PR Newswire | May 5, 2021 04:45PM EDT

05/05 15:45 CDT

Copa Holdings Reports Financial Results for the First Quarter of 2021 PANAMA CITY, Panama, May 5, 2021

PANAMA CITY, Panama, May 5, 2021 /PRNewswire/ -- Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the first quarter of 2021 (1Q21). 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 first quarter of 2021 (1Q21).

OPERATING AND FINANCIAL HIGHLIGHTS

* Copa Holdings reported a net loss of US$110.7 million for the quarter, or US$2.60 per share. Excluding special items, the Company would have reported a net loss of US$95.1 million, or US$2.23 per share. Special items for the quarter include a US$15.7 million unrealized mark-to-market loss related to the Company's convertible notes. * Copa Holdings reported an operating loss of US$77.1 million for the quarter. * Cash consumption, defined as cash disbursements less proceeds, excluding extraordinary financing activities and asset sales but including capital expenditures and payment of financial obligations, averaged approximately US$23 million per month during the quarter. * The Company ended the quarter with US$1.5 billion of available liquidity, consisting of approximately US$1.2 billion in cash, short-term and long-term investments, and committed and undrawn credit facilities of US$345 million. * The Company closed the quarter with total debt, including lease liabilities, of US$1.7 billion. * The Company's flight operations, measured in terms of available seat miles (ASMs), represented approximately 39% of those in the same period in 2019. * During the quarter, 4 Embraer 190 aircraft exited the fleet as part of a previously agreed sale to a third party. As of March 31, 2021, there were 4 remaining Embraer 190 aircraft sold that are expected to leave during the second quarter. * During the quarter, the Company took delivery of 6 Boeing 737 MAX 9. Excluding the aircraft classified as assets held for sale, and including aircraft in temporary storage, Copa Holdings ended the quarter with a consolidated fleet of 81 aircraft - 68 Boeing 737-800s and 13 Boeing 737 MAX 9s, compared to a total fleet of 102 aircraft at the end of the first quarter of 2020. * During the quarter, Copa Airlines had an on-time performance of 95.0% and a flight-completion factor of 99.3%, once again positioning itself among the best in the industry.

Subsequent Events

* In April, the Company delivered 1 Embraer 190 aircraft, out of 14 that were sold to a third party.

Consolidated Financial 1Q21 1Q20 Variance 4Q20 Variance 1Q19 Variance& Operating Highlights vs. 1Q20 vs. 4Q20 vs. 1Q19

Revenue Passengers Carried (000s) 924 2,118 -56.4% 681 35.6% 2,620 -64.7%

RPMs (millions) 1,716 4,473 -61.6% 1,259 36.3% 5,345 -67.9%

ASMs (millions) 2,481 5,491 -54.8% 1,684 47.3% 6,415 -61.3%

Load Factor 69.2% 81.5% -12.3 p.p. 74.8% -5.6 83.3% -14.1 p.p. p.p.

Yield (US$ Cents) 10.1 12.8 -21.5% 11.7 -13.9% 12.1 -16.9%

PRASM (US$ Cents) 7.0 10.5 -33.3% 8.8 -20.4% 10.1 -31.0%

RASM (US$ Cents) 7.5 10.8 -31.0% 9.4 -20.6% 10.5 -28.6%

CASM (US$ Cents) 10.6 9.0 17.1% 15.1 -29.7% 8.7 21.5%

CASM Excl. Fuel (US$ Cents) 8.5 6.6 30.1% 13.4 -36.3% 6.1 40.5%

Fuel Gallons Consumed (millions) 29.08 70.02 -58.5% 20.75 40.1% 81.2 -64.2%

Avg. Price Per Fuel Gallon (US$) 1.75 1.95 -9.9% 1.41 24.2% 2.09 -15.9%

Average Length of Haul (miles) 1,858 2,112 -12.0% 1,849 0.5% 2,040 -8.9%

Average Stage Length (miles) 1,256 1,308 -3.9% 1,211 3.7% 1,299 -3.3%

Departures 12,372 28,286 -56.3% 8,795 40.7% 33,329 -62.9%

Block Hours 38,851 93,568 -58.5% 26,870 44.6% 110,089 -64.7%

Average Aircraft Utilization (hours) ^(2) 6.6 10.7 -38.6% 5.2 26.8% 12 -43.9%

Operating Revenues (US$ millions) 185.7 595.5 -68.8% 158.6 17.0% 672.2 -72.4%

Operating Profit (Loss) (US$ millions) -77.1 98.7 -178.1% -95.1 -18.9% 112.9 -168.3%

Adjusted Operating Profit (Loss) (US$ millions) ^(1) -77.1 98.7 -178.1% -91.5 -15.8% 112.9 -168.3%

Operating Margin -41.5% 16.6% -58.1 p.p. -59.9% 18.4 16.8% -58.3 p.p. p.p.

Adjusted Operating Margin ^(1) -41.5% 16.6% -58.1 p.p. -57.7% 16.2 16.8% -58.3 p.p. p.p.

Net Profit (Loss) (US$ millions) -110.7 74.3 -249.1% -177.3 -37.5% 89.4 -223.8%

Adjusted Net Profit (Loss) (US$ millions) ^(1) -95.1 74.3 -228.0% -85.2 11.6% 89.4 -206.3%

Basic EPS (US$) -2.60 1.75 -248.8% -4.17 -37.6% 2.11 -223.5%

Adjusted Basic EPS (US$) ^(1) -2.23 1.75 -227.8% -2.00 11.4% 2.11 -206.1%

Shares for calculation of Basic EPS (000s) 42,571 42,501 0.2% 42,511 0.1% 42,478 0.2%

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

(2) Average Aircraft Utilization is calculated based on the Company's activefleet, excluding aircraft in storage as well as those classified as assets heldfor sale.

FULL 1Q21 EARNINGS RELEASE AVAILABLE FOR DOWNLOAD AT:

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

1Q21 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST

May 6, 2021Date:

Time: 11:00 AM US ET (10:00 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

Jos? Montero, Chief Financial Officer

About Copa HoldingsCopa 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: 011 507 304-2774 www.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 %

1Q21 1Q20 Change 4Q20 Change 1Q19 Change

Operating Revenues

Passenger revenue 173,095 574,650 -69.9% 147,535 17.3% 648,790 -73.3%

Cargo and mail revenue 7,956 13,017 -38.9% 7,243 9.9% 15,316 -48.1%

Other operating revenue 4,626 7,785 -40.6% 3,858 19.9% 8,063 -42.6%

Total Operating Revenue 185,677 595,453 -68.8% 158,636 17.0% 672,169 -72.4%

Operating Expenses

Fuel 51,308 136,954 -62.5% 28,346 81.0% 170,163 -69.8%

Wages, salaries, benefits and other employees' 54,575 110,289 -50.5% 63,599 -14.2% 113,662 -52.0%expenses

Passenger servicing 5,586 21,890 -74.5% 4,180 33.6% 25,571 -78.2%

Airport facilities and handling charges 22,044 40,365 -45.4% 16,914 30.3% 45,362 -51.4%

Sales and distribution 21,652 42,011 -48.5% 18,646 16.1% 53,133 -59.2%

Maintenance, materials and repairs 19,727 27,144 -27.3% 33,221 -40.6% 28,047 -29.7%

Depreciation and amortization 59,450 66,375 -10.4% 67,850 -12.4% 68,187 -12.8%

Flight operations 9,410 23,731 -60.3% 5,925 58.8% 25,875 -63.6%

Other operating and administrative expenses 19,006 28,008 -32.1% 15,011 26.6% 29,297 -35.1%

Total Operating Expense 262,759 496,766 -47.1% 253,693 3.6% 559,296 -53.0%

Operating Profit (Loss) (77,081) 98,687 -178.1% (95,057) -18.9% 112,873 -168.3%

Non-operating Income (Expense):

Finance cost (17,818) (11,085) 60.7% (18,360) -3.0% (14,010) 27.2%

Finance income 2,853 6,320 -54.9% 3,571 -20.1% 5,954 -52.1%

Net change in fair value of derivatives (15,663) - n/m (88,532) -82.3% - n/m

Gain (loss) on foreign currency fluctuations (1,809) (10,950) -83.5% 2,361 -176.6% (5,960) -69.6%

Other non-operating income (expense) (976) (11) n/m 1,026 -195.2% (825) 18.4%

Total Non-Operating Income/(Expense) (33,412) (15,726) 112.5% (99,934) -66.6% (14,841) 125.1%

Profit (Loss) before taxes (110,494) 82,961 -233.2% (194,991) -43.3% 98,032 -212.7%

Income tax expense 239 8,687 -97.2% (17,731) -101.3% 8,600 -97.2%

Net Profit (Loss) (110,733) 74,273 -249.1% (177,261) -37.5% 89,431 -223.8%

EPS

Basic -2.60 1.75 -248.8% -4.17 -37.6% 2.11 -223.5%

Shares used for calculation:

Basic 42,570,983 42,501,338 42,510,573 42,477,761

Copa Holdings, S. A. and subsidiaries

Consolidated statement of financial position

(US$ Thousands) March December

2021 2020

(Unaudited)

ASSETS

Current Assets

Cash and cash equivalents 193,801 119,065

Short-term investments 898,453 770,816

Total cash, cash equivalents and short-term 1,092,254 889,881investments

Accounts receivable, net 68,436 63,206

Accounts receivable from related parties 1,042 1,429

Expendable parts and supplies, net 72,992 74,319

Prepaid expenses 27,556 30,473

Prepaid income tax 16,189 16,716

Other current assets 6,908 7,805

193,123 193,948

Assets held for sale 115,303 135,542

TOTAL CURRENT ASSETS 1,400,679 1,219,371

Long-term investments 111,001 119,617

Long-term accounts receivable 1,054 1,054

Long-term prepaid expenses 5,680 6,066

Property and equipment, net 2,215,264 2,147,486

Right of use assets 193,553 214,279

Intangible, net 91,316 95,568

Deferred tax assets 35,413 35,595

Other Non-Current Assets 13,917 14,348

TOTAL NON-CURRENT ASSETS 2,667,199 2,634,013

TOTAL ASSETS 4,067,878 3,853,385

LIABILITIES

Loans and borrowings 157,393 127,946

Current portion of lease liability 81,309 83,605

Accounts payable 75,917 63,461

Accounts payable to related parties 4,538 2,970

Air traffic liability 475,084 470,695

Frequent flyer deferred revenue 92,992 91,213

Taxes Payable 18,267 13,400

Employee benefits obligations 28,912 33,995

Income tax payable 1,422 1,023

Other Current Liabilities 197 252

TOTAL CURRENT LIABILITIES 936,033 888,561

Loans and borrowings long-term 1,308,987 1,035,954

Lease Liability 126,436 146,905

Net employee defined benefit liabilities 14,524 14,332

Derivative financial instruments 261,223 245,560

Deferred tax Liabilities 20,862 22,190

Other long - term liabilities 225,642 216,325

TOTAL NON-CURRENT LIABILITIES 1,957,673 1,681,265

TOTAL LIABILITIES 2,893,705 2,569,825

EQUITY

Issued Capital

Class A - 33,998,370 issued and 31,543,037 21,282 21,199outstanding

Class B common stock - 10,938,125 7,466 7,466

Additional Paid-In Capital 92,608 91,341

Treasury Stock (136,388) (136,388)

Retained Earnings 1,324,025 1,931,086

Net (loss) profit (110,733) - 607,062

Other comprehensive loss (24,086) (24,082)

TOTAL EQUITY 1,174,173 1,283,560

TOTAL EQUITY & LIABILITIES 4,067,878 3,853,385

Copa Holdings, S. A. and subsidiaries

Consolidated Statement of Cash Flows

For the three months ended March 31,

(In US$ thousands)

2021 2020 2019

(Unaudited) (Unaudited) (Unaudited)

Cash flow (used in) from operating activities (892) 106,340 144,061

Cash flow (used in) from investing activities (86,697) 19,795 (3,591)

Cash flow from (used in) financing activities 162,325 55,058 (84,361)

Net increase in cash and cash equivalents 74,736 181,193 56,109

Cash and cash equivalents at January 1 119,065 158,732 156,158

Cash and cash equivalents at March 31 $ 193,801 $ 339,925 $ 212,267

Short-term investments 898,453 672,721 556,127

Long-term investments 111,001 114,277 128,992

Total cash and cash equivalents and investments at March 31 $ 1,203,255 $ 1,126,923 $ 897,386

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 1Q21 1Q20 4Q20 1Q19

Operating Profit as Reported $ (77,081) $ 98,687 $ (95,057) $ 112,873

Add: Fleet Impairment charges $ 4,400

Add: Expected loss (gain) on Embraer assets held for sale $ (877)

Adjusted Operating Profit $ (77,081) $ 98,687 $ (91,533) $ 112,873

Net Profit as Reported $ (110,733) $ 74,273 $ (177,261) $ 89,431

Add: Fleet Impairment charges $ 4,400

Add: Expected loss (gain) on Embraer assets held for sale $ (877)

Add: Net change in fair value of derivatives $ 15,663 $ 88,532

Adjusted Net Profit $ (95,070) $ 74,273 $ (85,204) $ 89,431

Reconciliation of Adjusted Basic EPS 1Q21 1Q20 4Q20 1Q19

Adjusted Net Profit $ (95,070) $ 74,273 $ (85,204) $ 89,431

Shares used for calculation of Basic EPS 42,571 42,501 42,511 42,478

Adjusted Basic Earnings per share (Adjusted Basic EPS) $ $ $ $ (2.23) 1.75 (2.00) 2.11

Reconciliation of Monthly Cash Consumption for 2020 and 2021 1Q21 4Q20 3Q20 2Q20

Beginning Cash balance $ 1,009 $ $ $ 1,006 1,143 1,127

Ending Cash balance $ 1,203 $ $ $ 1,009 1,006 1,143

Net cashflows in the quarter $ $ $ $ 194 4 (137) 16

Subtract: Proceeds from Convertible Notes Offering $ $ $ $ - - - 343

Subtract: Net Proceeds from new Aircraft Financing $ $ $ $ 241 - - -

Subtract: Others proceeds (assets sold and other non-op $ $ $ $ proceeds) 20 23 22 -

Add: Repayment of short term credit lines $ $ $ $ - - 50 95

Cash Consumption excluding extraordinary activities $ $ $ $ (68) (19) (109) (232)

Monthly Cash Consumption excluding extraordinary activities $ $ $ $ (23) (6) (36) (77)

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SOURCE Copa Holdings, S.A.