PR Newswire | Nov 17, 2021 05:01PM EST

11/17 16:00 CST

Copa Holdings Reports Financial Results for the Third Quarter of 2021 PANAMA CITY, Panama, Nov. 17, 2021

PANAMA CITY, Panama, Nov. 17, 2021 /PRNewswire/ -- Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the third quarter of 2021 (3Q21). 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 third quarter of 2019 (3Q19) (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$8.2 million for the quarter or US$0.19 per share. Excluding special items, the Company would have reported a net profit of US$29.9 million or US$0.70 per share. Special items include a US$32.1 million unrealized mark-to-market loss related to the Company's convertible notes and a passenger revenue adjustment of (US$10.4) million corresponding to unredeemed coupons from 2019 and 2020 sales. * Copa Holdings reported an operating profit of US$59.0 million for the quarter and an operating margin of 13.3%. Excluding the US$10.4 million passenger unredeemed coupon revenue adjustment, the Company would have reported an operating profit of US$48.6 million and an 11.2% operating margin. * Operating cost per available seat mile (CASM) decreased 12.4% vs. 2Q21 to 8.8 cents. While CASM, excluding fuel costs, decreased 18.6% to 6.2 cents. * Cash buildup, defined as cash proceeds minus disbursements, excluding extraordinary financing activities and asset sales but including capital expenditures and payment of financial obligations, resulted in US$54 million for 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. * Flight operations, measured in terms of available seat miles (ASMs), represented 68.9% of the capacity flown over the same period in 2019. * During the quarter, the Company announced three new destinations starting December 2021 - Atlanta in the U.S. and Armenia and Cucuta in Colombia. * During the quarter, the Company exited the last Embraer 190 in its fleet and delivered two Boeing 737-700s to their new owner. * 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 87 aircraft - 68 Boeing 737-800s, 13 Boeing 737 MAX 9s, and 6 Boeing 737-700s, compared to a fleet of 102 aircraft the Company operated prior to the COVID-19 pandemic. * The Company agreed with Boeing to accelerate the delivery of 12 Boeing 737 MAX 9s from its current order, two in 2022 and the other ten between 2023 and 2025. * Copa Airlines had an on-time performance for the quarter of 89.4% and a flight completion factor of 99.84%, once again positioning itself amongst the best in the industry.

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

Revenue Passengers Carried (000s) 1,823 2,703 -32.6% 1,175 55.1%

RPMs (millions) 3,485 5,466 -36.2% 2,268 53.7%

ASMs (millions) 4,396 6,383 -31.1% 2,949 49.1%

Load Factor 79.3% 85.6% -6.4 76.9% 2.4 p.p. p.p.

Yield (US$ Cents) 12.0 12.5 -4.5% 12.4 -3.4%

PRASM (US$ Cents) 9.5 10.7 -11.5% 9.5 -0.4%

RASM (US$ Cents) 10.1 11.1 -8.8% 10.3 -1.9%

CASM (US$ Cents) 8.8 9.0 -2.6% 10.0 -12.4%

CASM Excl. Fuel (US$ Cents) 6.2 6.2 -0.2% 7.6 -18.6%

Fuel Gallons Consumed (millions) 52.0 82.0 -36.5% 35.3 47.4%

Avg. Price Per Fuel Gallon (US$) 2.13 2.16 -1.0% 1.98 7.7%

Average Length of Haul (miles) 1,912 2,022 -5.4% 1,930 -0.9%

Average Stage Length (miles) 1,213 1,295 -6.3% 1,194 1.6%

Departures 22,559 33,373 -32.4% 15,366 46.8%

Block Hours 69,308 109,614 -36.8% 46,426 49.3%

Average Aircraft Utilization (Hours) ^ 10.7 11.5 -7.2% 8.0 33.7%(2)

Operating Revenues (US$ millions) 445.0 708.2 -37.2% 304.3 46.3%

Operating Profit (Loss) (US$ millions) 59.0 132.9 -55.6% 8.7 575.5%

Adjusted Operating Profit (Loss) (US$ 48.6 132.9 -63.4% (1.7) -3031.1%millions) ^(1)

Operating Margin 13.3% 18.8% -5.5 2.9% 10.4 p.p. p.p.

Adjusted Operating Margin ^(1) 11.2% 18.8% -7.6 -0.6% 11.8 p.p. p.p.

Net Profit (Loss) (US$ millions) 8.2 104.0 -92.1% 28.1 -70.6%

Adjusted Net Profit (Loss) (US$ 29.9 104.0 -71.2% (16.2) -284.6%millions) ^(1)

Basic EPS (US$) 0.19 2.45 -92.1% 0.66 -70.6%

Adjusted Basic EPS (US$) ^(1) 0.70 2.45 -71.3% (0.38) -284.6%

Shares for calculation of Basic EPS 42,649 42,487 0.4% 42,651 0.0%(000s)

(1) Excludes Special Items. This earnings release includes a reconciliationof non-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.(3) The Company believes that comparisons with 2019 are more relevant thanyear-over-year comparisons due to the significant impacts in 2020 of theCOVID-19 pandemic.

FULL 3Q21 EARNINGS RELEASE AVAILABLE FOR DOWNLOAD AT: https://copa.gcs-web.com/financial-information/quarterly-results

3Q21 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST

November 18, 2021Date:

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

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.copaair.com.

CONTACT:Copa Holdings S.A. Investor Relations:Ph: 011 507 304-2774 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.

CPA-G

Copa Holdings, S.A.

Income Statement - IFRS

(US$ Thousands)

Unaudited Unaudited % Unaudited %

3Q21 3Q19 Change 2Q21 Change

Operating Revenues

Passenger revenue 417,466 685,337 -39.1% 281,258 48.4%

Cargo and mail revenue 21,082 14,647 43.9% 16,689 26.3%

Other operating revenue 6,451 8,226 -21.6% 6,311 2.2%

Total Operating Revenue 444,999 708,210 -37.2% 304,259 46.3%

Operating Expenses

Fuel 112,658 177,603 -36.6% 70,156 60.6%

Wages, salaries, benefits and other employees' expenses 68,049 113,398 -40.0% 55,071 23.6%

Passenger servicing 10,576 26,204 -59.6% 7,502 41.0%

Airport facilities and handling charges 39,407 47,022 -16.2% 27,021 45.8%

Sales and distribution 36,077 52,980 -31.9% 28,441 26.8%

Maintenance, materials and repairs 24,008 30,632 -21.6% 17,773 35.1%

Depreciation and amortization 55,702 72,876 -23.6% 59,526 -6.4%

Flight operations 16,291 26,572 -38.7% 10,891 49.6%

Other operating and administrative expenses 23,222 28,047 -17.2% 19,140 21.3%

Total Operating Expense 385,989 575,334 -32.9% 295,523 30.6%

Operating Profit (Loss) 59,010 132,876 -55.6% 8,736 575.5%

Non-operating Income (Expense):

Finance cost (18,615) (12,696) 46.6% (18,625) -0.1%

Finance income 2,679 6,121 -56.2% 2,745 -2.4%

Gain (loss) on foreign currency fluctuations (2,620) (9,641) -72.8% 764 -443.1%

Net change in fair value of derivatives (32,092) - n/m 33,898 -194.7%

Other non-operating income (expense) (1,573) (350) 349.1% 417 -477.6%

Total Non-Operating Income/(Expense) (52,220) (16,567) 215.2% 19,198 -372.0%

Profit (Loss) before taxes 6,790 116,309 -94.2% 27,935 -75.7%

Income tax expense 1,453 (12,332) -111.8% 138 953.0%

Net Profit (Loss) 8,242 103,978 -92.1% 28,073 -70.6%

EPS

Basic 0.19 2.45 -92.1% 0.66 -70.6%

Shares used for calculation:

Basic 42,649,175 42,509,959 42,650,595

Copa Holdings, S. A. and subsidiaries

Consolidated statement of financial position

(US$ Thousands)

September December 2021 2020

ASSETS (Unaudited) (Audited)

Current Assets

Cash and cash equivalents 290,231 119,065

Short-term investments 901,645 770,816

Total cash, cash equivalents and short-term 1,191,876 889,881investments

Accounts receivable, net 110,035 63,206

Accounts receivable from related parties 1,562 1,429

Expendable parts and supplies, net 71,419 74,319

Prepaid expenses 25,650 30,473

Prepaid income tax 632 16,716

Other current assets 7,216 7,805

216,514 193,948

Asset held for sale 22,243 135,542

TOTAL CURRENT ASSETS 1,430,633 1,219,371

Long-term investments 96,955 119,617

Long-term accounts receivable 12 1,054

Long-term prepaid expenses 22,688 6,066

Property and equipment, net 2,306,626 2,147,486

Right of use assets 183,354 214,279

Intangible, net 84,530 95,568

Deferred tax assets 36,432 35,595

Other Non-Current Assets 14,788 14,348

TOTAL NON-CURRENT ASSETS 2,745,385 2,634,013

TOTAL ASSETS 4,176,018 3,853,385

LIABILITIES

Loans and borrowings 154,140 127,946

Current portion of lease liability 74,526 83,605

Accounts payable 101,201 63,461

Accounts payable to related parties 10,088 2,970

Air traffic liability 553,252 470,695

Frequent flyer deferred revenue 94,748 91,213

Taxes Payable 34,200 13,400

Employee benefits obligations 16,710 33,995

Income tax payable 2,473 1,023

Other Current Liabilities 2,606 252

TOTAL CURRENT LIABILITIES 1,043,943 888,560

Loans and borrowings long-term 1,253,536 1,035,954

Lease Liability 122,692 146,905

Net Defined Benefit Liability 12,343 14,332

Derivative financial instruments 259,417 245,560

Deferred tax Liabilities 18,104 22,190

Other long - term liabilities 251,741 216,325

TOTAL NON-CURRENT LIABILITIES 1,917,832 1,681,265

TOTAL LIABILITIES 2,961,775 2,569,824

EQUITY

Issued Capital

Class A - 33,998,654 issued and 31,552,671 21,290 21,199outstanding

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

Additional Paid-In Capital 96,463 91,341

Treasury Stock (136,483) (136,388)

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

Net profit (loss) (74,418) (607,062)

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

TOTAL EQUITY 1,214,243 1,283,561

TOTAL EQUITY LIABILITIES 4,176,018 3,853,385

Copa Holdings, S. A. and subsidiaries

Consolidated Statement of Cash Flows

For the nine months ended September 30,

(In US$ thousands)

2021 2020 2019

(Unaudited) (Unaudited) (Unaudited)

Cash flow from (used in) operating 263,252 (75,298) 548,947activities

Cash flow used in investing activities (140,844) (2,333) (32,863)

Cash flow from (used in) financing 48,758 141,162 (446,953)activities

Net increase in cash and cash 171,166 63,531 69,131equivalents

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

Cash and cash equivalents at September $ 290,231 $ $ 225,28930 222,263

Short-term investments 901,645 644,137 536,084

Long-term investments 96,956 139,503 124,169

Total cash and cash equivalents and $ 1,288,832 $ 1,005,903 $ 885,542investments at September 30

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, Operating CASM Excluding Fuel, and Cash Buildup. 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 3Q21 3Q20 2Q21 3Q19

Operating Profit as Reported $ 59,010 $ (106,966) $ 8,736 $ 132,876

Subtract: Unredeemed Ticket Revenue provision reversal $ 10,395 $ 10,395

Adjusted Operating Profit $ 48,615 $ (106,966) $ (1,659) $ 132,876

Net Profit as Reported $ 8,242 $ (118,057) $ 28,073 $ 103,978

Subtract: Unredeemed Ticket Revenue provision reversal $ 10,395 $ 10,395

Add: Net change in fair value of derivatives $ 32,092 $ (3,591) $ (33,898)

Adjusted Net Profit $ 29,939 $ (121,648) $ (16,220) $ 103,978

Reconciliation of Adjusted Basic EPS 3Q21 3Q20 2Q21 3Q19

Adjusted Net Profit $ 29,939 $ (121,648) $ (16,220) $ 103,978

Shares used for calculation of Basic EPS 42,649 42,510 42,651 42,487

Adjusted Basic Earnings per share (Adjusted Basic EPS) $ $ $ $ 0.70 (2.86) (0.38) 2.45

Reconciliation of Adjusted Operating Costs per ASM

Excluding Fuel (Adjusted CASM Excl. Fuel) 3Q21 2Q21 3Q19

Operating Costs per ASM as Reported (in US$ Cents) 8.8 10.1 9.0

Aircraft fuel per ASM (in US$ Cents) (2.6) (2.5) (2.8)

Adjusted Operating Costs per ASM excluding fuel (in US$ Cents) 6.2 7.6 6.2

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

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

Ending Cash balance $ 1,289 $ 1,282 $ 1,203 $ 1,009

Net cashflows in the quarter $ $ $ $ 7 79 194 4

Subtract: Net Proceeds from new Aircraft Financing minus Pre $ $ $ $ Delivery Payments (57) (21) 241 -

Subtract: Others proceeds (assets sold and other non-op $ $ $ $ proceeds) 11 36 20 23

Cash Buildup (Burn) excluding extraordinary activities $ $ $ $ 54 64 (68) (19)

View original content: https://www.prnewswire.com/news-releases/copa-holdings-reports-financial-results-for-the-third-quarter-of-2021-301427178.html

SOURCE Copa Holdings, S.A.