Half-year Results

Avation PLC (LSE: AVAP), the commercial passenger aircraft leasing company, announces unaudited results for the six months ended 31 December 2024.

Financial Highlights

• Revenue and other income increased to US$55.4 million (2023: US$46.3 million) displaying continued business momentum;
• EBITDA increased to US$55.6 million (2023: US$38.3 million) demonstrating enhanced cash generation;
• Operating profit US$18.8 million (2023: US$17.5 million);
• Total cash increased to US$125.6 million (30 June 2024: US$117.9 million);
• Net indebtedness reduced by US$45.2 million to US$606.3 million (30 June 2024: US$651.5 million), representing 56.1% of total assets (30 June 2024: 57.0%);
• Ratio of net debt to EBITDA improved significantly to 5.7x (30 June 2024: 7.3x); and
• Net asset value per share increased 3.2% to £2.94 (30 June 2024 restated: £2.85).

Operational Highlights

• Avation's fleet was 100% utilised throughout the period, showing strong airline demand and effective asset management;
• Two ATR 72-600 aircraft were sold pursuant to the exercise of purchase options held by the lessee;
• The Company sold a new ATR 72-600 aircraft on delivery from the manufacturer in November 2024 realising a profit of US$1.7 million and US$5.0 million net cash proceeds;
• In January 2025 an early lease termination option for the Company's Boeing 777-300ER aircraft expired, providing certainty for an additional four years lease revenue for the aircraft; and
• The Company has signed an agreement to purchase an Airbus A320 aircraft which is on lease to Etihad Airlines. The addition of Etihad to Avation's lessee portfolio improves customer diversification and the Company's overall credit risk profile.

Outlook

According to IATA, in 2024 international passenger traffic reached new highs, growing 13.6% year-on-year. Passenger load factors increased in all regions reflecting strong demand for air travel. The strength of the overall air travel market is supportive for commercial aircraft leasing.

Avation's fleet is currently 100% utilised and is set to grow through the recently agreed acquisition of an Airbus A320 aircraft on lease to Etihad Airlines. We expect to close this aircraft acquisition in March 2025 and the addition of Etihad to our roster of customer airlines provides meaningful improvements to both revenue diversification and the overall credit risk profile of our fleet.

We will also take delivery of a new ATR 72-600 in Q2 2025 from our orderbook. This aircraft has been pre-sold to an airline in the Caribbean in a transaction expected to generate a profit and release net cash proceeds of around US$4.9 million.

Further fleet growth is expected in Q4 2025 with the scheduled deliveries of two additional ATR 72-600 aircraft from our orderbook. The first delivery, scheduled for October 2025, has been placed on long-term lease with a Japanese airline and the second aircraft is expected to be placed for long-term lease with an airline in South Korea. Both airlines are new customers for Avation, further improving revenue diversification.

The Company has also just announced the agreement of an US$85 million portfolio financing facility with a major international aviation finance bank. This sophisticated loan facility is expected to provide a significant improvement in Avation's cash flows and other benefits including the ability to pool certain maintenance reserve liabilities, releasing surplus cash for use in the business. The expected cashflow benefit is around US$ 400,000 per month.

Having observed the significant profit volatility created by the option pricing model used to value aircraft purchase rights, Avation intends to seek a financial partner to invest in a joint venture for the purchase rights with the desired outcome of funding future conversions to firm orders and reducing volatility in Avation's reported profits.

The Company's future strategy will focus on leasing modern, low CO2 emissions, fuel-efficient aircraft, reducing revenue concentrations and generating further improvements in the overall credit quality of the Company's portfolio. Avation's ATR orderbook and purchase rights provide a valuable growth opportunity and the Company will also look to the secondary markets to add additional narrow-body aircraft opportunistically.

The Company continues to focus on optimising its capital structure and is pleased to have reduced leverage significantly from the peak seen during and immediately after the COVID pandemic. Reduced levels of leverage have created a platform which allows the Company to consider further growth opportunities and for re-financing the Company's unsecured bonds which are due to mature in October 2026.

Executive Chairman, Jeff Chatfield, said:

"During the six months ending 31 December 2024 Avation generated improvements in revenue, EBITDA and operating profit, sold an aircraft at a profit, added to liquidity and continued to reduce leverage. These are pleasing results and show that the Company has fully overcome the challenges created by the impact of the COVID pandemic on our business. We may now look forward with confidence to the future having established a strong platform for a return to fleet growth.

We are particularly pleased with our agreement to purchase an Airbus A320 aircraft on lease to Etihad Airlines, a world-class operator that enhances our customer base and credit quality. We were also pleased to see the expiry of an early lease termination option for our Boeing 777-300ER widebody aircraft last month. This is a welcome development which increases our future contracted revenue significantly and provides certainty for our most valuable aircraft asset.

We note that long OEM order backlogs, supply chain issues and delays to new aircraft deliveries have created an environment where airlines are keen to extend existing aircraft leases, and aircraft coming off-lease are in demand. We have an ATR 72-600 lease expiring next month and we expect to complete the transition of this aircraft to a new lessee quickly. Our next lease expiries are for three ATR 72-600 aircraft in early 2026. Our marketing team are seeing high levels of interest in the market for these aircraft and we are confident that we will be able to re-lease them at healthy lease rates.

Avation has continued to de-lever its balance sheet, reducing debt by US$36.7 million during the six-month period and achieving a reduction to 56.1% in the ratio of net debt to total assets as at 31 December 2024. Strong cash generation, improved earnings visibility, cost control and reduced leverage have created a stable platform for the Company to grow. We are also seeing opportunities for refinancing transactions on attractive terms, which the Company intends to take advantage of. The recently announced US$85 million loan facility is a good example and we are confident of concluding further refinancing transactions including for the Company's unsecured bonds which mature in October 2026.

Reflecting the Company's growth ambitions and market position, the Board is considering an application to transfer from the Transition Category to the Equity Shares (Commercial Companies) ("ESCC") category of the Official List and Main Market of the London Stock Exchange. While still at an early stage, this move would further enhance Avation's visibility and access to capital markets. The Board will make appropriate further announcements in due course."

Financial Summary

• EBITDA is a non-GAAP financial measure used as an indicator of a company's ability to incur and service debt. EBITDA has been calculated as the sum of profit before tax, finance expenses, depreciation and impairment and unrealised losses on aircraft purchase rights and deposits paid for aircraft. EBITDA presented herein may not be comparable to similarly titled measures presented by other companies.
• Cash and bank balances as at 31 December 2024 comprise cash and cash equivalents of US$32.2 million (30 June 2024: US$23.6 million), restricted cash balances of US$54.2 million (30 June 2024: US$94.4 million) and investment in fixed term deposits US$39.3 million (30 June 2024: US$ nil).
• Based on GBP:USD exchange rate as at 31 December 2024 of 1.25 (30 June 2024:1.27).

Aircraft Fleet

At 31 December 2024, Avation's fleet comprised 32 aircraft, including three aircraft on finance lease. Avation currently serves 15 customers in 13 countries. The weighted average age of the fleet is 7.9 years (30 June 2024: 7.3 years) and the weighted average remaining lease term is 4.2 years (30 June 2024: 4.1 years).

Two ATR 72-600 aircraft were sold during the period pursuant to the exercise of purchase options held by the lessee. Avation's fleet comprises 55% narrowbody, 27% turboprop and 18% widebody aircraft by book value as at 31 December 2024. Fleet assets have decreased 5.5% to US$787.2 million (30 June 2024: US$832.8 million). As at the date of this report all aircraft are on-lease.

The company took delivery of an ATR 72-600 aircraft in November 2024. The aircraft was sold on delivery realising a profit of US$1.7 million.

Avation has eleven new ATR 72-600 aircraft on order for delivery between Q2 2025 and Q2 2028 and purchase rights for a further 24 aircraft as at 31 December 2024.

Debt summary

• Net indebtedness is defined as loans and borrowings less unrestricted cash and bank balances.

Net indebtedness was reduced by 6.9% to US$606.3 million (30 June 2024: US$651.5 million).

The weighted average cost of total debt has increased to 6.6% at 31 December 2024 (30 June 2024: 6.4%) due to repayments of lower cost secured loans in the period. The weighted average cost of secured debt also increased to 4.9% at 31 December 2024 (30 June 2024: 4.8%).

At the end of the period, Avation's net debt to total assets ratio improved to 56.1% (30 June 2024: 57.0%). At 31 December 2024, 96.5% of total debt was at fixed or hedged interest rates (30 June 2024: 96.4%). The ratio of unsecured debt to total debt was 48.5% (30 June 2024: 44.8%).

Financial Analysis

Revenue

Lease rental revenue increased by 1.5% from US$43.9 million in the six months ended 31 December 2023 to US$44.6 million in the six months ended 31 December 2024. The increase was principally due to improved fleet utilisation. All of Avation's aircraft were on-lease throughout the period.

Interest income from finance leases decreased by 24.7% from US$1.0 million in the six months ended 31 December 2023 to US$0.8 million in the six months ended 31 December 2024. There were three aircraft leased on finance leases at 31 December 2024.

Other income

Claim recoveries recognised in other income in the six months ended 31 December 2024 and 31 December 2023 are distributions paid to creditors of Virgin Australia in excess of amounts allocated to trade receivables.

Foreign currency exchange gains in the six months ended 31 December 2024 arose principally from the revaluation of Euro denominated loans during the period.

Administrative expenses

Staff costs increased by 3.0% from US$2.8 million in the six months ended 31 December 2023 to US$2.9 million in the six months ended 31 December 2024 as a result of inflationary pressures.

Other administrative expenses were unchanged at US$1.7 million in both the six months ended 31 December 2023 and 31 December 2024.

Finance income

Interest income was US$2.8 million in the six months ended 31 December 2024. The group deploys surplus cash balances into fixed term deposits while maintaining sufficient liquidity to meet near-term payment obligations.

Avation generated a gain of US$0.3 million on the repurchase of US$8.0 million of Avation Capital S.A. 8.25%/9.0% unsecured notes at a discount in December 2023.

A gain of US$1.1 million on early full repayment of borrowings arose when in-the-money interest rate swaps were terminated concurrently with repayment of two loans on the sales of aircraft in August 2024.

Finance expenses

Amortisation of IFRS 9 gain on debt modification of US$7.4 million represents the non-cash accretion in the book value of Avation Capital S.A. 8.25%/9.0% unsecured notes resulting from the accounting treatment of the extension and changes to the terms of the notes agreed with noteholders in March 2021. The extension was accounted for as a substantial modification of a debt instrument in accordance with IFRS 9. The face value of Avation Capital S.A. 8.25%/9.0% unsecured notes outstanding as of 31 December 2024 is US$331.6 million.

Interest expense on secured borrowings reduced by 16.6% to US$8.4 million in the six months ended 31 December 2024 from US$10.1 million in the six months ended 31 December 2023 as a result of repayments of secured loans. Secured loans have been paid down by US$108.8 million from US$437.5 million at 31 December 2023 to US$328.7 million at 31 December 2024.

Interest expense on unsecured notes reduced by 12.1% from US$15.6 million in the six months ended 31 December 2023 to $13.7 million in the six months ended 31 December 2024. The reduction results from repurchases of notes which have reduced the outstanding principal amount by US$18.0 million since December 2023 and the company's choice to pay the November 2024 coupon payment using the 8.25% all cash option instead of the 9.0% part cash part payment-in-kind option.

A mark to market loss of US$2.0 million arose on the revaluation of interest rate swap agreements as a result of changes in floating interest rates in the six months ended 31 December 2024.

Results Conference Call

Avation's senior management team will host an investor update call on 25 February 2025, at 12:00 PM GMT (UK) / 7:00 AM EST (US) / 8:00 PM SGT (Singapore), to discuss the Company's financial results.

A replay of the investor update call will be made available on the Investor Relations page of the Avation PLC website.

Basis of presentation

This announcement covers the unaudited results of Avation PLC for the six months ended 31 December 2024.

Financial information presented in this announcement is being published for the purposes of providing preliminary Group financial results for the six months ended 31 December 2024. The financial information in this preliminary announcement is not audited and does not constitute statutory financial statements of Avation PLC within the meaning of section 434 of the Companies Act 2006. The Board of Directors approved this financial information on 29 February 2024. Avation PLC's most recent statutory financial statements for the purposes of Chapter 7 of Part 15 of the Companies Act 2006 for the year ended 30 June 2024, upon which the auditors have given an unqualified audit, were published on 25 October 2024 and have been annexed to the annual return and delivered to the Registrar of Companies.

Earnings per share for profit/(loss) attributable to shareholders of Avation PLC

AVATION PLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 31 DECEMBER 2024

This interim condensed consolidated financial statements for Avation PLC for the six months ended 31 December 2024 were authorised for issue in accordance with a resolution of the Directors on 24 February 2025.

1 CORPORATE INFORMATION

Avation PLC is a public limited company incorporated in England and Wales under the Companies Act 2006 (Registration Number 05872328) and its shares are traded on the Standard Segment of the Main Market of the London Stock Exchange.

The Group's principal activity is aircraft leasing.

2 BASIS OF PREPARATION AND ACCOUNTING POLICIES

These interim condensed consolidated financial statements have been prepared in accordance with the Disclosure and Transparency Rules (DTR) of the Financial Conduct Authority and in accordance with UK-adopted International Accounting Standard (IAS) 34 'Interim Financial Reporting'.

The interim condensed consolidated financial statements do not include all the notes of the type normally included within the annual report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financial and investing activities of the consolidated entity as the annual report.

It is recommended that the interim condensed consolidated financial statements be read in conjunction with the annual report for the year ended 30 June 2024 and considered together with any public announcements made by Avation PLC during the six months ended 31 December 2024.

The accounting policies and methods of computation are the same as those adopted in the annual report for the year ended 30 June 2024.

The preparation of the interim condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported income and expenses, assets and liabilities and disclosure of contingencies at the date of the Interim Report, actual results may differ from these estimates.

The statutory financial statements of Avation PLC for the year ended 30 June 2024, which carried an unqualified audit report, have been delivered to the Registrar of Companies and did not contain any statements under section 498 of the Companies Act 2006.

The interim condensed consolidated financial statements are unaudited.

The interim condensed consolidated financial statements do not constitute statutory financial statements within the meaning of section 434 of the Companies Act 2006.

AVATION PLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 31 DECEMBER 2024

3 NEW STANDARDS AND INTERPRETATIONS NOT APPLIED AND STANDARDS IN EFFECT IN 2025

New standards and interpretations not applied

The Group has not adopted the following new or amended standards and interpretations which are relevant to the Group that have been issued but are not yet effective:

(b)

Based on a preliminary assessment using currently available information, the Group does not expect the adoption of the above standards to have a material impact on the financial statements in the period of initial application. These preliminary assessments may be subject to changes arising from ongoing analyses when the Group adopts the standards. The Group plans to adopt the above standards on the effective date.

Standards in effect in 2025

The Group has adopted all new standards that have come into effect during the six months ended 31 December 2024. The adoptions do not have a material impact on the Group's interim condensed consolidated financial statements.

AVATION PLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 31 DECEMBER 2024

4 FAIR VALUE MEASUREMENT

The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The carrying amounts of cash and bank balances, trade and other receivables, finance lease receivables - current, trade and other payables - current, loans and borrowings - current and maintenance reserves are a reasonable approximation of fair value either due to their short-term nature or because the interest rate charged closely approximates market interest rates or that the financial instruments have been discounted to their fair value at a current pre-tax interest rate.

The fair values (other than for unsecured notes, investment in debt instrument, fair value through profit or loss) above are estimated by discounting expected future cash flows at market incremental lending rate for similar types of lending, borrowing or leasing arrangements at the end of the reporting period, which is classified under level 2 of the fair value hierarchy.

The fair value of the unsecured notes and share warrants are based on level 1 quoted prices (unadjusted) in an active market that the Group can access at measurement date.

The fair value of pre-delivery aircraft deposits paid are classified under level 2 of the fair value hierarchy for which the inputs are observable for the determination of fair value using the discounted cashflow model.

The fair value of the derivative financial instruments is determined by reference to marked-to-market values provided by counterparties. The fair value measurement of all derivative financial instruments is classified under level 2 of the fair value hierarchy, for which inputs other than quoted prices that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) are included as inputs for the determination of fair value.

AVATION PLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 31 DECEMBER 2024

4 FAIR VALUE MEASUREMENT (continued)

Assets measured at fair value classified under level 3:

AVATION PLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 31 DECEMBER 2024

5 REVENUE (continued)

Operating lease commitments

The Group leases out aircraft under operating leases. The maturity analysis of the undiscounted lease payments to be received under operating leases are as follows:

Assets pledged as security

The Group's aircraft and aircraft held under asset for sale with carrying values of US$625 million (30 June 2024: US$638.0 million) are mortgaged to secure the Group's borrowings (Note 20).

Additions and Disposals

During the period, the Group purchased and sold 1 turboprop aircraft and recognised a gain on disposal of US$1.7 million.

AVATION PLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 31 DECEMBER 2024

11 PROPERTY, PLANT AND EQUIPMENT (continued)

Geographical analysis

AVATION PLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 31 DECEMBER 2024

13 FINANCE LEASE RECEIVABLES

Future minimum lease payments receivable under finance leases are as follows:

14 GOODWILL

The Group performs its annual impairment test in June and when circumstances indicate the carrying value may be impaired. For the purpose of these financial statements there was no indication of impairment. The key assumptions used to determine the recoverable amount for the different cash generating units were disclosed in the annual consolidated financial statements for the year ended 30 June 2024.

15 DERIVATIVE FINANCIAL ASSETS/LIABILITIES

AVATION PLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 31 DECEMBER 2024

15 DERIVATIVE FINANCIAL ASSETS/LIABILITIES (continued)

Hedge accounting has been applied for interest rate swap contracts and cross-currency interest rate swap contracts which have been designated as cash flow hedges.

The Group pays fixed rates of interest of 2.3% to 2.6% per annum and receives floating rate interest equal to 1-month to 3-month SOFR under the interest rate swap contracts.

The swap contracts mature between 15 February 2026 and 24 May 2029.

Changes in the fair value of these interest rate swap and cross-currency interest rate swap contracts are recognised in the fair value reserve. The net fair value loss net of tax of US$3.2 million (31 December 2023: loss of US$4.2 million) on these derivative financial instruments was recognised in the fair value reserve for the period.

The Group entered into Euro denominated lease agreements which create exposure to variability in cash flows due movements in the EUR:USD exchange rate. To hedge its exposure to variable cash flows resulting from changes in EUR:USD spot rates, the Group has arranged Euro denominated financing which reduces overall exposure to variable cash flows to the extent that lease receipts and debt service cashflows are matched. The Group is making use of a non-derivative hedging instrument and has designated the cash flows with respect to the loan interest and principal repayment (hedging instrument) against a specific portion of the lease receivable (hedged item).

Unrealised foreign exchange gains and losses arising on Euro denominated loans designated as cash flow hedges are recognised in the foreign currency hedge reserve. Unrealised foreign exchange gains and losses recorded in the foreign currency hedging reserve are systematically re-cycled through profit or loss over the remaining term of the related loan on a straight-line basis.

The share warrants consist of 5,755,908 (30 June 2024: 5,857,408) share warrants granted to the holder of the unsecured notes to subscribe for the ordinary shares of the Company exercisable to 31 October 2026 at a price of 114.5 pence per share (including cashless exercise option).

AVATION PLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 31 DECEMBER 2024

16 PRE-DELIVERY AIRCRAFT DEPOSITS PAID

The Group has determined that it would seek to dispose of excess aircraft purchase rights over and above its requirement to acquire additional aircraft for its fleet. The Group accounts for aircraft purchase rights at fair value through profit or loss.

AVATION PLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 31 DECEMBER 2024

18 INVESTMENT IN EQUITY, FAIR VALUE THROUGH PROFIT OR LOSS

The Group received 8,014,602 ordinary shares from an airline customer as part of the airline's restructuring plan during the year ended 30 June 2022. The Group entered into an agreement to exchange 8,014,602 ordinary shares in Philippine Airlines, Inc. with 124,787,353 ordinary shares in PAL Holdings, Inc. during the previous year. The exchange of shares has been completed on January 2025.

19 SHARE CAPITAL AND TREASURY SHARES

Share capital

Allotted, called up and fully paid Ordinary shares of 1 penny each:

During the period, the Company issued 3,793,762 ordinary shares of 1 penny each at exercise prices ranging from 102 pence to 130 pence following the exercise of warrants by warrant holders raising total gross proceeds of US$6.1 million.

The holders of ordinary shares (except for treasury shares) are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restrictions.

AVATION PLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 31 DECEMBER 2024

19 SHARE CAPITAL AND TREASURY SHARES (continued)

Treasury shares

During the six months ended 31 December 2024, the Company bought 7,800,000 treasury shares at a market price of 150 pence per share.

Net asset value per share

• Net asset value per share is total equity divided by the total number of shares issued and outstanding at period end.
• Based on GBP:US$ exchange rate as at 31 December 2024 of 1.25 (30 June 2024: 1.27).

AVATION PLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 31 DECEMBER 2024

20 LOANS AND BORROWINGS

Secured borrowings are secured by first ranking mortgages over the relevant aircraft, security assignments of the Group's rights under leases and other contractual agreements relating to the aircraft, charges over bank accounts in which lease payments relating to the aircraft are received and charges over the issued share capital of certain subsidiaries.

AVATION PLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 31 DECEMBER 2024

21 MAINTENANCE RESERVES

During the six months ended 31 December 2024, maintenance reserves of US$9.3 million were released to profit or loss as income.

22 CAPITAL COMMITMENTS

Capital expenditure contracted for at the reporting date but not recognised in the financial statements is as follows:

Capital commitments represent amounts due under contracts entered into by the Group to purchase aircraft. The company has paid deposits towards the cost of these aircraft which are included in pre-delivery aircraft deposits paid.

As at 31 December 2024, the Group has commitments to purchase eleven ATR 72-600 aircraft from the manufacturer with expected delivery dates ranging from 2025 to 2028.

AVATION PLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 31 DECEMBER 2024

23 CONTINGENT LIABILITIES

There were no material changes in contingent liabilities since 30 June 2024.

24 DIVIDENDS

Dividends are recognised as liabilities when they are approved for payment.

25 SUBSEQUENT EVENTS

Subsequent to the period end, the Group has signed a Term Loan A-style US$85 million expandable portfolio financing facility (the "Facility") in collaboration with a major international bank. This strategic Facility will initially support the refinancing of select aircraft in Avation's fleet, with the flexibility to finance additional aircraft, subject to lender approval.

AVATION PLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 31 DECEMBER 2024

PRINCIPAL RISKS

The Group's risk management processes bring greater judgement to decision making as they allow management to make better, more informed and more consistent decisions based on a clear understanding of risk involved. We regularly review the risk assessment and monitoring process as part of our commitment to continually improve the quality of decision-making across the Group.

The principal risks and uncertainties which may affect the Group in the second half of the financial year will include the typical risks associated with the aviation business, including but not limited to any downturn in the global aviation industry, fuel costs, finance costs, war and extremism and the like which may affect our airline customers' ability to fulfil their lease obligations.

The business also relies on its ability to source finance on favourable terms. Should this supply of finance contract, it would limit our fleet expansion and therefore growth.

GOING CONCERN

After making enquiries, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the financial statements. The financial risk management objectives and policies of the Group and the exposure of the Group to credit risk and liquidity risk are discussed in the annual report for the Group for the year ended 30 June 2024.

DIRECTORS

The directors of Avation PLC are listed in its Annual Report for the year ended 30 June 2024. A list of the current directors is maintained on the Avation PLC website: www.avation.net

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors confirm that, to the best of their knowledge, this condensed consolidated interim financial information have been prepared in accordance with UK-adopted IAS 34 and that the interim management report herein includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8 namely

• an indication of important events that have occurred during the first six months and their impact on the Interim Report, and a description required by the principal risks and uncertainties for the remaining six months of the financial year; and

By order of the Board

Jeff Chatfield

Executive Chairman

Singapore, 24 February 2025