Copa Holdings Reports Net Income of US$66.0 Million and EPS of US$1.49 for the Third Quarter of 2014

PANAMA CITY, Nov. 19, 2014 /PRNewswire/ — Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the third quarter of 2014 (3Q14). The terms “Copa Holdings” or “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 financial tables section of this earnings release. Unless otherwise stated, all comparisons with prior periods refer to the third quarter of 2013 (3Q13).

OPERATING AND FINANCIAL HIGHLIGHTS

Copa Holdings reported net income of US$66.0 million for 3Q14, or diluted earnings per share (EPS) of US$1.49. Excluding special items, Copa Holdings would have reported an adjusted net income of $99.8 million, or $2.25 per share, a 14.1% decrease from adjusted net income of US$116.2 million and US$2.62 per share for 3Q13.
Operating income for 3Q14 came in at US$111.1 million, a 24.7% decrease from operating income of US$147.5 million in 3Q13. Operating margin for the period came in at 16.7% or 5.0 percentage points below 3Q13, as a result of lower unit revenues.
Total revenues decreased 2.0% to US$663.7 million. Yield per passenger mile decreased 7.7% to 15.9 cents and operating revenue per available seat mile (RASM) decreased 9.9% to 12.5 cents. Adjusting for a 10.2% increase in average length of haul, yields decreased 3.2% and RASM decreased 5.4%.
For 3Q14, passenger traffic (RPMs) grew 6.3% on an 8.7% capacity expansion. As a result, consolidated load factor came in at 76.3%, or 1.7 percentage points below 3Q13.
Operating cost per available seat mile (CASM) improved 4.1% to 10.4 cents. CASM, excluding fuel, decreased 5.7% to 6.4 cents.
Cash, short term and long term investments ended 3Q14 at US$1.13 billion, representing 41% of the last twelve months’ revenues. Of this amount, 46% is in Venezuela pending repatriation due to government currency controls.
During the third quarter, Copa Airlines took delivery of three Boeing 737-800 aircraft. As a result, Copa Holdings ended the quarter with a consolidated fleet of 96 aircraft.
For 3Q14, Copa Holdings reported consolidated on-time performance of 90.9% and a flight-completion factor of 99.8%, maintaining its position among the best in the industry.
SUBSEQUENT EVENTS

Share Repurchase program – On November 19, 2014, the board of directors of Copa Holdings approved a US$250 million share repurchase program. Purchases will be made from time to time, subject to market and economic conditions, applicable legal requirements, and other relevant factors.
Loyalty Program – On November 19, 2014, Copa Airlines and United announced to their MileagePlus members Copa’s decision to launch its own loyalty program starting in July 2015. MileagePlus will remain the Company’s frequent flyer program until end of June 2015.
4Q14 Dividend Payment – Copa Holdings expects to pay its fourth quarter dividend of US$0.96 per share on December 15, 2014, on all outstanding Class A and Class B shares, to stockholders of record as of December 4, 2014.