Copa Holdings, S.A. (NYSE: CPA) today announced its financial results for the third quarter of 2023, in which achieved a net profit of $187.4 million, or $4.72 per share. This figure includes special items such as a net gain related to the settlement of the company’s convertible notes and an unrealized mark-to-market gain on financial investments. Without these items, the adjusted net profit would be $174.4 million, or $4.39 per share.
The company also saw an increase in its operating profit, which rose to $205.0 million with an operating margin of 23.6%. This represents an improvement over the $143.7 million operating profit and 17.8% margin reported in the third quarter of 2022.
In terms of operational metrics, passenger traffic, measured in revenue passenger miles (RPMs), grew by 13.3% year-over-year, and capacity, measured in available seat miles (ASMs), increased by 12.1%. The load factor, which measures how full flights are, rose slightly to 87.8%.
Revenue-wise, Copa Holdings experienced a 7.2% increase, reaching $867.7 million. However, this growth was accompanied by a 5.0% decrease in yields, leading to a decrease in revenue per available seat mile (RASM) by 4.3% compared to the third quarter of 2022.
The airline reported a decrease in operating cost per available seat mile (CASM) by 11.2%, attributed mainly to a 21.3% reduction in jet fuel prices and lower sales and distribution costs. Excluding fuel, the CASM decreased by 2.1%.
Copa Holdings concluded the third quarter with approximately $1.2 billion in cash, short-term, and long-term investments. Additionally, the company completed the redemption of its 4.50% Convertible Senior Notes due 2025, resulting in a net settlement of $350.0 million in cash and the issuance of approximately 3.7 million shares.
The company’s total debt, including lease liabilities, stood at $1.7 billion at the end of the quarter. The Adjusted Net Debt to EBITDA ratio was 0.4 times. During the quarter, Copa Holdings expanded its fleet with two Boeing 737 MAX 9 aircraft, bringing its total fleet to 103 aircraft: 67 Boeing 737-800, 26 737 MAX 9, 9 737-700 and one 737-800 freighter.
In November Copa Holdings has taken delivery of two more Boeing 737 MAX 9 aircraft and expects one additional aircraft by the end of 2023. The company also recently began service to Barquisimeto, Venezuela. Additionally, following the completion of a Share Repurchase Program, a new $200 million program was approved by the board. Moreover, a dividend payment of $0.82 per share is scheduled for December 15, 2023.
