Fly Play hf.

Quarterly Report • Oct 24, 2024

Fly PLAY hf.

CONDENSED CONSOL IDATED INTERIM FINANCIAL STATEMENTS

1 January - 30 September 2024

Fly PLAY hf. | Suðurlandsbraut 14 | 108 Reykjavík Iceland | Reg. no. 660319-0180

Condensed Consolidated Interim Financial Statements of Fly Play hf. 30 September 2024

Contents

Page

Endorsement and Statement by the Board of Directors and the CEO
Consolidated Interim Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Condensed Consolidated Interim Financial Statements

Endorsement and Statement by the Board of Directors and the CEO

Fly Play hf. (the "Company" or "PLAY") is an Icelandic low-cost airline that operates a hub-and-spoke model between Iceland, Europe, and North America. The Company launched its services in June 2021 and was listed on the Nasdaq First North Iceland in July 2021. PLAY's primary goal is to make flying affordable for everyone. PLAY offers a safe and pleasant journey in new and comfortable Airbus aircraft to 32 destinations during Q3 2024.

The Condensed Consolidated Interim Financial Statements for the period from January 1 to September 30 2024 have been prepared in accordance with International Financial Reporting Standards (IFRS) for Interim Financial Statements (IAS 34). The Financial Statements are presented in thousands of US dollars, the Group's functional currency.

Operations in the nine-month period ended 30 September 2024

According to the Condensed Consolidated Interim Financial Statement loss for the period was USD 26.2 million. However, in quarter three (Q3) made a profit of USD 3.5 million. On September 30, 2024, equity amounted to USD 6.6 million, including share capital in the amount of USD 14 million and a share premium of USD 125.9 million. Reference is made to the Statement of Changes in Equity regarding the information on changes in equity. The average number of full-time employees was 547 in the period thereof 250 men and 297 women, and salaries and related expenses amounted to USD 38.9 million.

PLAY's cash position including restricted cash amounted to USD 39.8 million as at 30 September 2024. This is an increase in cash position compared to end of last year. On 24 April the Company completed an increase of share capital of USD 32 million.

During Q3 2024, PLAY operated its 10 flights to 32 destinations in Europe and North America. This included four new destinations which are Faro, Pula, Aalborg and Valencia. Load factor increased from 88% in Q3 2023 to 89% in Q3 2024.

Total revenue for Q3 was USD 100.5 million compared to USD 110.2 million last year. Therefore, total revenue per available seat kilometer (TRASK) was 5.8 US cent, compared to 6.1 US cents in 2023. This is mainly due to PLAY's airfare revenue is down by 11% year-on-year reflecting increased competition in the Transatlantic market. TRASK is down by 5% year-on-year due to overcapacity in the Transatlantic markets with pressure on yields.

PLAY's total assets amounted to 459 million USD as at 30 September 2024.

Outlook going forward

PLAY believes that flexibility in scaling production to demand has been and remains crucial for PLAY. We will continue to focus on flexibility, demand-driven growth, and attractive value offering to the market. PLAY is well prepared to weather the uncertainty ahead with its healthy financial position.

Endorsement and Statement by the Board of Directors and the CEO, contd.:

Statement by the Board of Directors and the CEO

According to the Board of Directors' and CEO's best knowledge, the Condensed Consolidated Interim Financial Statements give a true and fair view of the financial performance of the Group for the nine-month period ended 30 September 2024, its assets, liabilities and financial position as at 30 September 2024 and its cash flows for the nine-month period ended 30 September 2024.

Further, in our opinion, the Financial Statements and the Endorsement of the Board of Directors and the CEO give a fair view of the development and performance of PLAY's operations and its position and describes the principal risks and uncertainties faced by PLAY.

The Board of Directors and the CEO have today discussed Consolidated Interim Financial Statements of PLAY for the nine-month period ended 30 September 2024 and confirm them by means of their signatures.

Reykjavik October 24, 2024

Board of Directors:

CEO:

Consolidated Interim Statement of Profit or Loss and Other Comprehensive Income

Revenue	Notes	2024 Q3		2023 റ്റ്‌ദ		2024 1.1-30.9		2023 1.1-30.9
Transport revenue	ర్	100,458 100,458		110,199 110,199		233,231 233,231		216,083 216,083
Operating expenses
Aviation expenses	7	55,259		63,705		143,275		131,325
Salaries and other personnel expenses	8	13,750		12,083		38,995		31,733
Other operating expenses	9	6,320		6,152		19,812		17,013
		75,329		81,941		202,082		180,071
Operating profit before depreciation
and Amortization (EBITDA)		25,129		28,259		31,148		36,012
Depreciation and Amortization		15,504		14,892		46,441		39,023
Operating profit (loss) (EBIT)		9,625		13,367		15,293)	(	3,011)
Financial income and expenses
Financial income		649		575		1,507		1,419
Financial expenses		( 6,953)	(	8,518)	(	21,190)		20,270)
Foreign exchange		782		734		1,594		73)
	11	5,521)		7,211)		18,090)		18,924)
Profit / (loss) before tax (EBT)		4,104		6,156		33,383)		21,936)
Income tax		( 614)		1,487)		7,137		4,134
Profit / (loss) for the period		3,490		4,669		26,246)		17,802)
Other comprehensive (loss) income
Items that are or may be reclassified to the income statement on later date Net gain (loss) on fuel hedge, net of tax				5,262	(	958)		2,505
		1,299) ー ଚର)		0		111		0
Net gain (loss) on FX hedge, net of tax		( ( 1,365)		5,262		847)		2,505
Total comprehensive profit / (loss) for the period		2,125		9,932		27,092)	(	15,297)
Earnings per share
Basic and diluted earnings per share (US cent)	15	0.2		0.7		1.9)		2.6)

Consolidated Statement of Financial Position at 30 September 2024

			Audited
	Notes	30.9.2024	31.12.2023
Assets
Intangible assets		13,889	14,195
Right-of-use assets		305,960	338,450
Operating assets		16,143	11,855
Aircraft deposits & security instalments		12,072	13,209
Deferred tax assets		33,427	26,290
Non-current assets		381,491	403,998
Inventories		503	180
Trade and other receivables		34,443	32,992
Prepaid expenses		2,606	2,755
Cash and cash equivalents		39,849	21,606
Current assets		77,401	57,533
Total assets		458,892	461,531
Shareholders equity
Share capital		14,046	6,797
Share premium		125,897	101,490
Other components of equity		1,279	1,160
Accumulated loss		( 134,634)	107,542)
Total shareholder equity		6,588	1,905
Liabilities Provisions			75,965
Lease liabilities		62,778
Non-current liabilities		236,768 299,546	247,761 323,726
Provisions		20,778	20,399
Lease liabilities		27,197	25,300
Trade and other payables		50,471	43,731
Deferred income	18	54,312	46,471
Current liabilities		152,758	135,900
Total liabilities		452,304	459,626
Total shareholders equity and liabilities		458,892	461,531

Consolidated Statement of Changes in Equity for the nine months ended 30 September 2024

	Other
	Share capital	Share premium	components Accumulated of equity		loss	Total equity
2023
Balance at January 1	6,740	100.587	13,844		82,685 )	38.486
Share capital increase	57	401	O		0	458
R&D reserve transfers	0	O	925		925)	O
Stock options	O	O	137		O	137
Total comprehensive loss	O	O	O		15,297 )	15,297 )
Balance at September 30	6,797	100,988	14.906		98,907	23,784

2024

Balance at January 1	6.797	101.490	1.160	107.542 )	1.906
Share capital increase	7.249	24,406			31.655
Stock options		O	119		119
Total comprehensive loss		O		27.092 )	27,092 )
Balance at September 30	14.046	125,897	1.279	134,634 )	6.588

Consolidated Statement of Cash Flows for the nine months ended 30 September 2024

	Notes		2024		2023
Cash flows used in operating activities			1.1-30.9		1.1-30.9
Loss for the period		ﮯ	26,246)	(	17,802)
Adjustments for
Depreciation and amortization			46,441		40.014
Net finance expense			18,090		15,386
Stock options			119		ાં રા
Deferred income tax		(	7,137)		3,692)
			31,267		34,043
Changes in operating assets and liabilities Inventories, increase			323
Trade and other receivables, decrease (increase)				(	364
Trade and other payables, increase (decrease)			1,451		3,219)
Changes in operating assets and liabilities			6,740		24,488
			8,514		21,633
Cash from operations before int. and taxes			39,781		55,676
Financial income received			1,507		1,419
lnterest paid			17,821)		16,826)
Net cash from operating activities			23,467		40,269
Cash flows to investing activities Net movement of deposits Investment of operating assets Investment of intangible assets Net cash used in investing activities		( (	1,137 1,461) 2,324) 2,648)	( (	2,886) 6,168) 2,937) 11,991)
Cash flows from financing activities Repayment of lease liabilities				ー	27,956)
Proceeds from share issue			31,655		458
Net cash (to)/from financing activities		(	3,092)	(	27,498)
Increase in cash and cash equivalents			17,727		780
Effect of exchange rate fluctuations on cash held			516		488
Cash and cash equiv. at beginning of the period			21,606		29,644
Cash and cash equivalents at the end of the period			39,849		30,912
Investment and financing without cash flow effect
Acquisition of right-of-use assets
New leases			10,224		134,023
Capitalized maintenance obligation under lease			O	(	42,149)
New leases			O		42.149

1. Reporting entity

Fly Play hf. (the "Group" or "PLAY") is a private limited company and domiciled in Iceland. PLAY is a low-cost airline which operates flights between North America and Europe. The registered office of the company is at Suðurlandsbraut 14 in Reykjavík, loeland. The Company is listed on the Nasdaq First North Iceland effective from July 9, 2021.

The Condensed Consolidated Interim Financial Statements of the Company as at and for the period ended 30 September 2024 comprise the Company and its subsidiary (together referred to as "the Group" or "PLAY"). PLAY has one subsidiary which is PLAY Lithuania which is a private limited company and domiciled in Lithuania with its registered office at Lvivo g. 101, Vilnius. PLAY's ownership in PLAY Lithuania is 100%.

2. Basis of preparation

a. Statement of compliance

These Condensed Consolidated Interim Financial Statements of the nine-month period ended 30 September 2024 and have been prepared in accordance with IAS 34 as adopted by the European Union.

The Condensed Consolidated Interim Financial Statements should be read in conjunction with the Group's Annual Consolidated Financial Statements for the year ended 31 December 2023. The Financial Statements for the Group for the period ended 31 December 2023 are available upon request from the Group's registered office or at www.flyplay.com/financial-reports-and-presentations.

These Condensed Consolidated Interim Financial Statements do not include all of the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual financial statements.

The Condensed Consolidated Interim Financial Statements were approved by the Board of Ely Play hf. on 24 October, 2024.

b. Basis of measurement

The Consolidated Financial Statements are prepared on the historical cost basis except that derivative financial instruments are recognized at fair value. Further details of the Group's accounting policies are included the 2023 financial statements.

c. Going concern

These Condensed Consolidated Interim Financial Statements are prepared on a going concern basis.

3. Functional and presentation currency

These Condensed Consolidated Interim Financial Statements are presented in United States Dollars (USD), which is the Group's functional currency. All financial information presented in United States Dollars has been rounded to the nearest thousand unless otherwise stated.

4. Use of estimates and judgements

In preparing these Condensed Consolidated Interim Financial Statements, management has made judgements, estimates and assumptions that affect the application of the Group's accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected.

The significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the Consolidated Financial Statements as at and for the year ended 31 December 2023.

Determination of fair value is based on assumptions subject to management's assessment of the development of various factors in the future. The actual selling price of assets and settlement value of liabilities may differ from these estimates.

Measurement of fair values

A number of the Group's accounting policies and disclosures require the measurement of fair value, for both financial and non-financial assets and liabilities. Where applicable, further information about the assumptions made in determining the fair value of assets or liabilities are in the relevant assets and liabilities.

5. Accounting policies

Standards issued but not yet effective

The accounting policies adopted in the preparation of the Condensed Consolidated Interim Financial Statements are consistent with those followed in the preparation of the Group's annual Consolidated Financial Statements for the year ended 31 December 2023, except for the adoption of new standards effective as of 1 January 2024. The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.

Several amendments apply for the first time in 2024, but do not have an impact on the Condensed Consolidated Interim Financial Statements of the Group.

Operating segments

The Group operates as a single operating segment.

6.	Revenue	2024	2023
	Revenue is specified as follows:	1.1-30.9	1.1-30.9
	Airfare	155,236	151,435
	Ancillary	64,235	55,680
	On board sales	1,113	4,692
	Cargo revenue	3,482	2,685
	Other revenue	2,505	1,592
	Transport revenue total	233,231	216,083
	7. Aviation expenses
	Aviation expenses are as follows:
	Aircraft fuel and emissions	74,256	73,780
	Aircraft handling, landing and communication	52,482	43,233
	Maintenance of aircraft	11,847	9,841
	Catering	1,141	888
	Other aviation expenses	3,550	3,482
	Aviation expenses total	143,275	131,325
	8. Salaries and other personnel expenses
	Salaries and other personnel expenses are specified as follows:
	Salaries	32,060	26,237
	Accrued vacation	848	660
	Pension fund contributions	3,309	2,624
	Other salary related expenses	2,558	2,075
	Stock options	120	137
	Total salaries and other personnel expenses	38,995	31,733
	Employees at the end of the period	547	531
	9. Other operating expenses
	Other operating expenses are as follows:
	Housing and office expenses	727	182
	Marketing and sales expenses	1,255	6,056
	17 cost	4,226	3,216
	Travel and other employee expenses	6,389	6,620
	Audit, legal and other professional services	1,007	851
	Other operating expenses	208	88
	Other operating expenses total	19,812	17,013
	10. Depreciation and Amortization
	The depreciation and amortization are specified as follows:
	Amortization of intangible assets	1,098	851
	Depreciation of right-of-use assets	42,144	36,159
	Depreciation of operating assets	2,599	2,013
	Depreciation and amortization recognized in profit or loss and and and	46 441	30 073

11 Financial income and (expenses)

Financial income and (expenses) is specified as follows:

Financial income and (expenses) is specified as follows:	2024	2023
	1.1-30.9	1.1-30.9
Interest income on bank deposits	1.507)	1.419)
Interest expenses of lease liabilities	15,848	14.986
Other finance expenses and transaction fees	5,342	5,284
Net foreign currency exchange rate gain (loss)	1.594)	73
Net financial expenses	18.090	18.924

12. Right-of-use assets

Right-of-use assets and depreciation are specified as follows:

	Aircraft	Other	Total
Balance at January 1, 2023		1,445	298.040
Additions	90.323	O	90,323
Depreciation	49.577)	429)	50,006)
Indexed leases	0	94	04
Balance at December 31, 2023		1,110	338,450
Balance at January 1, 2024	337,340	1,110	338,450
Additions	(10,224)	0	(10.224)
Depreciation	42.064)	680)	42,744)
Indexed leases	0	30	30
Balance at September 30, 2024		460	285.512

13. Trade and other receivables

Trade and other receivables have increased bookings and are mostly due to claims on the companies aqcuirers.

14. Cash and cash equivalents

Restricted cash is held in bank accounts pledged against credit cards acquirers, tax authorities and airport operators. The largest amount (USD 6.4 million) is pledged against credit card claims. Other restricted cash amounts (USD 2.5 million) which are pledged against airport operators, handling agents and the tax authorities.

15. Earnings per share

The calculation of basic EPS has been based on the following net loss attributable to ordinary shareholders and weighted-average number of ordinary shares outstanding. The calculation of diluted earnings per share is the same as basic earnings per share as the effect of warrants would not dilute the earnings per share only decrease loss per share.

Basic earnings per share

	2024	2023
	1.1-30.9	1.1-30.9
Loss for the period attributable to equity holders of the Group	26,246)	17.802)
Weighted average number of shares for the period	14,046	6,747
Basic earnings per share in US cent per share	1.9)	2.6)
Diluted earnings per share in US cent per share	1.9)	2.6)

16. Provisions

Provisions for aircraft maintenance on leased aircraft are as follows:

	2024	2025
	1.1-30.9	1.1-30.9
Balance at the beginning of the period	96,364	89.281
Increases in provisions during the period	()	21.289
Utilization of provision during the period		14.206)
Balance at the end of the period	83.556	96.364
Current provisions		20.399)
Total non-current provisions	62,778	75.965

17. Lease liabilities

The Group has in total ten aircraft on lease which constitute a financial lease under IFRS 16. Lease liabilities are as follows:

		Year of
	Rate	maturitv		Aircraft	Total
Lease payments in USD	5.6%	8-12 years	263,187		263.187
Lease in ISK, indexed	4.3%	5 years		778	778
Total lease liabilities			263.187	778	263.965

	1.1-30.9
1.1-30.9 -
Balance at the beginning of the period 273.060	224.053
New leases 10,352	69,034
Indexed leases	16
Payment of lease liabilities
Currency translation	339
263,965 Balance at the end of the period	273,060
Current maturities
Total non-current lease liabilities 236,768	247,761

17. Lease liabilities cont.

Repayments of lease liabilities are distributed over the next years as follows:

Repayments 2024-2025	27.197
Repayments 2025-2026	28,616
Repayments 2026-2027	29,872
Repayments 2027-2028	31.568
Repayments 2028-2029	32.470
Subsequent repayments	114.242
Total lease liabilities

18. Deferred income

Among current payables is recognized deferred income in the amount of USD 54.3 million due to sale of tickets for unflown flights. Revenues from passenger flights are recognized in the statement of comprehensive income when the relevant flight has been flown.

19. Events after the reporting period

No events have arisen after the reporting period of these Interim Financial Statements that require amendments or additional disclosures in the interim Financial Statements for the period ended 30 September 2024.