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Copa Holdings Reports Earnings of US$30.4 Million and EPS of US$0.70 for 2Q08

Written by thomas · Filed Under Commercial 

August 18, 2008

thomas

PANAMA CITY, Aug. 14 /PRNewswire-FirstCall/ — Copa Holdings, S.A.
(NYSE: CPA), parent company of Copa Airlines and Aero Republica, today
announced financial results for the second quarter of 2008 (2Q08). The
terms “Copa Holdings” or “the Company” refer to the consolidated entity,
whose operating subsidiaries are Copa Airlines and Aero Republica. The
following financial and operating information, unless otherwise indicated,
is presented in accordance with US GAAP. Unless otherwise stated, all
comparisons with prior periods refer to the second quarter of 2007 (2Q07).

OPERATING AND FINANCIAL HIGHLIGHTS

— Copa Holdings reported net income of US$30.4 million for 2Q08, or
diluted earnings per share (EPS) of US$0.70, as compared to net income of
US$30.9 million or diluted EPS of US$0.71 in 2Q07.

— Operating income for 2Q08 came in at US$31.2 million, as compared to
operating income of US$39.0 million for 2Q07. Operating margin decreased
from 16.6% to 10.5%, maintaining its position among the world’s most
profitable airlines. These strong results were achieved despite US$37.0
million in additional fuel costs as a result of a 56% increase in the
all-in average price per gallon of jet fuel.

— In 2Q08, total revenues increased to US$297.9 million, representing
growth of 26.6 %, on an 11.3% capacity expansion. Yield per passenger mile
increased 9.6% to 18.0 cents and operating revenue per available seat mile
(RASM) increased 13.7% to 14.2 cents.

— Revenue passenger miles (RPMs) increased 15.8% from 1.35 billion in
2Q07 to 1.56 billion in 2Q08, and available seat miles (ASMs) increased
11.3% from 1.88 billion in 2Q07 to 2.09 billion in 2Q08, with the Copa
Airlines segment increasing 17.2% year-over-year and Aero Republica
decreasing 10.2%, mainly as a result of its down-gauge to an Embraer-190
fleet.

— Consolidated load factor increased 2.9 percentage points to 74.5%,
driven by a year-over-year load factor improvement at both Copa Airlines
and Aero Republica.

— Operating cost per available seat mile (CASM) increased 22.1%, from
10.4 cents in 2Q07 to 12.7 cents in 2Q08. CASM, excluding fuel costs,
increased 6.9% from 7.3 cents in 2Q07 to 7.8 cents in 2Q08, mainly due to
an increase in Aero Republica’s unit costs driven by timing of maintenance
events, Colombian currency appreciation and down-gauging to an Embraer-190
fleet.

— Liquidity including cash, short term and long term investments plus
committed credit lines ended the quarter at US$347.2 million, representing
30% of last twelve months revenues.

— On May 24, Aero Republica continued its international expansion by
initiating new direct daily service to Caracas, Venezuela, from the
Colombian cities of Bogota and Medellin. Aero Republica currently provides
service to 12 cities in Colombia as well as international connectivity with
Copa Airlines’ Hub of the Americas from the cities of Bogota, Bucaramanga,
Cali, Cartagena and Medellin.

— On June 30, Copa Airlines announced that it will begin service from
Panama and connecting cities to Belo Horizonte, Brazil, beginning August
21, 2008. More recently, Copa Airlines announced new service to three
additional destinations: Oranjestad (Aruba), Valencia (Venezuela) and Santa
Cruz (Bolivia). By year-end, Copa Airlines’ network is expected to serve 45
destinations in 24 countries in the Americas.

— During the second quarter, Copa Airlines took delivery of three
aircraft, two Embraer-190’s and one Boeing 737-800, ending the quarter with
40 aircraft. Copa Holdings ended the second quarter with a consolidated
fleet of 53 aircraft.

— For 2Q08, Copa Airlines reported an on-time performance of 89.3% and
a flight-completion factor of 99.7%, maintaining its position among the
best in the industry.

Consolidated Financial
& Operating Highlights   2Q08    2Q07     % Change      1Q08   % Change
RPMs (millions)          1,559   1,346      15.8%       1,619      -3.8%
ASMs (mm)                2,093   1,880      11.3%       2,077       0.8%
Load Factor                74.5%   71.6%   2.9 p.p.       78.0%  -3.5 p.p.
Yield                              18.0    16.4       9.6%        17.3       4.1%
PRASM (cents)             13.4    11.8      14.1%        13.5      -0.5%
RASM (cents)                  14.2    12.5      13.7%        14.2      -0.1%
CASM (cents)                    12.7    10.4      22.1%        11.8       8.4%
CASM Excl. Fuel (cents)    7.8     7.3       6.9%         7.7       0.9%
Breakeven Load Factor    64.6%   59.3%   5.3 p.p.       64.6%   0.0 p.p.
Operating
Revenues (US$ mm)       297.9   235.3      26.6%       295.9       0.7%
EBITDAR (US$ mm) (1)      66.7    61.7       8.1%        75.9     -12.1%
EBITDAR Margin (1)       22.4%   26.2%  -3.8 p.p.       25.6%  -3.2 p.p.
Operating
Income (US$ mm)          31.2    39.0     -20.0%        51.7     -39.7%
Operating Margin         10.5%   16.6%  -6.1 p.p.       17.5%  -7.0 p.p.
Net Income (US$ mm)       30.4    30.9      -1.5%        39.5     -23.0%
Net Margin               10.2%   13.1%  -2.9 p.p.       13.3%  -3.1 p.p.
EPS – Basic (US$)         0.70    0.72      -2.4%        0.92     -23.3%
EPS – Diluted (US$)       0.70    0.71      -1.5%        0.91     -23.0%
Weighted Avg. # of
Shares – Basic (000)   43,195  42,817       0.9%      42,985       0.5%
Weighted Avg. # of
Shares – Diluted (000) 43,465  43,502      -0.1%      43,433       0.1%
(1) EBITDAR (earnings before interest, taxes, depreciation,
amortization and rent) is presented as supplemental information 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.
However, EBITDAR should not be considered in isolation, as a substitute for
net income prepared in accordance with US GAAP or as a measure of a
company’s profitability. In addition, our calculations may not be
comparable to other similarly titled measures of other companies. A
reconciliation of EBITDAR to consolidated net income is attached to this
press release.

Full 2Q08 earnings release available for download at:
http://investor.shareholder.com/copa/results.cfm

2Q08 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST
Date:              August 14, 2008
Time:              11:30 a.m. EDT (10:30 a.m. Panama Time)
Conference Call:
Telephone Number:  877-681-3373  (U.S. Domestic Callers)
719-325-4908  (International Callers)
Webcast Link:      http://investor.shareholder.com/copa/events.cfm
About Copa Holdings

Copa Holdings, through its Copa Airlines and Aero Republica operating
subsidiaries, is a leading Latin American provider of international airline
passenger and cargo service. Copa Airlines currently offers approximately
136 daily scheduled flights to 41 destinations in 22 countries in North,
Central and South America and the Caribbean. In addition, Copa Airlines
provides passengers with access to flights to more than 120 other
international destinations through code share agreements with Continental
Airlines and other airlines. Aero Republica, the second-largest domestic
carrier in Colombia, provides service to 12 cities in Colombia as well as
international connectivity with Copa Airlines’ Hub of the Americas through
flights from Bogota, Bucaramanga, Cali, Cartagena and Medellin.

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