Copa Holdings(CPA) - 2025 Q1 - Quarterly Report

Copa Holdings First-Quarter 2025 Financial Results 1Q25 Key Highlights The company reported a $176.8 million net profit, strong operational performance, and maintained a robust financial position with $1.3 billion in cash | Metric | 1Q25 Value | Change vs. 1Q24 | | :--- | :--- | :--- | | Net Profit | US$176.8 million | +US$0.7 million | | Earnings Per Share (EPS) | US$4.28 | +US$0.09 | | Operating Profit | US$213.8 million | -1.0% | | Operating Margin | 23.8% | -0.4 p.p. | | Capacity (ASMs) | Increased by 9.5% | - | | Revenue per ASM (RASM) | 11.5 cents | -8.1% | | Cost per ASM excl. Fuel (Ex-fuel CASM) | 5.8 cents | -4.3% | - The company ended the quarter with a strong liquidity position of approximately US$1.3 billion in cash and investments, representing 39% of the last twelve months' revenues[2] - The Board of Directors ratified a second dividend payment for the year of US$1.61 per share, payable on June 13, 2025[1] - The consolidated fleet comprised 112 aircraft at the end of the quarter, and the company increased its firm order book to 57 aircraft by exercising options for six additional Boeing 737 MAX-8s[2] Consolidated Operating and Financial Statistics The company increased capacity and traffic, but experienced declines in passenger yield and unit revenues despite lower fuel costs | Operating Metric | 1Q25 | 1Q24 | % Change | | :--- | :--- | :--- | :--- | | ASMs (millions) | 7,801 | 7,121 | 9.5% | | RPMs (millions) | 6,743 | 6,127 | 10.1% | | Load Factor | 86.4% | 86.0% | +0.4 p.p. | | Yield (US$ Cents) | 12.7 | 14.0 | (9.1)% | | RASM (US$ Cents) | 11.5 | 12.5 | (8.1)% | | CASM (US$ Cents) | 8.8 | 9.5 | (7.7)% | | CASM Excl. Fuel (US$ Cents) | 5.8 | 6.1 | (4.3)% | | Avg. Price Per Fuel Gallon (US$) | 2.54 | 2.90 | (12.4)% | Management's Comments on 1Q25 Results Management attributed the strong 23.8% operating margin to a resilient business model focused on low costs and operational excellence - The company achieved a strong 23.8% operating margin, demonstrating the resilience of its business model in a lower passenger yield environment[4] - Passenger yields decreased by 9.1% compared to 1Q24, primarily due to increased industry capacity and unfavorable currency fluctuations[7] - Operating expenses increased by only 1.2% despite a 9.5% capacity growth, thanks to lower fuel prices and reduced sales costs[8] - The company's strategy is built on its Hub of the Americas® in Panama, low unit costs, leading on-time performance, and a strong balance sheet[12] Outlook for 2025 2025 Full-Year Guidance The company raised its full-year 2025 operating margin guidance to 21-23%, driven by lower expected fuel costs | Financial Outlook | 2025 Guidance | 2024 Actual | | :--- | :--- | :--- | | Capacity – YOY ASM growth | 7-8% | 8.6% | | Operating Margin | 21-23% | 21.9% | - The 2025 outlook is based on the following assumptions: load factor of ~86.5%, unit revenues (RASM) of ~11.2 cents, unit costs excluding fuel (Ex-Fuel CASM) of ~5.8 cents, and an all-in fuel price of $2.40 per gallon[14] Detailed Consolidated First-Quarter Results Operating Revenue Breakdown Total operating revenue grew slightly to $899.2 million, with flat passenger revenue offset by strong growth in cargo and other revenue | Revenue Component | 1Q25 (US$ millions) | Change vs. 1Q24 | | :--- | :--- | :--- | | Passenger Revenue | 859.0 | +0.0% | | Cargo and Mail Revenue | 25.7 | +17.3% | | Other Operating Revenue | 14.5 | +12.7% | | Total Operating Revenue | 899.2 | +0.6% | Operating Expenses Breakdown Consolidated operating expenses rose 1.2% to $685.4 million, with lower fuel costs offsetting a significant increase in maintenance expenses - Fuel costs decreased 5.4% to $232.2 million, driven by a 12.4% lower effective fuel price[19] - Sales and distribution costs fell 9.4% to $50.3 million, attributed to higher penetration of direct sales and lower-cost NDC travel agency channels[21] - Maintenance, materials, and repairs expense increased by 53.9% to $39.4 million, largely due to adjustments on return condition provisions for purchased leased aircraft[22] - Passenger servicing costs decreased 15.7% to $25.0 million, mainly because 1Q24 included one-time expenses related to the MAX-9 fleet grounding[20] Non-operating Income (Expense) The company recorded a net non-operating expense of $7.1 million, primarily from finance costs partially offset by finance income | Non-operating Item | 1Q25 (US$ millions) | | :--- | :--- | | Finance cost | (23.2) | | Finance income | 15.8 | | Gain (loss) on foreign currency fluctuations | 1.4 | | Net change in fair value of derivatives | (2.4) | | Other non-operating income (expense) | 1.4 | | Total Non-Operating Expense | (7.1) | Financial Statements Consolidated Statement of Profit or Loss (Income Statement) The company reported a net profit of $176.8 million on revenues of $899.2 million for Q1 2025, a slight increase from the prior year | (In US$ thousands) | 1Q25 | 1Q24 | % Change | | :--- | :--- | :--- | :--- | | Total Operating Revenue | 899,181 | 893,467 | 0.6% | | Total Operating Expense | 685,360 | 677,482 | 1.2% | | Operating Profit | 213,822 | 215,985 | (1.0)% | | Profit before taxes | 206,744 | 206,858 | (0.1)% | | Net Profit | 176,766 | 176,066 | 0.4% | Consolidated Statement of Financial Position (Balance Sheet) Total assets remained stable at $5.75 billion, while total equity increased to $2.48 billion as of March 31, 2025 | (In US$ thousands) | March 2025 | December 2024 | | :--- | :--- | :--- | | Total Assets | 5,747,808 | 5,742,289 | | Total Current Assets | 1,321,625 | 1,576,879 | | Property and equipment, net | 3,564,026 | 3,458,261 | | Total Liabilities | 3,266,426 | 3,369,544 | | Total Current Liabilities | 1,341,097 | 1,427,895 | | Loans and borrowings (long-term) | 1,390,774 | 1,415,953 | | Total Equity | 2,481,382 | 2,372,745 | Consolidated Statement of Cash Flows The company generated $205.5 million in operating cash flow, but a net decrease in cash resulted from investing and financing activities | For the three months ended March 31, 2025 (In US$ thousands) | Amount | | :--- | :--- | | Cash flow from operating activities | 205,477 | | Cash flow (used in) investing activities | (518,052) | | Cash flow (used in) financing activities | (135,918) | | Net decrease in cash and cash equivalents | (448,493) | | Cash and cash equivalents at March 31 | 164,820 | | Total cash, cash equivalents and investments at March 31 | 1,342,166 | Non-IFRS Financial Measure Reconciliation Reconciliation of CASM Excluding Fuel This section reconciles the non-IFRS measure CASM Excl. Fuel (5.8 cents) to the reported IFRS CASM (8.8 cents) for Q1 2025 | (in US$ Cents) | 1Q25 | 1Q24 | | :--- | :--- | :--- | | Operating Costs per ASM as Reported (CASM) | 8.8 | 9.5 | | Less: Aircraft Fuel Cost per ASM | 3.0 | 3.4 | | Operating Costs per ASM excluding fuel (CASM Excl. Fuel) | 5.8 | 6.1 |