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Copa Holdings Reports Financial Results for the Third Quarter of 2024

1. Copa reported a net profit of $146 million, down 19% from last year. 2. Operating profit decreased by 15.3%, indicating financial performance challenges. 3. Revenue passenger miles increased by 7.6%, showing demand growth despite profit drop. 4. Load factor decreased to 86.2%, implying less efficient capacity management. 5. Dividend of $1.61 per share announced for December, signaling ongoing shareholder returns.

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FAQ

Why Bearish?

The decrease in profit and operating margin suggests potential challenges ahead for CPA, similar to past downturns in airline profitability when costs rise or demand weakens.

How important is it?

The results directly reflect Copa's financial health, influencing investor sentiment and stock performance.

Why Short Term?

Financial results will likely impact short-term market perceptions, but long-term recovery remains possible.

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CPABADALAAL
PANAMA CITY, Panama, Nov. 20, 2024 (GLOBE NEWSWIRE) -- Copa Holdings, S.A. (NYSE: CPA), today announced financial results for the third quarter of 2024 (3Q24). 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 2023 (3Q23). OPERATING AND FINANCIAL HIGHLIGHTS Copa Holdings reported a net profit of US$146.0 million for 3Q24 or US$3.50 per share, a US$28.4 million decrease compared to 3Q23 on an adjusted basis. The Company reported an operating profit of US$173.7 million and an operating margin of 20.3%, a decrease of US$31.3 million and 3.3 percentage points respectively, compared to 3Q23.Consolidated capacity, measured in available seat miles (ASMs), increased by 9.5% in the quarter compared to 3Q23.Passenger traffic for the quarter, measured in terms of revenue passenger miles (RPMs), increased by 7.6% compared to 3Q23.The Company reported an 86.2% load factor in 3Q24, a 1.6 percentage-point decrease compared to 3Q23.Operating cost per available seat mile excluding fuel (Ex-fuel CASM) decreased by 1.6% in the quarter to 5.7 cents when compared to 3Q23.Revenue per available seat mile (RASM) decreased by 10.1% to 11.0 cents compared to 3Q23, driven by a decrease of 8.7% in passenger yields and 1.6 percentage points in load factor.The Company ended the quarter with approximately US$1.3 billion in cash, short-term and long-term investments, which represent 36% of the last twelve months’ revenues.The Company closed the quarter with total debt, including lease liabilities, of US$1.9 billion, while the Adjusted Net Debt to EBITDA ratio ended at 0.6 times.During the quarter, the Company took delivery of one Boeing 737 MAX 8 aircraft, ending the quarter with a consolidated fleet of 110 aircraft – 67 Boeing 737-800s, 32 Boeing 737 MAX 9s, 9 Boeing 737-700s, 1 Boeing 737 MAX 8, and 1 Boeing 737-800 freighter.Copa Airlines had an on-time performance for the quarter of 87.3% and a flight completion factor of 99.6%, once again positioning itself among the best in the industry. Subsequent Events Copa Holdings will make its third dividend payment of the year of US$1.61 per share on December 13, 2024, to all Class A and Class B shareholders on record as of December 2, 2024. Consolidated Financial& Operating Highlights3Q243Q23VarianceVs 3Q232Q24VarianceVs 2Q24Revenue Passengers Carried (000s)3,449 3,272 5.4%3,303 4.4%Revenue Passengers OnBoard (000s)5,187 4,873 6.4%4,970 4.4%RPMs (millions)6,711 6,239 7.6%6,446 4.1%ASMs (millions)7,785 7,109 9.5%7,424 4.9%Load Factor86.2%87.8%-1.6p.p86.8%-0.6p.pYield (US$ Cents)12.2 13.4 (8.7)%12.1 0.6%PRASM (US$ Cents)10.5 11.7 (10.3)%10.5 (0.1)%RASM (US$ Cents)11.0 12.2 (10.1)%11.0 (0.5)%CASM (US$ Cents)8.7 9.3 (6.2)%8.9 (1.6)%CASM Excl. Fuel (US$ Cents)5.7 5.8 (1.6)%5.6 1.9%Fuel Gallons Consumed (millions)91.3 83.9 8.8%87.6 4.3%Avg. Price Per Fuel Gallon (US$)2.60 3.00 (13.3)%2.79 (6.9)%Average Length of Haul (miles)1,946 1,907 2.0%1,952 (0.3)%Average Stage Length (miles)1,267 1,238 2.4%1,253 1.2%Departures37,478 35,468 5.7%36,313 3.2%Block Hours120,975 112,114 7.9%116,062 4.2%Average Aircraft Utilization (hours)12.0 11.9 0.1%11.9 0.9%Operating Revenues (US$ millions)854.7 867.7 (1.5)%819.4 4.3%Operating Profit (Loss) (US$ millions)173.7 205.0 (15.3)%159.5 8.9%Operating Margin20.3%23.6%-3.3p.p19.5%0.9p.pNet Profit (Loss) (US$ millions)146.0 187.4 (22.1)%120.3 21.4%Adjusted Net Profit (Loss) (US$ millions) (1)146.0 174.4 (16.3)%120.3 21.4%Basic EPS (US$)3.50 4.72 (25.8)%2.88 21.4%Adjusted Basic EPS (US$) (1)3.50 4.39 (20.3)%2.88 21.4%Shares for calculation of Basic EPS (000s)41,728 39,730 5.0%41,715 —% (1) Excludes Special Items. This earnings release includes a reconciliation of non-IFRS financial measures to the comparable IFRS measures. FULL 3Q24 EARNINGS RELEASE AVAILABLE FOR DOWNLOAD AT: https://copa.gcs-web.com/financial-information/quarterly-results 3Q24 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST Date:November 21, 2024Time:11:00 AM US ET (11:00 AM Local Time)Join by phone:https://register.vevent.com/register/BI3c5fad4759834cbf9ffe3519a9ec3128Webcast (listen-only):https://copa.gcs-web.com/events-and-presentationsSpeakers:Pedro Heilbron, Chief Executive Officer José Montero, Chief Financial Officer About Copa Holdings Copa 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: 011 507 304-2774www.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 several 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. and Subsidiaries Consolidated statement of profit or loss (In US$ thousands)  Unaudited Unaudited %Unaudited % 3Q24 3Q23 Change2Q24 ChangeOperating Revenues        Passenger revenue818,381  833,306  (1.8%)781,497  4.7%Cargo and mail revenue24,446  23,431  4.3%25,184  (2.9%)Other operating revenue11,881  10,973  8.3%12,722  (6.6%)Total Operating Revenue854,708  867,711  (1.5%)819,403  4.3%         Operating Expenses        Fuel238,714  252,077  (5.3%)246,011  (3.0%)Wages, salaries, benefits and other employees' expenses117,877  108,416  8.7%114,878  2.6%Passenger servicing26,232  23,147  13.3%27,579  (4.9%)Airport facilities and handling charges65,029  58,243  11.7%62,768  3.6%Sales and distribution49,716  54,058  (8.0%)52,210  (4.8%)Maintenance, materials and repairs34,860  29,528  18.1%10,883  220.3%Depreciation and amortization82,797  78,359  5.7%79,462  4.2%Flight operations31,901  29,476  8.2%31,914  —%Other operating and administrative expenses33,871  29,394  15.2%34,190  (0.9%)Total Operating Expense680,998  662,697  2.8%659,896  3.2%         Operating Profit/(Loss)173,710  205,014  (15.3%)159,507  8.9%         Non-operating Income (Expense):        Finance cost(23,523) (82,926) (71.6%)(20,632) 14.0%Finance income15,565  15,108  3.0%13,537  15.0%Gain (loss) on foreign currency fluctuations(2,491) (1,566) 59.1%(16,097) (84.5%)Net change in fair value of derivatives(762) 77,058  (101.0%)2,533  (130.1%)Other non-operating income (expense)6,787  1,867  263.6%1,766  284.4%Total Non-Operating Income/(Expense)(4,425) 9,540  (146.4%)(18,892) (76.6%)         Profit before taxes169,285  214,555  (21.1%)140,615  20.4%         Income tax expense(23,259) (27,179) (14.4%)(20,362) 14.2%         Net Profit/(Loss)146,026  187,375  (22.1%)120,253  21.4% Copa Holdings, S. A. and Subsidiaries Consolidated statement of financial position(In US$ thousands)   September 2024 December 2023ASSETS (Unaudited) (Audited)Cash and cash equivalents 275,245  206,375 Short-term investments 758,560  708,809 Total cash, cash equivalents and short-term investments 1,033,805  915,184 Accounts receivable, net 201,327  156,720 Accounts receivable from related parties 2,782  2,527 Expendable parts and supplies, net 123,571  116,604 Prepaid expenses 40,422  44,635 Prepaid income tax 5,802  66 Other current assets 23,708  32,227   397,612  352,780 TOTAL CURRENT ASSETS 1,431,416  1,267,963 Long-term investments 219,731  258,934 Long-term prepaid expenses 8,849  9,633 Property and equipment, net 3,363,353  3,238,632 Right of use assets 337,684  281,146 Intangible, net 94,097  87,986 Net defined benefit assets 6,442  5,346 Deferred tax assets 22,729  30,148 Other Non-Current Assets 24,053  17,048 TOTAL NON-CURRENT ASSETS 4,076,938  3,928,872 TOTAL ASSETS 5,508,354  5,196,836 LIABILITIES    Loans and borrowings 205,144  222,430 Current portion of lease liability 59,779  68,304 Accounts payable 175,443  182,303 Accounts payable to related parties 1,312  1,228 Air traffic liability 639,211  611,856 Frequent flyer deferred revenue 136,520  124,815 Taxes Payable 41,535  44,210 Accrued expenses payable 50,085  64,940 Income tax payable 7,331  26,741 Other Current Liabilities 1,320  1,403 TOTAL CURRENT LIABILITIES 1,317,680  1,348,229      Loans and borrowings long-term 1,298,106  1,240,261 Lease Liability 295,777  215,353 Deferred tax Liabilities 57,297  36,369 Other long-term liabilities 223,541  234,474 TOTAL NON-CURRENT LIABILITIES 1,874,721  1,726,457 TOTAL LIABILITIES 3,192,400  3,074,685 EQUITY    Class A - 34,195,954 issued and 30,654,831 outstanding 23,244  23,201 Class B - 10,938,125 7,466  7,466 Additional Paid-In Capital 212,877  209,102 Treasury Stock (254,532) (204,130)Retained Earnings 1,893,880  1,581,739 Net profit 442,345  514,098 Other comprehensive loss (9,326) (9,326)TOTAL EQUITY 2,315,953  2,122,150 TOTAL EQUITY LIABILITIES 5,508,354  5,196,836  Copa Holdings, S. A. and Subsidiaries Consolidated statement of cash flowsFor the nine months ended(In US$ thousands)   2024   2023   2022  (Unaudited) (Unaudited) (Unaudited)Cash flow from operating activities 659,392   764,586   543,471 Cash flow (used in) investing activities (322,575)  (274,166)  (387,334)Cash flow (used in) financing activities (267,947)  (375,966)  (168,474)Netincrease (decrease)in cash and cash equivalents 68,870   114,454   (12,337)Cash and cash equivalents on January 1 206,375   122,424   211,081 Cash and cash equivalents at September 30$275,245  $236,878  $198,744       Short-term investments 758,560   754,799   752,812 Long-term investments 219,731   177,835   168,114 Total cash and cash equivalents and investments at September 30$1,253,536  $1,169,512  $1,119,670  Copa Holdings, S.A. NON-IFRS FINANCIAL MEASURE RECONCILIATION This press release includes the following non-IFRS financial measures: Adjusted Net Profit, Adjusted Basic EPS, and Operating CASM Excluding Fuel. 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 Net Profit3Q24 3Q23 2Q24      Net Profit as Reported$146,026  $187,375  $120,253 Interest expense related to the settlement of the convertible notes$—  $64,894  $— Net change in fair value of derivatives$—  $(77,058) $— Net change in fair value of financial investments$—  $(810) $— Adjusted Net Profit$146,026  $174,401  $120,253       Reconciliation of Adjusted Basic EPS3Q24 3Q23 2Q24      Adjusted Net Profit$146,026  $174,401  $120,253 Shares used for calculation of Basic EPS 41,728   39,730   41,715 Adjusted Basic Earnings per share (Adjusted Basic EPS)$3.50  $4.39  $2.88       Reconciliation of Operating Costs per ASM     Excluding Fuel (CASM Excl. Fuel)3Q24 3Q23 2Q24      Operating Costs per ASM as Reported (in US$ Cents) 8.7   9.3   8.9 Aircraft Fuel Cost per ASM (in US$ Cents) 3.1   3.5   3.3 Operating Costs per ASM excluding fuel (in US$ Cents) 5.7   5.8   5.6 

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