PR Newswire | Aug 4, 2021 05:30PM EDT

08/04 16:30 CDT

Copa Holdings Reports Financial Results for the Second Quarter of 2021 PANAMA CITY, Aug. 4, 2021

PANAMA CITY, Aug. 4, 2021 /PRNewswire/ -- Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the second quarter of 2021 (2Q21). 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 second quarter of 2019 (2Q19) (which the Company believes are more relevant than year-over-year comparisons due to the significant impacts in 2020 of the COVID-19 pandemic).

OPERATING AND FINANCIAL HIGHLIGHTS

* Copa Holdings reported a net profit of US$28.1 million for the quarter or US$0.66 per share. Excluding special items, the Company would have reported a net loss of US$16.2 million or US$0.38 per share. Special items include a US$33.9 million unrealized mark-to-market gain related to the Company's convertible notes and a passenger revenue adjustment of US$10.4 million related to 2019 and 2020 sales. * Copa Holdings reported an operating profit of US$8.7 million for the quarter. Excluding the US$10.4 million passenger revenue adjustment, the company would have reported an operating loss of US$1.7 million. * Cash accretion, defined as cash proceeds minus disbursements, excluding extraordinary financing activities and asset sales but including capital expenditures and payment of financial obligations, averaged approximately US$21 million per month during the quarter. * The Company ended the quarter with US$1.6 billion of available liquidity, consisting of approximately US$1.3 billion in cash, short-term and long-term investments, and US$345 million of committed and undrawn credit facilities. * The Company closed the quarter with total debt, including lease liabilities, of US$1.6 billion. * The Company's flight operations, measured in terms of available seat miles (ASMs), represented approximately 48% of the capacity flown in the same period in 2019. * During the quarter, 3 Embraer 190 aircraft exited the fleet as part of a previously agreed sale to a third party. As of June 30, 2021, there was one remaining Embraer 190 aircraft pending to be delivered to the buyer. * 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 92.1% and a flight completion factor of 99.5%, once again positioning itself amongst the best in the industry.

Subsequent Events

* In July, Copa Airlines' last remaining Embraer 190 aircraft was delivered to its new owner. * The Company entered into an agreement for the sale of 6 737-700s and has now decided to keep the remaining 6 737-700s.

Consolidated Financial 2Q21 2Q19 ^ Variance 1Q21 Variance& Operating Highlights (3) vs. 2Q19 vs. 1Q21

Revenue Passengers Carried 1,175 2,550 -53.9% 924 27.2%(000s)

RPMs (millions) 2,268 5,249 -56.8% 1,716 32.1%

ASMs (millions) 2,949 6,166 -52.2% 2,481 18.9%

Load Factor 76.9% 85.1% -8.2 p.p. 69.2% 7.7 p.p.

Yield (US$ Cents) 12.4 11.8 4.9% 10.1 23.0%

PRASM (US$ Cents) 9.5 10.1 -5.2% 7.0 36.7%

RASM (US$ Cents) 10.3 10.5 -1.4% 7.5 37.8%

CASM (US$ Cents) 10.0 9.1 9.8% 10.6 -5.4%

CASM Excl. Fuel (US$ Cents) 7.6 6.2 22.3% 8.5 -10.4%

Fuel Gallons Consumed (millions) 35.3 79.31 -55.5% 29.1 21.4%

Avg. Price Per Fuel Gallon (US$) 1.98 2.22 -10.9% 1.75 13.0%

Average Length of Haul (miles) 1,930 2,058 -6.2% 1,858 3.9%

Average Stage Length (miles) 1,194 1,279 -6.7% 1,256 -5.0%

Departures 15,366 32,676 -53.0% 12,372 24.2%

Block Hours 46,426 106,425 -56.4% 38,851 19.5%

Average Aircraft Utilization 8.0 11.2 -29.1% 6.6 21.3%(hours) ^(2)

Operating Revenues (US$ 304.3 645.1 -52.8% 185.7 63.9%millions)

Operating Profit (Loss) (US$ 8.7 82.6 -89.4% (77.1) -111.3%millions)

Adjusted Operating Profit (Loss) (1.7) 82.6 -102.0% (77.1) -97.8%(US$ millions) ^(1)

Operating Margin 2.9% 12.8% -9.9 p.p. -41.5% 44.4 p.p.

Adjusted Operating Margin ^(1) -0.6% 12.8% -13.4 p.p. -41.5% 40.9 p.p.

Net Profit (Loss) (US$ millions) 28.1 50.9 -44.8% (110.7) -125.4%

Adjusted Net Profit (Loss) (US$ (16.2) 50.9 -131.9% (95.1) -82.9%millions) ^(1)

Basic EPS (US$) 0.66 1.20 -45.0% (2.60) -125.3%

Adjusted Basic EPS (US$) ^(1) (0.38) 1.20 -131.8% (2.23) -83.0%

Shares for calculation of Basic 42,651 42,478 0.4% 42,571 0.2%EPS (000s)

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

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

The Company believes that comparisons with 2019 are more relevant than(3) year-over-year comparisons due to the significant impacts in 2020 of the COVID-19 pandemic.

FULL 2Q21 EARNINGS RELEASE AVAILABLE FOR DOWNLOAD AT:

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

2Q21 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST

August 5, 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 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 Audited % Audited %

2Q21 2Q19 Change 1Q21 Change

Operating Revenues

Passenger revenue 281,258 620,538 -54.7% 173,095 62.5%

Cargo and mail revenue 16,689 16,464 1.4% 7,956 109.8%

Other operating revenue 6,311 8,100 -22.1% 4,626 36.4%

Total Operating Revenue 304,259 645,102 -52.8% 185,677 63.9%

Operating Expenses

Fuel 70,156 177,169 -60.4% 51,308 36.7%

Wages, salaries, benefitsand other employees' 55,071 108,342 -49.2% 54,575 0.9%expenses

Passenger servicing 7,502 25,530 -70.6% 5,586 34.3%

Airport facilities and 27,021 44,698 -39.5% 22,044 22.6%handling charges

Sales and distribution 28,441 51,289 -44.5% 21,652 31.4%

Maintenance, materials and 17,773 31,235 -43.1% 19,727 -9.9%repairs

Depreciation and 59,526 70,549 -15.6% 59,450 0.1%amortization

Flight operations 10,891 25,450 -57.2% 9,410 15.7%

Other operating and 19,140 28,240 -32.2% 19,006 0.7%administrative expenses

Total Operating Expense 295,523 562,502 -47.5% 262,759 12.5%

Operating Profit (Loss) 8,736 82,601 -89.4% (77,081) -111.3%

Non-operating Income(Expense):

Finance cost (18,625) (13,573) 37.2% (17,818) 4.5%

Finance income 2,745 6,041 -54.6% 2,853 -3.8%

Gain (loss) on foreign 764 (2,213) -134.5% (1,809) -142.2%currency fluctuations

Net change in fair value of 33,898 - n/m (15,663) -316.4%derivatives

Other non-operating income 417 (2,115) -119.7% (976) -142.7%(expense)

Total Non-Operating Income/ 19,198 (11,859) -261.9% (33,412) -157.5%(Expense)

Profit (Loss) before taxes 27,935 70,742 -60.5% (110,494) -125.3%

Income tax expense (138) 19,876 -100.7% 239 -157.7%

Net Profit (Loss) 28,073 50,866 -44.8% (110,733) -125.4%

EPS

Basic 0.66 1.20 -45.0% -2.60 -125.3%

Shares used for calculation:

Basic 42,650,595 42,478,415 42,570,983

Copa Holdings, S. A. and subsidiaries

Consolidated statement of financial position

(US$ Thousands) June December

2021 2020

(Unaudited)

ASSETS

Current Assets

Cash and cash equivalents 256,764 119,065

Short-term investments 925,680 770,816

Total cash, cash equivalents and short-term investments 1,182,444 889,881

Accounts receivable, net 103,956 63,206

Accounts receivable from related parties 1,383 1,429

Expendable parts and supplies, net 70,867 74,319

Prepaid expenses 25,444 30,473

Prepaid income tax 14,264 16,716

Other current assets 7,825 7,805

223,739 193,948

Assets held for sale 34,157 135,542

TOTAL CURRENT ASSETS 1,440,339 1,219,371

Long-term investments 99,235 119,617

Long-term accounts receivable 1,042 1,054

Long-term prepaid expenses 6,554 6,066

Property and equipment, net 2,255,792 2,147,486

Right of use assets 178,103 214,279

Intangible, net 88,031 95,568

Deferred tax assets 37,854 35,595

Other Non-Current Assets 15,136 14,348

TOTAL NON-CURRENT ASSETS 2,681,748 2,634,013

TOTAL ASSETS 4,122,088 3,853,385

LIABILITIES

Loans and borrowings 153,515 127,946

Current portion of lease liability 79,573 83,605

Accounts payable 97,355 63,461

Accounts payable to related parties 4,661 2,970

Air traffic liability 538,768 470,695

Frequent flyer deferred revenue 93,036 91,213

Taxes Payable 29,587 13,400

Employee benefits obligations 13,671 33,995

Income tax payable 1,912 1,023

Other Current Liabilities 3,801 252

TOTAL CURRENT LIABILITIES 1,015,879 888,561

Loans and borrowings long-term 1,283,447 1,035,954

Lease Liability 112,003 146,905

Net employee defined benefit liabilities 12,018 14,332

Derivative financial instruments 227,325 245,560

Deferred tax Liabilities 19,534 22,190

Other long - term liabilities 247,668 216,325

TOTAL NON-CURRENT LIABILITIES 1,901,994 1,681,265

TOTAL LIABILITIES 2,917,874 2,569,825

EQUITY

Issued Capital

Class A - 33,998,981 issued and 31,545,862 outstanding 21,284 21,199

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

Additional Paid-In Capital 94,588 91,341

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

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

Net loss (82,660) (607,062)

Other comprehensive loss (24,099) (24,082)

TOTAL EQUITY 1,204,214 1,283,560

TOTAL EQUITY & LIABILITIES 4,122,088 3,853,385

Copa Holdings, S. A. and subsidiaries

Consolidated Statement of Cash Flows

For the six months ended June 30,

(In US$thousands)

2021 2020 2019

(Unaudited) (Unaudited) (Unaudited)

Cash flow from (used in) operating activities 149,669 (56,632) 331,143

Cash flow used in investing activities (119,776) (48,009) (8,691)

Cash flow from (used in) financing activities 107,806 253,205 (252,469)

Net increase in cash and cash equivalents 137,699 148,564 69,982

Cash and cash equivalents at January 1 119,065 158,733 156,158

Cash and cash equivalents at June 30 $ 256,764 $ 307,297 $ 226,140

Short-term investments 925,680 740,887 523,134

Long-term investments 99,235 94,540 144,072

Total cash and cash equivalents and investments at June 30 $ 1,281,679 $ 1,142,724 $ 893,346

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 2Q21 2Q20 1Q21 2Q19

Operating Profit as Reported $ 8,736 $ (357,875) $ (77,081) $ 82,601

Add: Unredeemed Ticket Revenue provision $ (10,395) $ 12,341reversal

Add: Fleet Impairment loss $ 186,807

Add: Expected loss (gain) on Embraer $ 50,048assets held for sale

Adjusted Operating Profit $ (1,659) $ (108,679) $ (77,081) $ 82,601

Net Profit as Reported $ 28,073 $ (386,018) $ (110,733) $ 50,866

Add: Unredeemed Ticket Revenue provision $ (10,395) $ 12,341reversal

Add: Fleet Impairment loss $ 186,807

Add: Expected loss (gain) on Embraer $ 50,048assets held for sale

Add: Net change in fair value of $ (33,898) $ 22,198 $ 15,663derivatives

Adjusted Net Profit $ (16,220) $ (114,624) $ (95,070) $ 50,866

Reconciliation of Adjusted Basic EPS 2Q21 2Q20 1Q21 2Q19

Adjusted Net Profit $ (16,220) $ (114,624) $ (95,070) $ 50,866

Shares used for calculation of Basic EPS 42,651 42,512 42,571 42,478

Adjusted Basic Earnings per share (Adjusted $ (0.38) $ (2.70) $ (2.23) $ 1.20Basic EPS)

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

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

Ending Cash balance $ 1,282 $ 1,203 $ 1,009 $ 1,006

Net cashflows in the quarter $ 79 $ 194 $ 4 $ (137)

Subtract: Net Proceeds from new Aircraft $ (21) $ 241 $ - $ -Financing & Pre Delivery Payments

Subtract: Others proceeds (assets sold $ 36 $ 20 $ 23 $ 22and other non-op proceeds)

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

Cash Consumption excluding extraordinary $ 64 $ (68) $ (19) $ (109)activities

Monthly Cash Accretion (Consumption) $ 21 $ (23) $ (6) $ (36)excluding extraordinary activities

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SOURCE Copa Holdings, S.A.