|
Post
employment benefits liability
|
2,326 | 2,208 | 1,846 | |||||||||
|
Other
long-term liabilities
|
12,844 | 11,158 | 9,625 | |||||||||
|
Deferred
tax liabilities
|
10,685 | 9,839 | 6,280 | |||||||||
|
Total
Non-Current Liabilities
|
797,039 | 814,817 | 780,728 | |||||||||
|
Total
Liabilities
|
1,278,399 | 1,285,454 | 1,278,858 | |||||||||
|
Shareholders'
Equity:
|
||||||||||||
|
Class
A - 31,135,174 shares issued and 30,564,342 shares
outstanding
|
20,858 | 20,858 | 20,761 | |||||||||
|
Class
B - 12,778,125 shares issued and outstanding
|
8,722 | 8,722 | 8,722 | |||||||||
|
Additional
paid in capital
|
17,292 | 16,009 | 12,299 | |||||||||
|
Retained
earnings
|
747,597 | 704,523 | 568,297 | |||||||||
|
Accumulated
other comprehensive income (loss)
|
2,372 | (1,996 | ) | 38 | ||||||||
|
Total
Shareholders' Equity
|
796,841 | 748,116 | 610,117 | |||||||||
|
Total
Liabilities and Shareholders' Equity
|
$ | 2,075,239 | $ | 2,033,570 | $ | 1,888,975 | ||||||
11
Copa
Holdings, S.A.
NON-GAAP
FINANCIAL MEASURE RECONCILIATION
This
press release includes the following non GAAP financial measures: Adjusted CASM,
Adjusted CASM Excluding Fuel, Adjusted EBITDAR, Adjusted Operating Income,
Adjusted Net Income and Adjusted EPS. This supplemental
information is presented because we believe it is a useful indicators 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 US GAAP measures,
in particular operating income and net income. The following is a reconciliation
of these non-GAAP financial measures to the comparable US GAAP
measures:
|
Reconciliation
of EBITDAR
|
||||||||||||
|
Excluding
Special Items
|
3Q09
|
3Q08
|
2Q09
|
|||||||||
|
Net
income as Reported
|
$ | 43,139 | $ | 22,974 | $ | 55,162 | ||||||
|
Interest
Expense
|
(8,090 | ) | (10,385 | ) | (8,520 | ) | ||||||
|
Capitalized
Interest
|
141 | 391 | 233 | |||||||||
|
Interest
Income
|
2,217 | 2,903 | 2,211 | |||||||||
|
Income
Taxes
|
(3,168 | ) | (1,745 | ) | (3,115 | ) | ||||||
|
EBIT
|
52,039 | 31,810 | 64,353 | |||||||||
|
Depreciation
and Amortization
|
11,926 | 11,132 | 11,966 | |||||||||
|
EBITDA
|
63,965 | 42,942 | 76,319 | |||||||||
|
Aircraft
Rent
|
11,911 | 10,245 | 11,487 | |||||||||
|
Other
Rentals
|
3,772 | 3,926 | 3,345 | |||||||||
|
EBITDAR
|
$ | 79,648 | $ | 57,113 | $ | 91,150 | ||||||
|
Special
Items (adjustments):
|
||||||||||||
|
Unrealized
(gain) loss on fuel hedging instruments (1)
|
(5,089 | ) | 22,848 | (27,069 | ) | |||||||
|
Special
fleet charges (2)
|
14,599 | - | - | |||||||||
|
Adjusted
EBITDAR
|
$ | 89,158 | $ | 79,961 | $ | 64,081 | ||||||
|
Reconciliation
of Operating Income
|
||||||||||||
|
Excluding
Special Items
|
3Q09
|
3Q08
|
2Q09
|
|||||||||
|
Operating
Income as Reported
|
$ | 45,900 | $ | 57,073 | $ | 36,751 | ||||||
|
Special
Items (adjustments):
|
||||||||||||
|
Special
fleet charges (2)
|
14,599 | - | - | |||||||||
|
Adjusted
Operating Income
|
$ | 60,499 | $ | 57,073 | $ | 36,751 | ||||||
12
|
Reconciliation
of Net Income
|
||||||||||||
|
Excluding
Special Items
|
3Q09 | 3Q08 | 2Q09 | |||||||||
|
Net
income as Reported
|
$ | 43,139 | $ | 22,974 | $ | 55,162 | ||||||
|
Special
Items (adjustments):
|
||||||||||||
|
Unrealized
gain (loss) on fuel hedging instruments (1)
|
(5,089 | ) | 22,848 | (27,069 | ) | |||||||
|
Special
fleet charges (2)
|
14,599 | - | - | |||||||||
|
Adjusted
Net Income
|
$ | 52,649 | $ | 45,822 | $ | 28,093 | ||||||
|
Shares
used for Computation (in thousands)
|
||||||||||||
|
Basic
|
43,344 | 43,195 | 43,338 | |||||||||
|
Diluted
|
43,710 | 43,491 | 43,685 | |||||||||
|
Adjusted
earnings per share
|
||||||||||||
|
Basic
|
1.21 | 1.06 | 0.65 | |||||||||
|
Diluted
|
1.20 | 1.05 | 0.64 | |||||||||
|
Reconciliation
Operating Costs per ASM
|
||||||||||||
|
Excluding
Fuel and Special Items
|
3Q09 | 3Q08 | 2Q09 | |||||||||
|
Operating
Costs per ASM as Reported
|
10.9 | 12.7 | 9.9 | |||||||||
|
Aircraft
fuel per ASM
|
3.2 | (5.4 | ) | (2.8 | ) | |||||||
|
Operating
Costs per ASM excluding fuel
|
7.7 | 7.3 | 7.1 | |||||||||
|
Special
Items (adjustments):
|
||||||||||||
|
Special
fleet charges per ASM (2)
|
(0.6 | ) | - | - | ||||||||
|
Operating
expenses per ASM excluding fuel and special items
|
7.2 | 7.3 | 7.1 | |||||||||
FOOTNOTES:
|
(1)
|
Includes
unrealized (gains)/losses resulting from the mark-to-market accounting for
changes in the fair value of fuel hedging instruments. For 3Q09
and 2Q09 period the Company recorded unrealized fuel hedge gains of US$5.1
million and 27.1million, respectively. In 3Q08, the Company
recorded an unrealized fuel hedge loss of US$22.8
million.
|
|
(2)
|
Special
fleet charges for the 3Q09 period include a US$14.6 million special charge
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.
|
13
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:
11/12/2009
|
|||
|
By:
|
/s/ Victor Vial
|
||
| Name: Victor Vial | |||
| Title: CFO | |||