Page 1

AVATION PLC ( " Avation " or " the Company " ) UNAUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 30 JUNE 2021 AND INTERIM MANAGEMENT STATEMENT Avation PLC ( LSE : AVAP ) , the commercial passenger aircraft leasing company , announces preliminary unaudited financial results for the year ended 30 June 2021 . Key Financial Results • Material COVID - 19 impacts on financial results , revenue decreased 13 % to $ 117.7 million ; • Cash and bank balances increased 7 % to $ 122.5 million ; • Net Indebtedness reduced by $ 113.9 million ( 11 % ) to $ 922.6 million ; • Impairment losses of $ 87.4 million and expected credit losses on receivables of $ 25.4 million recognised for the year , reflecting the COVID - 19 disruption to the leasing industry ; and • Loss before taxation of $ 70.2 million . COVID - 19 Update • Focus on preserving liquidity and cashflow has left the fleet , business and customers substantially intact ; • Rent deferrals totalling $ 25.9 million provided to airline customers ; • Loan repayment deferrals totalling $ 35.2 million obtained from secured lenders ; • Maturity date of Avation Capital S.A. Senior Notes ( " Notes " ) extended to October 2026 ; Administrative expenses excluding non - cash warrants expense decreased by 9 % to $ 10.3 million ; and • • Capital expenditure and dividends remain temporarily suspended with a return to fleet growth expected in late 2022 . Executive Chairman , Jeff Chatfield , said : “ The year ended 30 June 2021 has been the most challenging in the Company's history . The COVID - 19 pandemic persisted throughout the year disrupting airlines , aircraft leasing and aircraft valuations . These challenges have created a significant workload and I would like to thank Avation's employees for their commitment , focus and diligence during the period . " Avation's decision to preserve liquidity and cashflow ensured survival and allowed focus to be directed to maintenance of the business , customers and leasing platform which have been preserved as the impacts of the pandemic recede and air travel returns . " The prolonged impact of the pandemic has resulted in $ 87.4 million in impairments to the value of the fleet and $ 25.4 million for expected credit losses that dominate the financial results . An end to the pandemic appears to be in sight with the rollout of global vaccination programmes supporting a return to growth in passenger numbers . A return of air travel to pre - COVID levels may result in an increase in the value of aircraft that could reverse some of the impairments in future periods . " The recent Chapter 11 filing for voluntary restructuring by Philippine Airlines should lead to a resolution of one of the last remaining lease defaults resulting from the COVID - 19 pandemic in Avation's fleet . Avation is set to emerge from the pandemic with a smaller fleet with high levels of utilisation and a long timeframe for repayment of the Company's unsecured Notes following the extension of their maturity until October 2026 . " Avation's cash and liquidity position is expected to improve in the coming months through the expected sale of underutilised aircraft and the receipt of distributions to creditors from the restructuring administrations of Virgin Australia and Philippine Airlines . This will have the combined impact of improving operational efficiency and increasing liquidity which can then be used to continue to pay down debt and fund a return to fleet growth planned for late 2022. "