Copa Holdings (CPA) Q2 2024 earnings summary

Executive summary

• Achieved a 19.5% Q2 operating margin, the second-best Q2 in company history, with industry-leading financial and operational results.

• Net profit for Q2 was $120.3 million, or $2.88 per share, with operating profit at $159.5 million.

• Passenger traffic grew 10.6% year-over-year, with capacity up 9.7% and load factor rising 0.7 points to 86.8%.

• Expanded network to 85 destinations in 32 countries, adding Raleigh-Durham, Florianopolis, and Tulum.

• Recognized by Skytrax for the ninth consecutive year as the best airline in Central America and the Caribbean.

Financial highlights

• Total revenues rose 1.3% to $819.4 million compared to 2Q23, despite a 7.7% decrease in RASM due to lower passenger yields.

• Unit cost ex-fuel (CASM ex-fuel) was $0.056, down 5.8% year-over-year, mainly due to lower maintenance and sales/distribution costs.

• Passenger yield fell 8.7% to $0.121; unit revenues (RASM) dropped 7.7% to $0.11.

• Adjusted net debt to EBITDA ratio at 0.6x; total debt including leases was $1.8 billion.

• Cash, short, and long-term investments totaled over $1.2 billion, 35% of last 12 months' revenues.

Outlook and guidance

• Full-year 2024 capacity growth revised to ~9% (from ~10%) due to Venezuela flight suspension.

• Operating margin guidance reaffirmed at 21%-23%.

• Load factor expected at ~86.5%, unit revenues at $0.115, CASM ex-fuel at $0.059, and all-in fuel price at $2.70/gallon.

• Venezuela suspension impact and weaker regional currencies are included in guidance, with capacity redeployment expected by year-end.

• Third dividend payment of $1.61/share scheduled for September 13, 2024.