CONSOLIDATED FINANCIAL STATEMENTS

2024

Fly PLAY hf.

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

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Page

Contents

Annex to the Financial Statements ...........................................................................................................................................................

Consolidated statement of Financial Position .....................................................................................................................................

Consolidated statement of Cash Flows ...................................................................................................................................................

Notes to the Consolidated Financial Statements ..............................................................................................................................

Endorsement and Statement by the Board of Directors and the CEO ......................................................................................

Independent Auditors' Report .....................................................................................................................................................................

Consolidated statement of Profit or Loss and Other Comprehensive Income ......................................................................

Consolidated statement of Changes in Equity .....................................................................................................................................

Consolidated Financial Statements of Fly Play hf. 2024

________________________________________________________________________________________________

Financial Year 2024

EU Taxonomy Disclosure

PLAY operated a fleet of 10 aircraft throughout the entire year, supporting its network and operational growth. The airline's

fleet consists exclusively of Airbus A320neo and A321neo aircraft, known for their fuel efficiency, reliability, and cost-

effectiveness. Maintaining a uniform fleet allows PLAY to streamline operations, optimize maintenance, and improve crew

flexibility.

PLAY’s load factor improved throughout 2024 and resulted in 85.3% for the full year and 1.6 million passengers were flown in

the year. PLAY had an 87.5% on-time performance in 2024. This on-time performance percentage means that out of 10,309

flights for the whole year of 2024, over 9,000 flights were on time.

The EU Taxonomy Regulation entered into force in Iceland on June 1, 2023 with Act no. 25/2023 on the provision of information

on sustainability in the field of financial services and classification system for sustainable investments.

The Company's core business is not eligible according to current technical screening criteria in force in Iceland, mainly , cf.

delegated regulation EU 2021/2139. However, the airline industry has been integrated in a recent regulation update; delegated

regulation EU 2023/2485 which entered into force in the EU in 2023 and in Iceland from 1 January 2025. Consequently, the

Company’s eligible economic activity falls under 6.19.Passenger and freight air transport.

Furthermore, in accordance with Article 8(6) and (7) of the same Regulation, PLAY provides transparency regarding activities

related to nuclear energy and natural gas. However, since PLAY does not engage in nuclear or natural gas activities, the

respective KPIs are not applicable and therefore not included, as specified in the relevant Annex of the Regulation.

PLAY remains committed to transparent reporting and compliance with EU Taxonomy requirements.The Company will closely

monitor the developments that take place and anticipates evolving its reporting with the EU Taxonomy when new insights are

learned. The disclosures of taxonomy are provided in the Annex to the 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 and uplisted to the Nasdaq Main Market in Iceland on August 2024. 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 42 destinations at

year end.

The Consolidated Financial Statements for the year 2024 have been prepared in accordance with International Financial

Reporting Standards (IFRSs) as adopted by the European Union and additional requirements of the Icelandic Financial

Statements Act no. 3/2006. The Financial Statements are presented in US dollars, which is the Company's functional currency.

The Financial Statements have been audited by the Group's independent auditors.

According to the Consolidated Financial Statement total loss for the year was USD 66 million. Equity at 31 December 2024

amounted to negative USD 33.1 million, including share capital in the amount of USD 14 million and share premium of USD 125.9

million. Reference is made to the Statement of Changes in Equity regarding the information on changes in equity. Due to this

the Company has already put a plan in place to strengthen the financial position and to ensure liquidity.

The average number of full time employees was 472 in the year 2024 (2023: total 423) thereof 212 male and 245 female and

salaries and related expenses amounted to USD 53 million in the year 2024 (2023: USD 44 million). Number of key management

was 6 thereof 2 women and 4 men.

In 2024, PLAY’s revenue grew by 4% to USD 292.2 million, compared to USD 281.8 million in 2023, driven by a 29% increase in

ancillary revenue per passenger and a 77% rise in onboard sales. This reflects PLAY's strategic focus on expanding non-ticket

revenue streams. Capacity, measured in available seat kilometers (ASK), increased by 6%.

Operating expenses rose modestly by 4.4% to USD 282.5 million, driven primarily by a 20% increase in salaries and personnel

expenses to USD 53 million. EBITDA reached USD 9.9 million, supported by steady operational performance. Depreciation and

fleet investments contributed to an EBIT loss of USD 30.5 million, compared to USD 23 million in 2023. PLAY remains focused

on revenue diversification to strengthen its financial position.

Consolidated Financial Statements of Fly Play hf. 2024

Endorsement and Statement by the Board of

Directors and the CEO, contd.:

Share Capital and Resolutions

PLAY aims to deliver its shareholders a total return in excess of its cost of capital. While the Group has a planned profitable

growth path, the cash reserves are best utilised within the Group. When a more moderate growth level is reached, the Group

aims to pay 50% of its after-tax profit to its shareholders in the form of dividends or share buy-back. Other factors which need

to be considered and may affect these payments are factors like the Group’s earnings trend, financial position, and investment

requirements. Dividends and share buy-back require a resolution by a shareholders’ meeting following a proposal by the Board

of Directors.

The Board of Directors proposes no dividend payment to shareholders in 2025 for the year 2024 and refers to the Financial

Statements regarding the treatment of loss and other changes in equity accounts.

The number of shareholders at year-end 2024 was 2,116 (2023: 1,990). At year-end 2023 and 2024 the 10 largest shareholders

were:

31.12.2024 31.12.2023

Number of shares Number of shares

in ISK thousand shares in % in ISK thousand shares in %

Birta lífeyrissjóður ........................................................................................

195,791 10.4% 81,686 9.4%

Fea ehf. ..............................................................................................................

111,701 5.9% 35,034 4.0%

Stoðir hf. ...........................................................................................................

110,000 5.8% 54,000 6.2%

Leika fjárfestingar ehf. ................................................................................

93,596 4.9% 93,596 10.8%

Landsbankinn hf. ...........................................................................................

71,206 3.8% 17,397 2.0%

IS EQUUS Hlutabréf .....................................................................................

65,779 3.5% 38,173 4.4%

Gnitanes ehf. ...................................................................................................

55,556 2.9% 0 0.0%

Einir ehf. ............................................................................................................

55,556 2.9% 0 0.0%

IS Hlutabréfasjóðurinn ................................................................................

49,748 2.6% 24,623 2.8%

Lífsverk lífeyrissjóður ..................................................................................

48,458 2.6% 37,534 4.3%

857,390 45.3% 382,044 44.0%

Other shareholders ......................................................................................

1,034,209 54.7% 486,399 56.0%

Total shares ........................................................................................

1,891,599 100.0% 868,443 100.0%

Derecognition of Deferred Tax Assets and Business Model Transformation

As part of the Company’s strategic reassessment, management has decided to implement significant changes to the business

model to better position the Company for long-term success. This transformation is expected to enhance operational

efficiency and create sustainable future value.

In light of these changes, and in accordance with IAS 12 – Income Taxes, management has adopted a conservative approach

regarding the recognition of deferred tax assets (DTA) related to tax loss carry forwards. Although the Company continues to

hold significant tax loss carry forwards and remains confident that these will be utilized in the future, the associated DTA has

been derecognized due to the inherent uncertainty in the near-term recognition of taxable profits under the revised business

model.

This derecognition has a significant impact on the Company’s equity, resulting in negative equity as of December 31, 2024.

However, it is important to emphasize that this accounting adjustment does not affect the Company’s underlying tax

attributes or its future ability to utilize the tax loss carryforwards once sufficient taxable profits are generated. The

derecognition is an accounting decision based on IAS 12 requirements rather than an indication of a reduction in the economic

benefits of these tax attributes.

Management remains confident in the long-term prospects of the Company and anticipates that, as the new business model

matures and taxable income is generated, the recognition of deferred tax assets may be reconsidered in future periods.

________________________________________________________________________________________________

Consolidated Financial Statements of Fly Play hf. 2024

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Future Outlook and Strategic Direction

Corporate Governance and Non-Financial Reporting

Statement by the Board of Directors and the CEO

Board of Directors:

CEO:

To support liquidity, PLAY prioritizes cost control and effective working capital management, ensuring efficient operations and

sustainable growth. PLAY continuously evaluates its financial position to ensure flexibility and stability. As part of this, the

company may consider raising capital within its organizational structure, depending on market conditions and strategic needs.

If management plan does not materialize, there could be an uncertainty about the Company’s ability to continue as a going

concern. See further information regarding going concern in note 2.

In line with these changes, PLAY will deploy part of its fleet outside of Iceland. The airline’s first project of this kind was with

U.S. carrier GlobalX in Miami, operating from November 1, 2024, to March 15, 2025. To support this strategy, PLAY has applied

for an air operating certificate (AOC) in Malta, with the process expected to be completed by spring 2025. The aircraft

operating under the Maltese AOC will not be based in Malta but will fly from other destinations in Europe. As a result of these

changes, PLAY plans to operate 6-7 of its aircraft under its Icelandic AOC and 3-4 under the Maltese AOC.

The Board firmly believes that changes in business plan, coming into effect in Q2 2025, will improve the economics of the

company significantly and that further capital increase will not be required during the year. Management has modelled a base

and downside liquidity headroom position for its going concern. The Board believes that there is sufficient liquidity available

for a period of at least 12 months from the date of signing of the F24 financial statements. However the Hub-and-Spoke model

is under pressure, the ACMI part of PLAY will start in Q2 and it despite careful planning there are risks involved in changing the

business model.

In the fall of 2024, PLAY announced a fundamental shift in its business model, placing greater emphasis on the strong leisure

markets outside of Iceland. At the same time, the airline is scaling back its operations connecting passengers between North

America and Europe. This adjustment has already been implemented and is reflected in the updated 2025 schedule. The

number of PLAY’s destinations in North America and Northern Europe has decreased compared to previous years, with a

stronger focus on the airline’s leisure markets in Southern Europe.

PLAY successfully transferred its share listing from the First North Growth Market Iceland to the Nasdaq Main Market in

Iceland on August 8, 2024. This achievement reflects the Company’s financial progress and commitment to transparency,

aligning with our strategic growth objectives.

Endorsement and Statement by the Board of Directors and

the CEO, contd.:

Further, in our opinion, the Consolidated 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 the Consolidated Financial Statements of PLAY for the year 2024

and confirm them by means of their signatures.

Reykjavik February 17, 2025

The Board of Directors has prepared a Corporate Governance Statement in compliance with the Icelandic Corporate

Governance guidelines which are described in full in the Corporate Governance Statement in PLAY´s annual and sustainability

report. The Board of Directors are composed of five members, thereof two women and three men.

Information on matters related to financial risk management is disclosed in note 28.

We hereby confirm that the Consolidated Financial Statements for the year 2024, to the best of our knowledge, have been

prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU.

Consolidated Financial Statements of Fly Play hf. 2024

________________________________________________________________________________________________

Opinion

Basis for Opinion

Going Concern

Key Audit Matters

Explanation of Key Audit Matter Responses to Key Audit Matter

Valuation of the leased aircraft maintenance

Independent Auditor’s Report

To the Shareholders and the Board of Directors of Fly Play hf.

We have audited the consolidated financial statements of Fly Play hf. for the year ended December 31, 2024 which comprise

the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of financial

position, the consolidated statement of changes in equity, the consolidated statement of cash flows for the year then ended,

and the notes to the consolidated financial statements, including a summary of significant accounting policies.

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those

standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

section of our report.

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the

consolidated financial statements of the current period. These matters were addressed in the context of our audit of the

consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on

these matters.

In our opinion, the accompanying consolidated financial statements give a true and fair view of the financial position of Fly

Play hf. as at December 31, 2024, and its consolidated financial performance and its consolidated cash flows for the year then

ended in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU and additional

requirements in the Icelandic Financial Statement Act.

We are independent of Fly Play hf. in accordance with the International Ethics Standards Board for Accountants’ Code of

Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the

consolidated financial statements in Iceland, and we have fulfilled our other ethical responsibilities in accordance with these

requirements and the IESBA Code.

Based on the best of our knowledge and belief, no prohibited services referred to in the EU Audit Regulation 537/2014 Article

5.1 has been provided.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Without modifying our opinion we draw attention to the Endorsement and Statement by the Board of Directors and the CEO

and Note 2 to the consolidated financial statements, which indicates that the Company has incurred a net loss of USD 66.013

thousand during the year ended December 31, 2024. These conditions, along with other matters set forth in the Statement by

the Board of Directors and the CEO and Note 2, indicate the there is uncertainty that may cast doubt on the Company’s ability

to continue as a going concern.

Our opinion in this report on the consolidated financial statements is consistent with the content of the additional report that

has been submitted to the audit committee in accordance with the EU Audit Regulation 537/2014 Article 11.

The Group operates aircraft which are held

under lease arrangements and for which it

incurs liabilities and expenses for maintenance costs

during the term of the lease. These arise from legal

and contractual obligations relating to the condition

of the aircraft when they are returned to the lessor.

The Group has recognised maintenance provision of

USD 41.252 thousand.

• Evaluated the maintenance provision model and

tested the calculations therein.

• Assessed the discount rate used in discounting the

maintenance provision as determined by management

for appropriateness.

In our audit of the Group´s leased aircraft maintenance

provision, we reviewed management´s accounting

policies and scheduled maintenance expense and

provision and carried out the following substantive audit

procedures:

Consolidated Financial Statements of Fly Play hf. 2024

________________________________________________________________________________________________

Key Audit Matters contd.

Explanation of Key Audit Matter Responses to Key Audit Matter

• Performed a recalculation of the provisions.

• Traced contractual cash flows to appropriate

supporting documentation and invoices.

Responsibilities of the Board of Directors and the CEO for the Consolidated Financial Statements

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism

throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or

error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and

appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher

than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the

override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in

the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Fly Play's internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related

disclosures made by management.

In preparing the consolidated financial statements, the Board of Directors and the CEO are responsible for assessing Fly Play

hf.’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going

concern basis of accounting unless the Board of Directors and the CEO either intends to liquidate the company or to cease

operations, or has no realistic alternative but to do so.

The board of directors and the audit committee are responsible for overseeing Fly Play’s financial reporting process.

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free

from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will

always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material

if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on

the basis of these consolidated financial statements.

• Inspected lease contracts to assess whether the

relevant lease data inputs into management´s

calculations are accurate.

The Board of Directors and the CEO are responsible for the preparation and fair presentation of the consolidated financial

statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU and additional

requirements in the Icelandic Financial Statement Act, and for such internal control as the Board of Directors and the CEO

determines is necessary to enable the preparation of consolidated financial statements that are free from material

misstatement, whether due to fraud or error.

Further information about provisions can be found in

note 23 in the consolidated financial statements.

• Assessed the adequacy of disclosures with reference

to the requirements of IAS 37 — Provisions, Contingent

Liabilities and Contingent Assets and IFRS 16 – leases.

• Assessed the appropriateness of management's key

assumptions which included assessing the estimated

cost and expected maintenance intervals.

• Tested maintenance expense for accuracy, occurrence

and cutoff and assessed the completeness of provision.

Independent Auditor’s Report, contd.:

Management has applied several judgements and

estimates in accounting for leased aircraft

maintenance provision.

We considered this to be a key audit matter given its

significance to the consolidated financial statements

and due to the estimates involved in measuring the

maintenance provision.

Consolidated Financial Statements of Fly Play hf. 2024

________________________________________________________________________________________________

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements contd.

Report on European single electronic format (ESEF Regulation)

• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures,

and whether the consolidated financial statements represent the underlying transactions and events in a manner that

achieves fair presentation.

We communicate with the Board of Directors and the Audit Committee regarding, among other matters, the planned scope

and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify

during our audit.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within

the Group to express an opinion on the consolidated and separate financial statements. We are responsible for the direction,

supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We also provide the Board of Directors and the Audit Committee a statement that we have complied with relevant ethical

requirements regarding independence, and to communicate with them all relationships and other matters that may

reasonably be thought to bear on our independence, and where applicable, related safeguards.

Independent Auditor’s Report, contd.:

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit

evidence obtained, whether a uncertainty exists related to events or conditions that may cast doubt on the Company’s ability

to continue as a going concern. If we conclude that a uncertainty exists, we are required to draw attention in our auditor’s

report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our

opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future

events or conditions may cause the Company to cease to continue as a going concern.

From the matters communicated with the Board of Directors and the Audit Committee, we determine those matters that

were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key

audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the

matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report

because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such

communication.

As part of our audit of the Consolidated Financial Statements of Fly Play hf. we performed procedures to be able to issue an

opinion on whether the consolidated financial statements of Fly Play hf. for the year 2024 with the file name

[flyplayhf-2024-12-

31-en.zip] is prepared, in all material respects, in compliance with laws no. 20/2021 disclosure obligation of issuers of securities

and the obligation to flag relating to requirements regarding European single electronic format regulation EU 2019/815 which

include requirements related to the preparation of the Consolidated Financial Statements in XHTML format and iXBRL

markup.

Management is responsible for preparing the consolidated financial statements in compliance with laws no. 20/2021

disclosure obligation of issuers of securities and the obligation to flag. This responsibility includes preparing the consolidated

financial statements in a XHTML format in accordance to EU regulation 2019/815 on the European single electronic format

(ESEF regulation).

Our responsibility is to obtain reasonable assurance, based on evidence that we have obtained, on whether the consolidated

financial statements is prepared in all material respects, in compliance with the ESEF Regulation, and to issue a report that

includes our opinion. The nature, timing and extent of procedures selected depend on the auditor's judgement, including the

assessment of the risks of material departures from the requirement set out in the ESEF regulation, whether due to fraud or

error.

In our opinion, the consolidated financial statements of Fly Play hf. for the year 2024 with the file name [flyplayhf-2024-12-31-

en.zip] is prepared, in all material respects, in compliance with the ESEF Regulation.

Consolidated Financial Statements of Fly Play hf. 2024

________________________________________________________________________________________________

Appointment of auditor

Deloitte ehf.

Eyþór Guðjónsson

State Authorized Public Accountant

Deloitte was appointed auditor of Fly Play hf. By the general meeting of shareholders on March 7, 2024. Deloitte have been

elected since the general meeting 2024.

Kópavogur, February 17, 2025.

Independent Auditor’s Report, contd.:

Consolidated Financial Statements of Fly Play hf. 2024

Consolidated Statement of Profit or Loss and

Other Comprehensive Income for the year 2024

Revenue	Notes	2024	2023*
Transport revenue ..........................................................................................................................................................	6	292,200	281,777
Operating expenses
Aviation expenses ...........................................................................................................................................................	7	203,897	201,458
Salaries and other personnel expenses .................................................................................................................	8	52,982	43,975
Other operating expenses ...........................................................................................................................................	9	25,412	24,996
		282,291	270,429
Operating profit before, depreciation, financial items
and tax (EBITDA) .............. ........	0	9 ,9 09	11 , 34 8
Depreciation and Amortization ................................................................................................................................	10	40,452	34,303
Operating loss (EBIT) .............. .............	0	( 3 0, 54 3)	( 22 , 95 5)
Financial income and expenses
Financial income .............................................................................................................................................................		1,812	1,714
Financial expense ............................................................................................................................................................		( 24,777)	( 23,657)
Foreign exchange ............................................................................................................................................................		2,216	943
	11	( 20,749)	( 21,000)
Loss before tax (EBT) .............. ..............	0	( 51 , 29 2)	( 43 , 95 5)
Income tax .........................................................................................................................................................................	12,18	( 14,721)	8,927
Loss for the year .............. ................	0	( 66,013)	( 35,028)
Other comprehensive (loss) income
Items that are or may be reclassified from equity to the income statement on later date
Fuel hedges - effective portion of changes in fair value, net of tax ...........................................................		( 952)	316
Fuel hedges - reclassified to profit or loss ............................................................................................................		0	(121)
		(952)	195
Total comprehensive loss for the year ..............		( 66,965)	( 34,833)
Loss per share
Basic and diluted loss per share in US cent .........................................................................................................	22	(5.6)	(5.2)

* The comparative information has been restated as discussed in note 2.

________________________________________________________________________________________________

Consolidated Financial Statements of Fly Play hf. 2024

All amounts are in USD thousands

Consolidated Statement of Financial Position

at 31 December 2024

Assets	Notes	2024	2023*
Intangible assets .........................................................................................................................	13	13,915	14,195
Right-of-use assets ....................................................................................................................	14	259,861	283,78 4
Operating assets .........................................................................................................................	15	17,941	11,855
Aircraft deposits & security instalments ...........................................................................	17	11,452	13,209
Deferred tax assets ....................................................................................................................	18	10,262	24,955
Non-current assets		313,431	347,998
Inventories ....................................................................................................................................		858	180
Trade and other receivables ...................................................................................................	19	24,811	32,992
Prepaid expense ..........................................................................................................................		1,625	2,754
Cash and cash equivalents ......................................................................................................	20	23,604	21,606
Current assets		50,898	57,532
Total assets		364,329	405,530
Shareholders equity
Share capital .................................................................................................................................		14,046	6,797
Share premium ............................................................................................................................		125,897	101,490
Other components of equity ..................................................................................................		1,315	1,160
Accumulated loss .......................................................................................................................		( 174,363)	( 107,398)
Total shareholder equity	21	( 33,105)	2,049
Liabilities
Provisions ......................................................................................................................................	23	36,889	37,442
Lease liabilities ............................................................................................................................	24	229,937	247,761
Non-current liabilities		266,826	285,203
Provisions ......................................................................................................................................	23	4,363	2,777
Lease liabilities ............................................................................................................................	24	27,671	25,300
Trade and other payables ........................................................................................................	25	55,786	43,730
Deferred income .........................................................................................................................	26	42,788	46,471
Current liabilities		130,608	118,278
Total liabilities		397,434	403,481
Total shareholders equity and liabilities		364,329	405,530

* The comparative information has been restated as discussed in note 2.

________________________________________________________________________________________________

Consolidated Financial Statements of Fly Play hf. 2024

All amounts are in USD thousands

Consolidated Statement of Changes in Equity

for the year 2024

Other

				Share Share components Accumulated	Total
	capital	premium	of equity	loss	equity
2024
Balance at January 1, 2024 ....................	6 ,7 9 7	1 01 ,4 9 0	1 , 16 0	(1 07 ,3 9 8)	2, 0 49
Loss for the year ......................................	0	0	0	(66 ,013)	(66,013)
Other comprehensive income ..................	0	0	0	(952)	(95 2)
Total comprehensive loss .....................	0	0	0	(66 , 96 5)	(6 6, 9 65)
Share capital increase .............................	7,249	24,407	0	0	31,656
Stock options expense .............................	0	0	155	0	155
Balance at December 31, 2024 ................	1 4, 04 6	12 5, 89 7	1, 31 5	(1 74 , 36 3)	(33 , 10 5)
			Other
	Share	Share	components	Accumulated	Total
	capital	premium	of equity	loss	equity
2023
Balance at January 1, 2023 ....................	6 ,7 4 0	1 0 0, 58 7	13 , 84 4	(8 4, 9 32)	36 , 23 9
Loss for the year ......................................	0	0	0	(35,02 8)	(35,028)
Other comprehnsive income ....................	0	0	195	0	195
Total comprehensive loss .....................	0	0	0	(3 5, 02 6)	(35 , 02 6)
R&D reserve transfers .............................	0	0	(12,560)	12,560	0
Exercised stock options ...........................	0	5 02	(502)	0	0
Share capital increase .............................	57	401	0	0	45 8
Stock options expense .............................	0	0	183	0	183
Balance at December 31, 2023 ................	6 ,7 9 7	1 01 ,4 9 0	1 , 16 0	(1 07 ,3 9 8)	2, 0 49

________________________________________________________________________________________________

Consolidated Financial Statements of Fly Play hf. 2024

All amounts are in USD thousands

Consolidated Statement of Cash Flows

for the year 2024

Cash generated from (used in) operating activities	Notes	2024	2023*
Loss for the year .................................................................................................................................................................		( 66,013)	( 35,028)
Adjustments for Depreciation and amortization ................................................................................................................................	10	40,452	34,303
Net finance expense ....................................................................................................................................................	11	20,749	21,000
Stock options .................................................................................................................................................................		155	183
Income tax .......................................................................................................................................................................	12	14,721	( 8,927)
Changes in operating assets and liabilities		10,064	11,531
Inventories, decrease (increase) ...............................................................................................................................		( 678)	639
Trade and other receivables, decrease / (increase) ...........................................................................................		9,312	( 12,226)
Trade and other payables, increase ........................................................................................................................		9,839	37,638
Changes in operating assets and liabilities		18,473	26,051
Cash generated from operations before interest and taxes		28,537	37,582
Financial income received .........................................................................................................................................		1,812	1,714
Interest paid ....................................................................................................................................................................		( 24,602)	( 22,166)
Net cash generated from operating activities		5,747	17,130
Cash flows (to) from investing activities
Deposits .................................................................................................................................................................................	17	1,757	( 2,218)
Investment of operating assets .....................................................................................................................................	15	( 8,397)	( 6,320)
Investment of intangible assets ....................................................................................................................................	13	( 3,272)	( 4,430)
Net cash to investing activities		( 9,912)	( 12,968)
Cash flows from financing activities
Repayment of lease liabilities ........................................................................................................................................	24	( 25,836)	( 20,381)
Proceeds from share issue ..............................................................................................................................................	21	32,620	458
Expenses incurred for the share issuance .................................................................................................................	21	(965)	0
Net cash to financing activities		5,819	( 19,923)
Increase / (decrease) in cash and cash equivalents ...................................................................................................		1,654	( 15,761)
Effect of exchange rate fluctuations on cash held ........................................................................................		346	1,133
Cash and cash equivalents at beginning of the year ..........................................................................................		21,606	36,234
Cash and cash equivalents at year end .................................................................................................................		23,604	21,606
Investment and financing without cash flow effect
Acquisition of right-of-use assets ................................................................................................................................	14	( 10,339)	( 69,034)
Lease liabilities from new leases ...................................................................................................................................	24	10,339	69,034
Capitalized maintenance obligation under lease ....................................................................................................	24	-	21,289
Lease liabilities from new leases ...................................................................................................................................		-	21,289
* The comparative information has been restated as discussed in note 2.

________________________________________________________________________________________________

Consolidated Financial Statements of Fly Play hf. 2024

All amounts are in USD thousands

Notes

1. Reporting entity

Fly Play hf. (the Company 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, Iceland. The Company was uplisted to the Nasdaq Main Market in Iceland on

August 2024.

The Consolidated Financial Statements of the Company as at and for the year ended 31 December 2024

comprise the Company and its subsidiary (together referred to as "Group"). The subsidiary 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%. The subsidiary provides technical and administrative support for the

Company.

2. Basis of preparation

Statement of compliance

The Group´s Consolidated Financial Statements have been prepared in accordance with International Financial

Reporting Standards (IFRSs) as adopted by the EU and additional Icelandic financial statements Act no. 3/2006.

The Consolidated Financial Statements were approved by the Board of Directors of Fly Play hf. on February 17,

2025

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 in note

32.

Going concern

The Group incurred a loss for the year 2024 amounting to USD 41 million (2023: USD 34 million), with a current

ratio of 0.39 at year-end (2023: 0.49). Due to this, and discussed in the Endorsement and Statement by the Board

of Directors and the CEO, the Board of Directors will focus on working capital management, cost control, and

other financial measures to strengthen the Company’s financial position and to ensure liquidity and its ability to

continue as a going concern

Change of accounting policy

During the year, the Company changed its accounting policy for its variable maintenance reserve rent for its

leased aircraft, where previously the total expected maintenance cost was included in the provisions (and

right-of-

use assets) while now the variable maintenance rent (based on usage, e.g. flight hours) is expensed as occurred as

the level of flight potential received and to be returned is the same.

The Company feels that this accounting policy is better aligned with the accounting policies applied within the

industry and provide a better comparison with other airlines.

The following table summarises the impact of the retrospective application of the new accounting policy on

Consolidated Statement of Profit or Loss for the year 2023, the Consolidated Statement of Financial Position as

at 31.12.2023 and the Consolidated Statement of Cash Flows for the year 2023:

	Previuosly	Adjustments	Restated
Consolidated statement of profit or loss	Reported	Made	Amount
Aviation expenses ..................................................................................................	179,503	21,955	201,458
Depreciation and Amortization .........................................................................	53,989	(19,686)	34,303
Financial expense ...................................................................................................	27,404	(3,748)	23,656
Tax expense ..............................................................................................................	10,262	1,335	8,927
Decreased the loss for the financial year ......................................................	(35,171)	143	(35,028)
Consolidated statement financial position
Right-of-use assets ................................................................................................	338,450	(54,666)	283,784
Provisions ..................................................................................................................	(96,364)	56,145	(40,219)
Deferred tax asset ..................................................................................................	26,290	(1,335)	24,955
Accumulated losses ...............................................................................................	107,542	(143)	107,398

________________________________________________________________________________________________

Consolidated Financial Statements of Fly Play hf. 2024

All amounts are in USD thousands

Notes, contd.:

2. Basis of preparation cont.:

	Previuosly	Adjustments	Restated
Consolidated statement of Cash Flows	Reported	Made	Amount
Loss for the year ......................................................................................................	(35,171)	143	(35,028)
Depreciation and Amortization .........................................................................	53,989	(19,686)	34,303
Net financial expense ............................................................................................	24,748	(3,748)	21,000
Income tax .................................................................................................................	(10,262)	1,335	(8,927)
Trade and other payables ....................................................................................	15,682	21,956	37,638
Net cash generated from operating activities .............................................	17,130	0	17,130

Functional and presentation currency

These Consolidated Financial Statements are presented in United States Dollars (USD), which is the Company's

functional currency. All financial information presented in United States Dollars has been rounded to the nearest

thousand unless otherwise stated.

Use of estimates and judgements

In preparing these Consolidated 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.

Information about assumptions and estimates that have a significant risk of resulting in a material adjustment

within the next financial year are included in note 32(h) regarding determination of useful life of operating assets,

32(e) regarding recognition of deferred tax assets, 23 regarding Provisions and 24 regarding lease liabilities.

Operating segments

The Group operates as single operating segment at this time.

________________________________________________________________________________________________

Consolidated Financial Statements of Fly Play hf. 2024

All amounts are in USD thousands

Notes, contd.:

Revenue

	2024	2023
Revenue is specified as follows:
Airfare ..............................................................................................................................................................................	192,825	192,652
Ancillary ..........................................................................................................................................................................	90,285	82,604
Cargo revenue ..............................................................................................................................................................	4,504	3,594
Other revenue ..............................................................................................................................................................	4,587	2,928
Transport revenue total ...........................................................................................................................................	292,200	281,777

Aviation expenses

Aviation expenses are as follows:

Aircraft fuel ...................................................................................................................................................................	88,357	89,131
Aircraft handling, landing and communication ...............................................................................................	66,888	59,003
Maintenance of aircraft ...........................................................................................................................................	36,564	35,770
Emissions permits (ETS) ..........................................................................................................................................	6,071	10,948
Catering ..........................................................................................................................................................................	1,375	1,814
Other aviation expenses ..........................................................................................................................................	4,642	4,792
Aviation expenses total ............................................................................................................................................	203,897	201,458

Salaries and other personnel expenses

Salaries and other personnel expenses are specified as follows:

Salaries ............................................................................................................................................................................	43,920	36,233
Pension fund contributions ....................................................................................................................................	4,383	3,630
Other salary related expenses ...............................................................................................................................	3,818	2,866
Accrued vacation ........................................................................................................................................................	706	1,063
Stock options ...............................................................................................................................................................	155	183
Total salaries and other personnel expenses ...................................................................................................	52,982	43,975
Average number of full year equivalents ...........................................................................................................	472	423
Employees at year end .............................................................................................................................................	457	477

Other operating expenses

Other operating expenses are as follows:

Marketing and sales expenses ...............................................................................................................................	9,516	9,251
Travel and other employee expenses .................................................................................................................	6,050	9,090
IT cost ..............................................................................................................................................................................	6,235	4,381
Audit, legal and other professional services .....................................................................................................	1,454	1,153
Housing and office expenses .................................................................................................................................	1,161	270
Other operating expenses .......................................................................................................................................	996	851
Other operating expenses total ............................................................................................................................	25,412	24,996

10.

Depreciation and Amortization

Depreciation and amortization are specified as follows:

Depreciation of right-of-use assets, see note 14 ............................................................................................	34,875	30,320
Amortization of intangible assets, see note 13 ................................................................................................	3,552	2,795
Depreciation of operating assets, see note 15 .................................................................................................	2,025	1,188
Depreciation and amortization total ...................................................................................................................	40,452	34,303

11.

Financial income and (expense)

Financial income (expenses) is specified as follows:

	2024	2023
Interest expenses of lease liabilities ....................................................................................................................	( 17,736)	( 16,897)
Other finance expenses and transaction fees .................................................................................................	( 7,041)	( 6,759)
Net foreign currency exchange rate loss ...........................................................................................................	2,216	943
Interest income on bank deposits ........................................................................................................................	1,812	1,714
Net financial expenses ..............................................................................................................................................	( 20,749)	( 21,000)

________________________________________________________________________________________________

Consolidated Financial Statements of Fly Play hf. 2024

All amounts are in USD thousands

Notes, contd.:

12.

Income tax

Income tax recognized in the income statement is specified as follows:

				2024	2023
Total tax expense recognized in the income statement .............................................................................				( 14,721)	8,927
Effective tax rate			2024		2023
Loss before income tax ...........................................................................................................			( 51,292)		( 43,955)
Income tax according to current tax rate ........................................		20.0%	10,296	20.0%	8,791
Change of accounting policy ................................................................		0.0%	0	2.4%	( 1,040)
Previously unrecognized ........................................................................	(	0.7%)	( 350)	1.0%)	454
Write-down of previously recognised deferred tax assets .......	(	46.8%)	( 24,090)	0.0%	0
Non-deductible expense ........................................................................		0.0%	0	0.3%	( 120)
Currency exchange ..................................................................................	(	1.4%)	( 722)	1.9%	842
Other ..............................................................................................................		0.4%	145	0.0%	0
Effective tax rate .......................................................................................	(	28.7%)	( 14,721)	19.9%	8,927

(

13. Intangible assets

Intangible assets and their amortization are specified as follows:

	Software	Long-term
Cost	and website	cost	Total
Balance at January 1, 2023 .....................................................................................................	9,556	5,953	15,509
Additions .......................................................................................................................................	4,394	36	4,430
Balance at December 31, 2023 ..............................................................................................	13,949	5,989	19,939
Additions .......................................................................................................................................	3,272	0	3,272
Balance at December 31, 2024 ..............................................................................................	17,221	5,989	23,211
Amortization and impairment losses
Balance at January 1, 2023 .....................................................................................................	2,076	872	2,948
Amortization ................................................................................................................................	2,191	605	2,795
Balance at December 31, 2023 ..............................................................................................	4,266	1,477	5,743
Amortization ................................................................................................................................	2,967	585	3,552
Balance at December 31, 2024 ..............................................................................................	7,233	2,062	9,295
Carrying amount
January 1, 2023 ............................................................................................................................	7,480	5,081	12,561
December 31, 2023 ....................................................................................................................	9,683	4,513	14,195
December 31, 2024 ....................................................................................................................	9,988	3,928	13,915
Carrying amount is specified as follows
Thereof internally generated .................................................................................................	884	3,175	4,059
Thereof externally generated ................................................................................................	9,139	717	9,855
	10,023	3,892	13,914
Amortization rate .......................................................................................................................	20-33%	10-20%

There are no indicators of impairment of intangible assets at year-end.

________________________________________________________________________________________________

Consolidated Financial Statements of Fly Play hf. 2024

All amounts are in USD thousands

Notes, contd.:

14.

Right-of-use assets

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

	Aircraft and
	engines	Other	Total
Balance at January 1, 2023 .....................................................................................................	296,595	1,445	298,040
Additions .......................................................................................................................................	90,323	0	90,323
Depreciation ................................................................................................................................	( 29,890)	( 429)	( 30,320)
Indexed leases .............................................................................................................................	0	94	94
Changes to IFRS 16 lease computation .............................................................................	( 74,354)	0	( 74,354)
Balance at December 31, 2023 ..............................................................................................	282,673	1,110	283,784
Balance at January 1, 2024 .....................................................................................................	282,673	1,110	283,784
Additions .......................................................................................................................................	10,339	465	10,804
Depreciation ................................................................................................................................	( 34,427)	(448)	( 34,875)
Indexed leases .............................................................................................................................	0	148	148
Balance at December 31, 2024 ..............................................................................................	258,585	1,276	259,861

For further information on lease agreements, refer to note 24 - Lease liabilities.

Refer note 2 for the information of IFRS 16 lease computation changes

15. Operating assets

Operating assets and depreciation are specified as follows:

	Aircraft-	Other
	and flight	property and
	equipment	equipment	Total
Cost
Balance at January 1, 2023 .....................................................................................................	6,680	792	7,473
Additions .......................................................................................................................................	6,127	192	6,320
Balance at December 31, 2023 ..............................................................................................	12,808	985	13,792
Additions .......................................................................................................................................	8,274	123	8,397
Balance at December 31, 2024 ..............................................................................................	21,082	1,108	22,189
Depreciation
Balance at January 1, 2023 .....................................................................................................	545	205	750
Depreciation ................................................................................................................................	788	400	1,188
Balance at December 31, 2023 ..............................................................................................	1,332	605	1,938
Depreciation ................................................................................................................................	1,785	240	2,025
Balance at December 31, 2024 ..............................................................................................	3,117	845	4,248
Carrying amount
January 1, 2023 ............................................................................................................................	6,136	587	6,723
December 31, 2023 ....................................................................................................................	11,475	379	11,855
December 31, 2024 ....................................................................................................................	17,964	262	17,941
Depreciation rate .......................................................................................................................	10-20%	20-33%

16.

Insurance value

The insurance value of operating and right-of-use assets at year end 2024 amounted to USD 569 million (2023: 587 million).

17.

Aircraft deposits & security instalments

The Group has paid aircraft deposits and security instalment in the amount of USD 11.5 million at year end 2024 (2023: USD

13.2 million).

________________________________________________________________________________________________

Consolidated Financial Statements of Fly Play hf. 2024

All amounts are in USD thousands

Notes, contd.:

18.

Deferred tax assets

Deferred tax assets are specified as follows:

	2024	2023
Balance at January 1 ..................................................................................................................................................	24,955	16,027
Previously unrecognized ..........................................................................................................................................
Calculated income tax, recognized in the Income statement ..................................................................	( 14,721)	8,927
Other items ...................................................................................................................................................................	28	0
Deferred tax at the end of the year .....................................................................................................................	10,262	24,955
Deferred tax assets are attributable to the following:
Carry-forward tax loss ..............................................................................................................................................	9,143	21,285
Right-of-use assets ....................................................................................................................................................	2,631	4,820
Stock options ...............................................................................................................................................................	162	193
Operating assets .........................................................................................................................................................	( 1,047)	( 472)
Currency exchange difference ..............................................................................................................................	( 360)	( 92)
Intangible assets .........................................................................................................................................................	( 268)	( 819)
Deferred tax assets at year end ............................................................................................................................	10,262	24,955

As of December 31, 2024, the Company has tax loss carry forwards amounting to USD 166.2 million, which remain available for

future offset against taxable profits. However, in accordance with IAS 12 – Income Taxes, a deferred tax asset (DTA) is

recognized only to the extent that it is probable that future taxable profits will be available to utilize these losses.

Following a strategic reassessment, the Company has undertaken a significant change in its business model, impacting the

expected timing and nature of taxable profits. As a result, management has conducted a detailed assessment of both positive

and negative evidence when evaluating the recognition of the deferred tax asset.

Positive evidence supporting recognition includes:

•The Company’s substantial tax loss carry forwards remain available for future use.

•The long-term growth potential of the revised business model.

Negative evidence leading to derecognition includes:

• The inherent uncertainty regarding the timing and magnitude of taxable profits under the new business model.

• As the revised business model introduces a new operational framework, there is currently insufficient evidence to support

a reliable expectation of profitability in the near term.

• While management believes in the long-term success of the business model transformation, it is too early to establish

concrete evidence that the generation of sufficient taxable profits is more likely than not, as required for DTA recognition

under IAS 12.

Given these factors, while the Company remains confident in the long-term benefits of its tax attributes, the negative

evidence currently outweighs the positive evidence in terms of meeting the probability threshold under IAS 12. Consequently,

the deferred tax asset has been derecognized in the current period, resulting in a significant impact on equity, including

negative equity as of December 31, 2024.

This accounting adjustment does not reduce the availability or economic benefit of the tax loss carry forwards, and the

Company expects to reassess the recognition of the DTA as the business model transition progresses and taxable income is

generated in future periods. The impact of the derecognition is reflected in the income tax expense for the period.

Carry-forward tax loss are specified as follows:

Carry-forward tax loss from 2019 expires 2029 ................................................................................................................................	1,214
Carry-forward tax loss from 2020 expires 2030 ..............................................................................................................................	4,368
Carry-forward tax loss from 2021 expires 2031 .................................................................................................................................	24,448
Carry-forward tax loss from 2022 expires 2032 ...............................................................................................................................	45,717
Carry-forward tax loss from 2023 expires 2033 ...............................................................................................................................	27,396
Carry-forward tax loss from 2024 expires 2034 ...............................................................................................................................	63,025
	166,168

Management has concluded that financial statements reflect write-off of significan portion of deferred tax assets. This

decision, made in alignment with accounting best practices. The adjustment does not impact the Company’s cash position,

operations, or ability to execute its strategic plans. It is an accounting decision reflecting evolving market conditions and

regulatory factors, ensuring a conservative financial approach.

________________________________________________________________________________________________

Consolidated Financial Statements of Fly Play hf. 2024

All amounts are in USD thousands

Notes, contd.:

19.

Trade and other receivable

Trade and other receivable are specified as follows:

Credit card receivables ............................................................................................................................................	20,224	30,968
Trade receivables ........................................................................................................................................................	1,295	564
Other receivables .......................................................................................................................................................	3,292	1,460
	24,811	32,992

20.

Cash and cash equivalents

Cash .................................................................................................................................................................................	14,329	12,144
Restricted cash ............................................................................................................................................................	9,275	8,956
Marketable securities ...............................................................................................................................................	0	506
	23,604	21,606

Restricted cash is held in bank accounts pledged against credit cards acquirers and airport operators. The largest amount

(USD 6.4 m) is pledged against credit card claims and at the reporting date is restricted until the end of January 2025 but

management expects it to be renewed. That amount is included in cash and cash equivalents in the statement of financial

position. Other restricted cash amounts (USD 2.6 m) are pledged against airport operators, handling agents and the tax

authorities.

21.

Equity

Share capital

The Company's share capital at the end of the period amounted to ISK 1,892 million (USD 14 million). One vote is attached to

each share of one ISK.

During the year the Company increased its share capital in the amount of ISK 1,023 million (USD 7.2 million) at the rate of ISK

4.5 per share resulting in a total of ISK 4,602 million (USD 33 million). Cost incurred for the Share issuance process was ISK 136

million (USD 965 thousands)

Share premium

Share premium represents excess of payment above nominal value that shareholders have paid for shares sold by the

Company. The balance of the share premium account can be used to offset losses not covered by other reserves or to offset

stock splits.

Other components of equity

At year end there were a total of ISK 36.6 million shares unvested or not exercised due to share agreements. A third of the

shares will vest annually between 2025-2027. The options will be settled with equity.

The fair value of the options was determined using a Black-Scholes option pricing model. The fair value of the employees

stock options is recognised as expense and included in salaries and related expenses. The average excercise price for all

outstanding stock options is 13.5 per share. Volatility is 37.4% and the discount rate ranges from 2% to 6.5%.

Estimated remaining expenses due to active stock options is USD 186.5 thousand.

		Fuel hedges Stock options
Balance at December 31, 2023 ...............................................................................................		1,160
Fuel hedges - effective portion of changes in fair value, net of tax	( 952)	0
Stock options charge for the year .........................................................................................	0	155
Balance at December 31, 2024 ...............................................................................................	( 952)	1,315

Retained earning (Accumulated loss)

Retained earning (Accumulated loss) shows accumulated profit or loss of the Group after deducting contributions to the

statutory reserve and dividend. Retained earnings can be distributed to shareholders in the form of dividends.

Dividend

No dividend was paid to shareholders during the year 2024. The Board of Directors proposes that no dividend shall be paid to

shareholders during the year 2025 due to operations in the year 2024.

Capital management

The Board's policy is to maintain a strong capital base to sustain future development of the business.

________________________________________________________________________________________________

Consolidated Financial Statements of Fly Play hf. 2024

All amounts are in USD thousands

Notes, contd.:

22. Loss 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 stock options would not dilute the earnings per share only decrease loss per share.

Basic loss per share

	2024	2023
Loss for the year attributable to equity holders of the Group ..................................................................	( 66,013)	( 35,028)
Weighted average number of shares for the year .........................................................................................	11,788	6,760
Basic loss per share in US cent per share ..........................................................................................................	( 5.6)	( 5.2)
Diluted loss per share in US cent per share ......................................................................................................	( 5.6)	( 5.2)

23.

Provisions

Provisions for aircraft maintenance on leased aircraft are as follows:

	2024	2023
Balance at January 1 ..................................................................................................................................................	40,219	33,875
Increases in provisions during the year ..............................................................................................................	2,782	7,675
Utilization of provision during the year ..............................................................................................................	( 1,749)	( 1,331)
Balance at December 31 ........................................................................................................................	41,252	40,219
Current provisions ......................................................................................................................................................	( 4,363)	( 2,777)
Non-current provisions ............................................................................................................................................	36,889	37,442

The expected timing of the outflows of economic benefits associated with the provisions at December 31, 2023 and

December 31, 2024, are as follows:

	2024	2023
To be utilzed in 2024 ................................................................................................................................................	0	2,777
To be utilzed in 2025 .................................................................................................................................................	4,363	3,461
To be utilzed in 2026 ................................................................................................................................................	3,301	3,361
To be utilzed in 2027 ................................................................................................................................................	18,124	14,873
To be utilzed in 2028 ...............................................................................................................................................	2,836	2,864
To be utilzed in 2029 ................................................................................................................................................	2,911	2,942
Thereafter .....................................................................................................................................................................	9,718	9,941
Provisions for leased aircraft maintenance .....................................................................................................	41,252	40,219

24.

Lease liabilities

The lease agreements constitute a lease under IFRS 16. The total number of aircraft in operation at year end were 10.

Lease liabilities are as follows:

		Year of
	Average rate	maturity	Aircraft	Real estate	Total
Lease payments in USD .............................	5.6%	8-12 years	256,661	0	256,661
Lease payments in ISK, indexed ..............	4.3%	5 years	0	948	948
Total lease liabilities .....................................			256,661	948	257,608

	2024	2023
Balance at January 1 .................................................................................................................................................	273,060	224,053
New leases ....................................................................................................................................................................	10,339	69,034
Indexed leases .............................................................................................................................................................	37	16
Payment of lease liabilities ....................................................................................................................................	( 25,836)	( 20,381)
Currency translation ................................................................................................................................................	8	339
Balance at December 31 ..........................................................................................................................................	257,607	273,060
Current maturities .....................................................................................................................................................	( 27,671)	( 25,300)
Total non-current lease liabilities ........................................................................................................................	229,937	247,761

________________________________________________________________________________________________

Consolidated Financial Statements of Fly Play hf. 2024

All amounts are in USD thousands

Notes, contd.:

24.

Lease liabilities, contd.:

Repayments of lease liabilities are distributed over the next 5 years as follows:

Repayments 2025 .......................................................................................................................................................................................	27,671
Repayments 2026 .......................................................................................................................................................................................	28,999
Repayments 2027 .......................................................................................................................................................................................	30,360
Repayments 2028 .......................................................................................................................................................................................	32,007
Repayments 2029 .......................................................................................................................................................................................	32,025
Subsequent repayments ........................................................................................................................................................................	106,546
Total lease liabilities ...................................................................................................................................................................................	257,607

Cash flow from lease liabilites are as follows:

	2024	2023
Payment of principal portion of lease liabilities ............................................................................................	25,836	20,381
Payment of interest expenses of lease liabilities ..........................................................................................	15,458	14,862
Total payments ...........................................................................................................................................................	41,294	35,243

Since beginning operations, the Group has entered into lease agreements for a total of 10 Airbus A320neo and A321neo

aircraft, all of which are operated year-round. The repayment schedule above reflects liabilities for the full fleet of 10 aircraft

in 2024, in line with the Group’s fleet expansion and operational strategy. The increase in lease liabilities is driven by the

introduction of additional engine, resulting in higher financial commitments for the period.

25. Trade and other payables

Trade and other payables are specified as follows:

	2024	2023
Trade payable ...............................................................................................................................................................	23,566	19,585
Other payables .............................................................................................................................................................	32,220	24,146
	55,786	43,731

26.

Deferred income

Deferred revenues in the amount of USD 42.8 million are recognised among current liabilities in the statement of financial

position. Deferred revenue is due to sale of unflown flights and outstanding gift certificates at year end. Revenues from

passenger flights are recognized in the Consolidated statement of profit or loss when the relevant flight has been flown.

27.

Derivatives used for hedging

Derivatives used for hedging are valued by a brokers quote. The Group uses forward contract to hedge a part of jet fuel

purchases. All outstanding fuel hedge contracts are effective. As at 31 December 2024, market to market value of fule hedge

conracts are USD 1.1 m. The fair value changes of the hedge are accounted for in Other comprehensive (loss) income.

28.

Financial risk management

Overview

The Group has exposure to the following financial risks: credit risk, liquidity risk and market risk. Market risk consists of

interest rate risk, currency risk, carbon price risk and fuel price risk.

This note presents information about the Group's exposure to each of the above risks, the Group's objectives, policies, and

processes for measuring and managing risk, and the Group's management of capital. Further quantitative disclosures are

included throughout these Consolidated Financial Statements.

Risk management framework

The Board of Directors has overall responsibility for the establishment and oversight of the Group's risk management

framework. The Group's Risk Management Committee is responsible for developing and monitoring the Group's risk

management policies. The Committee reports regularly to the Board of Directors on its activities. The Group's risk

management policies are established to identify and analyze the risks faced by the Group, to set appropriate risk limits and

controls, and to monitor risks and adherence to limits. Based on these analysis the Group makes decisions about whether to

use derivatives to hedge against certain types of risks.

________________________________________________________________________________________________

Consolidated Financial Statements of Fly Play hf. 2024

All amounts are in USD thousands

Notes, contd.:

28.

Financial risk management, contd.:

Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its

contractual obligations, and arises principally from the Group's receivables from customers.

Exposure to credit risk is influenced mainly by the age of trade receivables, financial standing and individual characteristics of

its customer.

Exposure to credit risk

The carrying amounts of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at

the reporting date was as follows:

	Notes	2024	2023
Cash and cash equivalents .....................................................................................................	20	23,604	21,606
Credit card receivables ............................................................................................................	19	20,224	30,968
Aircraft deposits & security instalments ..........................................................................	17	11,452	13,209
Trade receivable and other receivable ..............................................................................	19	4,587	2,024
		59,867	67,807

The majority of financial assets are claims on financial institutions, credit card claims and cash, where the counterparty is a

financially stable party with very low credit default risk. USD 659k impairment was made for the trade receivable based on

both baisis of specific and general.

Liquidity risk

Liquidity risk is the risk that the Group may face challenges in meeting its financial obligations as they fall due. The Group

actively manages this risk through disciplined working capital management, cost control, and careful cash flow planning to

ensure sufficient liquidity under both normal and stressed conditions.

While liquidity constraints remain a key focus, management closely monitors cash flows and financial commitments to

mitigate risks and maintain operational stability.

Following are the remaining contractual maturities of financial liabilities at the reporting date, including estimated interest

payments:

	Carrying	Contractual cash	Within 12			More than
31 December 2024	amount	flows	months	1-2 years	3-5 years	5 years
Trade and other payables ...........................	55,786	55,786	55,786	0	0	0
Lease liability .....................	257,607	257,607	27,673	28,997	62,367	138,571
Provision ..............................	41,252	41,252	4,363	3,301	20,959	12,629
	354,645	354,646	87,822	32,298	83,326	151,200
31 December 2023
Trade and other payables ...........................	43,730	43,730	43,730	0	0	0
Lease liability .....................	273,061	273,060	25,720	26,513	57,064	163,763
Provision ..............................	40,219	40,219	2,777	3,461 0	18,234 0	15,746
	357,010	357,009	72,227	29,974	75,298	179,509

Market risk

Market risk emerges from changes in market prices, such as foreign exchange rates, interest rates, carbon emission quota

prices and fuel prices, as those changes will affect the Group's income or the value of its holdings of financial instruments.

The objective of market risk management is to manage and control market risk exposures within acceptable parameters,

while optimizing the return.

Interest rate risk

The Group’s financial instruments subject to variable interest rates consist solely of cash deposits. As the Group has no debt,

interest rate risk is limited to fluctuations in deposit interest rates. The Group does not currently hedge this risk, as the

impact is considered immaterial.

Fuel price risk

The Group is exposed to fuel price risk due to purchase of fuel. The Group uses forward contract to hedge a part of jet fuel

purchases. At year end 2024 the fair value for those contracts was negative in the amount of USD 1.1 million (2023; USD 0.3

million)

________________________________________________________________________________________________

Consolidated Financial Statements of Fly Play hf. 2024

All amounts are in USD thousands

Notes, contd.:

28.

Financial risk management, contd.:

Change in fuel prices by 10% on average during the year 2024 would have resulted in increase (decrease) on net income by

USD 8.7 million. (2023: 8.9 million)

Carbon risk

Emissions permits (ETS credits) are mainly purchased using spot and forward contracts, and the carbon exposure is subject

to the same risk management as jet fuel.

Change in ETS credit price by 10% during the year 2024 would have resulted in increase (decrease) on net income by USD 1.1

million. (2023: USD 1.1 million)

Currency risk

The Group is exposed to currency risk on sales, purchases, cash and cash equivalents and lease liabilities that are

denominated in a currency other than the respective functional currency of the Group. The currency exposure is mostly in

EUR, ISK and GBP. The Group's salaries and related expenses, representing around 19% of the Group's total operating

expenses, are denominated in ISK. Sales in ISK constitute 32.6% of total sales, EUR 29.2%, USD 27.7% and other currencies

10.5%.

The Group's liquid exposure to currency risk is as follows:

				Other
2024	ISK	EUR	GBP	currencies
Cash and cash equivalents ....................................................................	1,852	5,570	1,055	2,159
Trade and other receivables .................................................................	1,407	8,451	1,000	1,304
Restricted cash ..........................................................................................	834	192	0	0
Trade and other payables ......................................................................	( 16,997)	( 22,116)	( 2,021)	( 2,830)
Lease liabilities ...........................................................................................	( 674)	( 274)	0	0
Net currency exposure ...........................................................................	( 13,577)	( 8,178)	34	633

Other

2023	ISK	EUR	GBP	currencies
Trade and other receivables .................................................................	8,247	8,533	1,358	2,015
Cash and cash equivalents ....................................................................	2,507	492	748	492
Restricted cash ..........................................................................................	782	250	0	0
Trade and other payables ......................................................................	( 11,378)	( 4,202)	( 962)	( 1,496)
Lease liabilities ...........................................................................................	( 1,061)	0	0	0
Net currency exposure ...........................................................................	( 904)	5,073	1,144	1,011

Currency risk

The following exchange rates of USD applied during the year:

	Average rate		Year-end spot rate
	2024	2023	2024	2023
ISK ...................................................................................................................	0.0072	0.0072	0.0072	0.0073
EUR .................................................................................................................	1.08	1.08	1.04	1.11
GBP .................................................................................................................	1.27	1.24	1.25	1.27

Sensitivity analysis

A 10% strengthening of the USD against the following currencies at 31 December 2024 would have increased (decreased) pre-

tax profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates,

remain constant. This analysis is performed on the same basis as for 2023.

	Profit (loss)
	2024	2023
ISK .....................................................................................................................................................................................	1,358	90
EUR ...................................................................................................................................................................................	818	( 507)
GBP ..................................................................................................................................................................................	( 3)	( 114)
Other currencies .........................................................................................................................................................	( 63)	( 101)

________________________________________________________________________________________________

Consolidated Financial Statements of Fly Play hf. 2024

All amounts are in USD thousands

Notes, contd.:

28.

Financial risk management, contd.:

A 10% weakening of the USD against the above currencies would have had the equal but opposite effect on the above

currencies to the amounts shown above, on the basis that all other variables remain constant. This analysis is performed on

the same basis as for 2023.

Classification and fair value of financial assets and liabilities

Financial assets and liabilities are classified as follows:

	Amortized	Fair value	Carrying
2024	cost	through P/L	amount
Cash and cash equivalents .....................................................................................................	23,604	0	23,604
Trade receivables .......................................................................................................................	21,520	0	21,520
Aircraft deposits & security instalments ..........................................................................	11,452	0	11,452
Restricted cash ...........................................................................................................................	9,275	0	9,275
Other receivables .......................................................................................................................	3,097	195	3,292
Total assets ..................................................................................................................................	68,948	195	69,143
Trade payables ............................................................................................................................	54,723	1,063	55,786
Total liabilities .............................................................................................................................	54,723	1,063	55,786

Classification and fair value of financial assets and liabilities

	Amortized	Fair value	Carrying
2023	cost	through P/L	amount
Trade receivables .......................................................................................................................	31,532	0	31,532
Cash and cash equivalents .....................................................................................................	21,606	0	21,606
Aircraft deposits & security instalments ..........................................................................	13,209	0	13,209
Restricted cash ...........................................................................................................................	9,275	0	9,275
Other receivables .......................................................................................................................	1,460	0	1,460
Total assets ..................................................................................................................................	77,082	0	77,082
Trade payables ............................................................................................................................	43,730	0	43,730
Total liabilities .............................................................................................................................	43,730	0	43,730

Fair value

Fair value information for financial assets and liabilities not measured at fair value is not included as the carrying amount is

considered a reasonable approximation of fair value.

29.

Related parties

Definition of related parties

The Board of Directors, managers and close family members and companies in which they own majority of the shares are

considered to be related parties.

Transactions with related parties are on an arms length basis.

Transactions with management and key personnel

Salaries and benefits of management for their service to Group and the number of shares in ISK directly or indirectly in the

Group held by management are specified below:

		Salariesandbenefits			sharesinISK
	Current Year	Prior Year	Change (%)	Current Year	Prior Year	Change (%)
CEO	432	375	15%	93,596	6,250	1398%
Other KMP (Total)	1,271	1,797	-29%	-	9,503	-100%
Board Members	203	199	2%	36,310	129,906	-72%
Total .................................	1,906	2,371	-20%	129,906	145,659	-11%
Termination Payments	950	99	864%
Total with termination	2,856	2,469

Two of key management members have open stock option contracts at year end 2024.

________________________________________________________________________________________________

Consolidated Financial Statements of Fly Play hf. 2024

All amounts are in USD thousands

Notes, contd.:

30.

Events after the reporting period

No events have arisen after the reporting period of these Consolidated Financial Statements that require

amendments or additional disclosures in the Consolidated Financial Statements for the period ended 31

December 2024.

31.

Other matters

The Financial Supervisory Authority (FSA) notified PLAY of a potential breach of Act 60/2021 on Actions against

Market Abuse. PLAY is in dialogue with the FSA but the outcome remains uncertain.

32.

Significant accounting policies

The Group has consistently applied the following accounting policies to all periods presented in these

Consolidated Financial Statements.

Currency exchange

Foreign currency transactions

Transactions in currencies other than functional currencies (foreign currencies) are translated to the respective

functional currencies of the Group at exchange rates at the dates of the transactions. Monetary assets and

liabilities denominated in currencies at the reporting date are translated to the functional currency at the

exchange rate at that date. Foreign currency differences are generally recognized in profit or loss.

Foreign operations

In the Group's consolidated financial statements, the assets and liabilities of Group entities with a functional

currency other than the USD are translated into USD at reporting date. Income and expenses are translated into

USD at the average rate over the reporting period. Exchange differences recognised on translation are charged

or credited to other comprehensive income and recognised in the currency translation reserve in equity. On

disposal of a foreign operation, the related cumulative translation differences recognised in equity are

reclassified to profit or loss and are recognised as part of the gain or loss on disposal.

Revenue

Flight operations

Revenues from passenger flights are recognized in the income statement when the relevant flight has been

flown. Sold gift certificates not used within twelve to forty eight months from the month of sale are recognized

as revenue.

Other operating revenue

Revenue is recognized in profit or loss when the service has been provided or sale completed by delivery of

products.

Employee benefits

Share-based payment arrangements

Equity

‑

settled share

‑

based payments to employees are measured at the fair value of the equity instruments at

grant date. The grant date fair value of equity

‑

settled share

‑

based payment awards granted to employees is

recognized as an employee expense, with a corresponding increase in equity, over the period that the

employees become unconditionally entitled to the awards. The amount recognized as an expense is adjusted to

reflect the number of awards for which the related service and non‑market performance conditions are

expected to be met, such that the amount ultimately recognized as an expense is based on the number of

awards that meet the related service and non

‑

market performance conditions at the vesting date.

Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions

into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for

contributions to defined contribution pension plans are recognized as an employee benefit expense in profit or

loss in the periods during which services are rendered by employees.

________________________________________________________________________________________________

Consolidated Financial Statements of Fly Play hf. 2024

All amounts are in USD thousands

Notes, contd.:

32.

Significant accounting policies, contd.:

Finance income and finance cost

Finance income comprises interest income on funds invested, dividend income and foreign currency gains.

Interest income is recognized as it accrues in profit or loss, using the effective interest method.

Finance costs comprise interest expense on unwinding of the discount on provisions, foreign currency losses,

transaction fees, impairment losses recognized on financial assets, that are recognized in profit or loss and

impairment of other financial assets and loans and receivables.

Foreign currency gains and losses are reported on a net basis as either finance income or finance cost

depending on whether currency movements are in a net gain or net loss position.

Income tax

Income tax expense comprises current and deferred tax. It is recognized in profit or loss except to the extent

that it relates to items recognized directly in equity or in other comprehensive income.

Current tax is expected tax payable on the taxable income for the period, using tax rates enacted at the

reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and

liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured

at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates

enacted at the reporting date. Deferred tax assets and liabilities are offset if there is legal authority to recover

tax payable against tax assets and those belonging to the same tax authority.

The extent to which deferred tax assets can be recognised is based on an assessment of the probability that

future taxable income will be available against which the deductible temporary differences and tax loss carry-

forwards can be utilised.

Inventories

Goods for resale and supplies are measured at the lower of cost and net realizable value. The cost of inventories

is based on first-in first-out principle and includes expenditure incurred in acquiring the inventories and

bringing them to their existing location and condition. Net realizable value is the estimated selling price in the

ordinary course of business, less the estimated costs of completion and selling expenses.

Intangible assets

Recognition and measurement

Intangible assets are measured at cost less accumulated amortization and accumulated impairment losses.

Intangible assets are only capitalized if it is probable that future economic benefits associated with the asset

will be generated and the cost can be measured reliably.

Subsequent expenditures

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the

specific asset to which it relates. All other expenditure is recognized in profit or loss as incurred.

Amortization

Intangible assets are divided into long-term costs and software. Long term cost mainly consists of the

acquisition cost of the operation, operating license and brand. The estimated useful lives for the current and

comparative years are as follows:

Long-term cost .................................................................................................................................................................

5-10 years

Software ..............................................................................................................................................................................

3-5 years

________________________________________________________________________________________________

Consolidated Financial Statements of Fly Play hf. 2024

All amounts are in USD thousands

Notes, contd.:

32.

Significant accounting policies, contd.:

Operating assets

Recognition and measurement

Items of operating assets are measured at cost less accumulated depreciation and accumulated impairment

losses.

Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-

constructed assets includes the cost of materials, direct labour and any other costs directly attributable to

bringing the assets to a working condition for their intended use.

When parts of an item of operating assets have different useful lives, they are accounted for as separate items

(major components) of operating assets.

Any gain and loss on disposal of an item of operating assets (calculated as the difference between the net

proceeds from disposal and the carrying amount of the item) is recognized in profit or loss.

Aircraft- and flight equipment

Aircraft and flight equipment are measured at cost less accumulated depreciation and accumulated

impairment losses.

Subsequent expenditures

Subsequent expenditure is capitalized only when it is probable that the future economic benefits associated

with the expenditure will flow to the Group. Ongoing repairs and maintenance is expensed as incurred.

Depreciation

Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets

are assessed and if a component has a useful life that is different from the remainder of that asset, that

component is depreciated separately.

Items of operating assets are depreciated on a straight-line basis in profit or loss over the estimated useful lives

of each component. In the case of aircraft engines, the depreciation is calculated based on flown hours.

Operating assets are depreciated from the date they are installed and ready for use or in the case of assets

which the Group builds itself, from the date that the asset is complete and ready for use.

The estimated useful lives for the current and comparative periods are as follows:

Aircraft- and flight equipment ....................................................................................................................................

5-10 years

Other property and equipment ..................................................................................................................................

3-5 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if

appropriate.

________________________________________________________________________________________________

Consolidated Financial Statements of Fly Play hf. 2024

All amounts are in USD thousands

Notes, contd.:

32.

Significant accounting policies, contd.:

Financial instruments

Non-derivative financial assets

The Group initially recognizes loans and receivables and deposits on the date that they are originated. All other

financial assets, including assets designated at fair value through profit or loss, are recognized initially on the

trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument.

The Group derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or

it transfers the rights to receive the contractual cash flows in a transaction in which substantially all the risks

and rewards of ownership of the financial asset are transferred. Any interest in such derecognized financial

assets that is created or retained by the Group is recognized as a separate asset or liability.

Financial assets and liabilities are offset and the net amount presented in the statement of financial position

when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net

basis or to realize the asset and settle the liability simultaneously.

Financial assets at amortized cost

Financial assets at amortized cost are financial assets with fixed or determinable payments that are not quoted

in an active market. Such assets are recognized initially at fair value plus any directly attributable transaction

costs. Subsequent to initial recognition, financial assets at amortized cost are measured at amortized cost using

the effective interest method, less any impairment losses.

Financial assets at amortized cost comprise cash and cash equivalents, trade and other receivables and long-

term receivables.

Cash and cash equivalents comprise cash balances and marketable securities with original maturities of three

months or less.

Non-derivative financial liabilities

The Group initially recognizes debt securities issued on the date that they are originated. All other financial

liabilities including liabilities designated at fair value through profit or loss are recognized initially on the trade

date, which is the date that the Group becomes a party to the contractual provisions of the instrument.

The Group derecognizes a financial liability when its contractual obligations are discharged, cancelled or expire.

Financial assets and liabilities are offset and the net amount presented in the statement of financial position

when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net

basis or to realize the asset and settle the liability simultaneously.

The Group classifies non-derivative financial liabilities into the other financial liabilities category. Such financial

liabilities are recognized initially at fair value less any directly attributable transaction costs. Subsequent to

initial recognition, these financial liabilities are measured at amortized cost using the effective interest method.

Other financial liabilities comprise loans and borrowings and trade and other payables.

Derivative financial instruments

Derivatives are recognized initially at fair value; attributable transaction costs are recognized in profit or loss as

incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are

recognized in profit or loss.

________________________________________________________________________________________________

Consolidated Financial Statements of Fly Play hf. 2024

All amounts are in USD thousands

Notes, contd.:

32.

Significant accounting policies, contd.:

Hedge accounting

The Group applies hedge accounting for contracts that it enters into to hedge the cash flow of the Group

related to forecasted future purchases and for which a hedging relationship has been determined for. Profit or

loss of a derivative that has been determined as a hedging derivative is recognized as an increase or decrease in

fuel purchases when the contract is settled. Unrealized profit or loss of a derivative which has been determined

to be an effective hedge is recognized in other comprehensive income in accordance with hedge accounting for

cash flow hedges taken into account tax effects.

If the hedging derivative expires or is sold, terminated or exercised, or the hedge no longer meets the criteria for

application of hedge accounting, or the hedge designation is revoked, then hedge accounting is discontinued

prospectively.

Share capital

Incremental costs directly attributable to the issue of ordinary shares are recognized as a deduction from

equity, net of any tax effects.

Impairment

Non-derivative financial assets

A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine

whether there is objective evidence that it is impaired. A financial asset is impaired if there is objective

evidence of impairment as a result of one or more events having occurred after the initial recognition of the

asset, and that loss events had an impact on the estimated future cash flows of that asset that can be

estimated reliably.

In assessing collective impairment of individual classes of financial assets the Group uses historical trends of

the probability of default, timing of recoveries and the amount of loss incurred, adjusted for management’s

judgment as to whether current economic and credit conditions are such that the actual losses are likely to be

greater or less than suggested by historical trends. In addition, for an investment in an equity security, a

significant or prolonged decline in its fair value below its cost is objective evidence of impairment.

Non-financial assets

The carrying amounts of the Group’s non-financial assets, other than inventories and deferred tax assets, are

reviewed at each reporting date to determine whether there is any indication of impairment. If any such

indication exists, then the asset’s recoverable amount is estimated. An impairment loss is recognized if the

carrying amount of an asset or cash-generating unit (CGU) exceeds its recoverable amount.

For impairment testing, assets are Grouped together into the smallest Group of assets that generates cash

inflows from continuing use that are largely independent of the cash inflows of other CGUs.

The recoverable amount of an asset of CGU is the greater of its value in use and its fair value less cost to sell.

Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax

discount rate that reflects current market assessments of the time value of money and the risks specific to the

assets or CGU.

Impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying

amount that would have been determined, net of depreciation or amortization, if no impairment loss had been

recognized.

________________________________________________________________________________________________

Consolidated Financial Statements of Fly Play hf. 2024

All amounts are in USD thousands

Notes, contd.:

32.

Significant accounting policies, contd.:

Provisions

A provision is recognized if, as a result of a past event, the Group has a present legal or constructive obligation

that can be estimated reliably and it is probable that an outflow of economic benefits will be required to settle

the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that

reflects current market assessments of the time value of money and the risks specific to the liability.

Aircraft maintenance provisions

For aircraft held under lease agreements, the Group is contractually committed to either return the aircraft in a

certain condition or to compensate the lessor based on the actual condition of the aircraft and its major

components upon return. If the condition defined in the lease contract can only be met by performing

maintenance, then provision is made for the minimum unavoidable costs of the future maintenance obligation

at the time when such obligation becomes certain. This is when the respective aircraft component no longer

meets the lease re-delivery conditions. The provision is used through the completion of a maintenance event

such that the component again meets the re-delivery conditions. If it is probable that on returning the aircraft

compensation will be payable to the lessor, because performing maintenance is not or is no longer planned,

then the Group accrues for such obligation in line with the compensation rates defined in the lease contract

and recognises the respective expense within aviation expenses in the Consolidated Statement of Profit or Loss

and and other comprehensive income.

Leases

At inception of a contract, the Group assesses whether a contract is, or contains a lease. A contract is, or

contains a lease if the contract conveys the right of control the use of identified asset for a period of time in

exchange for consideration. To assess whether a contract conveys the right to control the use of an identified

asset, the Group uses the definition of lease in IFRS 16.

As a lessee

The Group recognizes a right

‑

use asset and a lease liability at the lease commencement date. The

right

‑

use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted

for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an

estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on

which it is located, less any lease incentives received.

Right of use assets

The right

‑

use asset is subsequently depreciated using the straight

‑

line method from the commencement

date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by

the end of the lease term or the cost of the right‑of‑use asset reflects that the Group will exercise a purchase

option. In that case the right‑of‑use asset will be depreciated over the useful life of the underlying asset, which

is determined on the same basis as those of property and equipment. In addition, the right‑of‑use asset is

periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the

commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily

determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate

as the discount rate.

The Group determines its incremental borrowing rate by obtaining interest rates from various external financing

sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased. Lease

payments included in the measurement of the lease liability comprise the following: fixed payments, including

in‑substance fixed payments, variable lease payments that depend on an index or a rate, initially measured

using the index or rate as at the commencement date, amounts expected to be payable under a residual value

guarantee and the exercise price under a purchase option that the Group is reasonably certain to exercise, lease

payments in an optional renewal period if the Group is reasonably certain to exercise an extension option, and

penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.

________________________________________________________________________________________________

Consolidated Financial Statements of Fly Play hf. 2024

All amounts are in USD thousands

Notes, contd.:

32.

Significant accounting policies, contd.:

Leases

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when

there is a change in future lease payments arising from a change in an index or rate, if there is a change in the

Group’s estimate of the amount expected to be payable under a residual value guarantee, if the Group changes

its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised

in‑substance fixed lease payment. When the lease liability is remeasured in this way, a corresponding

adjustment is made to the carrying amount of the right‑of‑use asset, or is recorded in profit or loss if the

carrying amount of the right‑of‑use asset has been reduced to zero. The Group presents right‑of‑use assets that

do not meet the definition of investment property in ‘property, plant and equipment’ and lease liabilities in

‘loans and borrowings’ in the statement of financial position.

Deferred income

Sold unused tickets and other prepayments are presented as deferred income in the statement of financial

position.

Fair value measurement

Fair value 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 in the principal or, in its absence, the most

advantageous market to which the Group has access at that date. The fair value of a liability reflects its

non

‑

performance risk.

A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both

financial and non

‑

financial assets and liabilities (see Note 4).

When one is available, the Group measures the fair value of an instrument using the quoted price in an active

market for that instrument. A market is regarded as ‘active’ if transactions for the asset or liability take place

with sufficient frequency and volume to provide pricing information on an ongoing basis.

If there is no quoted price in an active market, then the Group uses valuation techniques that maximize the use

of relevant observable inputs and minimize the use of unobservable inputs. The chosen valuation technique

incorporates all of the factors that market participants would take into account in pricing a transaction.

If an asset or a liability measured at fair value has a bid price and an ask price, then the Group measures assets

and long positions at a bid price and liabilities and short positions at an ask price.

The best evidence of the fair value of a financial instrument on initial recognition is normally the transaction

price – i.e. the fair value of the consideration given or received. If the Group determines that the fair value on

initial recognition differs from the transaction price and the fair value is evidenced neither by a quoted price in

an active market for an identical asset or liability nor based on a valuation technique for which any

unobservable inputs are judged to be insignificant in relation to the measurement, then the financial instrument

is initially measured at fair value, adjusted to defer the difference between the fair value on initial recognition

and the transaction price.

Subsequently, that difference is recognized in profit or loss on an appropriate basis over the life of the

instrument but no later than when the valuation is wholly supported by observable market data or the

transaction is closed out.

________________________________________________________________________________________________

Consolidated Financial Statements of Fly Play hf. 2024

All amounts are in USD thousands

Notes, contd.:

32.

Significant accounting policies, contd.:

Subsidiaries

Basis of consolidation

The Group's financial statements consolidate those of the parent Company and its subsidiary as of 31

December 2024. The subsidiary has a reporting date of 31 December.

Subsidiaries

Subsidiaries are entities controlled by the Group. The Group "controls" and entity when it is exposed to, or has

rights to, variable returns from its involvement with the entity and has the ability to affect those returns through

its power over the entity. The financial statements of the subsidiaries are included in the consolidated financial

statements from the date on which control commences until the date on which control ceases.

Transactions eliminated on consoldiation

Intra-Group balances and transactions, and any unrealised income and expenses (except for foreign currency

transaction gains or losses) arising from intra-Group transactions, are eliminated. Unrealised losses are also

eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting

policies of the subsidiary have been changed where necessary to ensure consistency with the policies adopted

by the Group.

New accounting standards issued but not yet effective

In the current year, the Group has applied a number of amendments to IFRSs issued by the International

Accounting Standards Board (IASB) that are mandatorily effective for an accounting period that begins on or

after 1 January 2024. Their adoption has not had any material impact on the disclosures or on the amounts

reported in these Consolidated Financial Statements.

The new and amended standards and interpretations that are issued, but not yet effective, up to the date of

issuance of the Group’s financial statements are disclosed below. The Group intends to adopt these new and

amended standards and interpretations, if applicable, when they become effective.

The following amended standards and interpretations are not expected to have a significant impact on the

Group´s consolidated financial statements:

* Amendments to IFRS 16: Lease Liability in a Sale and Leaseback

* Amendments to IAS 1: Classification of Liabilities as Current or Non-current

* Supplier Finance Arrangements - Amendments to IAS 7 and IFRS 7

________________________________________________________________________________________________

Consolidated Financial Statements of Fly Play hf. 2024

All amounts are in USD thousands

Financial year

Economic

activites (1)

Code (a) (2)

Absolute turover (3)

Proportion of Turnover,

year N (4)

Climate change mitigation

(5)

Climate change adaption

(6)

Water and marine

resources (7)

Circular economy (8)

Pollution (9)

Biodiversity and

ecosystems (10)

Climate change mitigation

(11)

Climate change adaption

(12)

Water and marine

resources (13)

Circular economy (14)

Pollution (15)

Biodiversity and

ecosystems (16)

Minimum safeguards (17)

Proportion of

Taxonomy

aligned (A.1.)

or eligible

(A.2.)

turnover,

year N-1 (18)

Category

(enabling

activity

or) (19)

Category

(transitional

activity) (20)

Transport revenue

M USD

Y; N;

N/EL; (b)(c)

Y; N;

N/EL; (b)(c)

Y; N;

N/EL; (b)(c)

Y; N;

N/EL; (b)(c)

Y; N;

N/EL; (b)(c)

Y; N;

N/EL; (b)(c)

Y/N Y/N YN/ Y/N Y/N Y/N Y/N % E T

Activity

% NA NA NA NA NA NA NA % NA NA

0 0% 0% 0% 0% 0% 0% 0% NA NA NA NA NA NA NA 0%

0 0% NA NA NA NA NA NA NA 0% T

EL; N/EL

(f)

EL; N/EL

(f)

EL; N/EL

(f)

EL; N/EL

(f)

EL; N/EL

(f)

EL; N/EL

(f)

Activity 1 0 0% NA NA NA NA NA NA 0%

0 0% 0% 0% 0% 0% 0% 0% 0%

0 0% 0% 0% 0% 0% 0% 0%

292.2

100%

Of which transitional

A.2 Taxonomy-Eligible but not environmental sustainable activities (not Taxonomy-aligned activities)

(g)

Turnover of Taxonomy-eligible

but not environmentally

sustainable activities (not

Taxonomy-aligned activities)

(A.2)

DNSH criteria ( Does Not Significantly Harm)(h)

A. TAXONOMY-ELIGIBLE ACTIVITIES

A.1 Environmental sustainable activities (Taxonomy-aligned)

Turnover of environmental

sustainable activities

(Taxonomy-aligned (A.1)

Of which enabling

Annex to the Financial Statements

B. TAXONOMY-NON-ELIGIBLE

ACTIVITIES

Turnover of Taxonomy-non-

eligible activities (B)

Total (A + B)

Proportion of turnover from products or services associated with Taxonomy-aligned economic activities - disclosure covering year 2024

A. Turnover of Taxonomy

eligible activities (A.1+A.2)

Year Substantial contribution criteria

Consolidated Financial Statements of Fly Play hf. 2024

Annex to the Financial Statements

Taxonomy-

aligned per

objective

Taxonomy-

eligible per

objective

CCM

CCA

WTR

PPC

BIO

(d) The same activity may align with only one or more environmental objectives for which it is eligible.

(e) The same activity may be eligible and not aligned with the relevant environmental objectives.

(f) EL - Taxonomy eligible activity for the relevant objective N/EL - Taxonomy non-eligible activity for the relevant objective

Annex to the Financial Statements, contd.:

Proportion of turnover/Total

turnover

(g) Activities shall be reported in Section A.2 of this template only if they are not aligning to any environmental objective for which they are eligible. Activities that align to at least one environmental objective shall be reported in Section A.1 of this

template.

(h) For an activity to be reported in Section A.1 all DNSH criteria and minimum safeguards shall be met. For activities listed under A2, columns (5) to (17) may be filled in on a voluntary basis by non-financial undertakings. Non-financial undertakings

may indicate the substantial contribution and DNSH criteria that they meet or do not meet in Section A.2 by using: (a) for substantial contribution - Y/N and N/EL codes instead of EL and N/EL and (b) for DNSH – Y/N codes

(a) The Code constitutes the abbreviation of the relevant objective to which the economic activity is eligible to make a substantial contribution, as well as the Section number of the activity in the relevant Annex covering the objective, i.e.: - Climate

(b) Y - Yes, Taxonomy-eligible and Taxonomy-aligned activity with the relevant environmental objective

N - No, Taxonomy-eligible but not Taxonomy-aligned activity with the relevant environmental objective

N/EL – not eligible, Taxonomy non-eligible activity for the relevant environmental objective

(c) Where an economic activity contributes substantially to multiple environmental objectives, non-financial undertakings shall indicate, in bold, the most relevant environmental objective for the purpose of computing the KPIs of financial

undertakings while avoiding double counting. In their respective KPIs, where the use of proceeds from the financing is not known, financial undertakings shall compute the financing of economic activities contributing to multiple environmental

objectives under the most relevant environmental objective that is reported in bold in this template by non-financial undertakings. An environmental objective may only be reported in bold once in one row to avoid double counting of economic

activities in the KPIs of financial undertakings. This shall not apply to the computation of Taxonomy-alignment of economic activities for financial products defined in point (12) of Article 2 of Regulation (EU) 2019/2088. Non-financial undertakings shall

also report the extent of eligibility and alignment per environmental objective, that includes alignment with each of environmental objectives for activities contributing substantially to several objectives, by using the template below:

Proportion of turnover from products or services associated with Taxonomy-aligned economic activities - disclosure covering year 2024, contd.:

Consolidated Financial Statements of Fly Play hf. 2024

Annex to the Financial Statements

Financial year

Economic

activites (1)

Code (a) (2)

Absolute CapEx (3)

Proportion of CapEx, year

N (4)

Climate change mitigation

(5)

Climate change adaption

(6)

Water and marine

resources (7)

Circular economy (8)

Pollution (9)

Biodiversity and

ecosystems (10)

Climate change mitigation

(11)

Climate change adaption

(12)

Water and marine

resources (13)

Circular economy (14)

Pollution (15)

Biodiversity and

ecosystems (16)

Minimum safeguards (17)

Proportion of

Taxonomy

aligned (A.1.)

or eligible

(A.2.) CapEx,

year N-1 (18)

Category

(enabling

activity

or) (19)

Category

(transitional

activity) (20)

Assets

M USD

Y; N;

N/EL; (b)(c)

Y; N;

N/EL; (b)(c)

Y; N;

N/EL; (b)(c)

Y; N;

N/EL; (b)(c)

Y; N;

N/EL; (b)(c)

Y; N;

N/EL; (b)(c)

Y/N Y/N YN/ Y/N Y/N Y/N Y/N % E T

Activity 1

0 0% NA NA NA NA NA NA NA 0% NA NA

0 0% 0% 0% 0% 0% 0% 0% NA NA NA NA NA NA NA 0%

0 0% NA NA NA NA NA NA NA 0% T

EL; N/EL

(f)

EL; N/EL

(f)

EL; N/EL

(f)

EL; N/EL

(f)

EL; N/EL

(f)

EL; N/EL

(f)

Activity 1 0 0% NA NA NA NA NA NA 0%

0 0% 0% 0% 0% 0% 0% 0% 0%

0 0% 0% 0% 0% 0% 0% 0%

31.9

100%

A. CapEx of Taxonomy eligible

activities (A.1+A.2)

B. TAXONOMY-NON-ELIGIBLE

ACTIVITIES

CapEx of Taxonomy-non-eligible

activities (B)

Total (A + B)

Annex to the Financial Statements, contd.:

CapEx of Taxonomy-eligible but

not environmentally

sustainable activities (not

Taxonomy-aligned activities)

(A.2)

Proportion of CapEx from products or services associated with Taxonomy-aligned economic activities - disclosure covering year 2024

Year Substantial contribution criteria DNSH criteria ( Does Not Significantly Harm)(h)

A. TAXONOMY-ELIGIBLE ACTIVITIES

A.1 Environmental sustainable activities (Taxonomy-aligned)

CapEx of environmental

sustainable activities

(Taxonomy-aligned (A.1)

Of which enabling

Of which transitional

A.2 Taxonomy-Eligible but not environmental sustainable activities (not Taxonomy-aligned activities)

(g)

Consolidated Financial Statements of Fly Play hf. 2024

Annex to the Financial Statements

Taxonomy-

aligned per

objective

Taxonomy-

eligible per

objective

CCM

CCA

WTR

PPC

BIO

(d) The same activity may align with only one or more environmental objectives for which it is eligible.

(e) The same activity may be eligible and not aligned with the relevant environmental objectives.

(f) EL - Taxonomy eligible activity for the relevant objective N/EL - Taxonomy non-eligible activity for the relevant objective

Change Mitigation: CCM - Climate Change Adaptation: CCA - Water and Marine Resources: WTR - Circular Economy: CE - Pollution Prevention and Control: PPC - Biodiversity and ecosystems: BIO For example, the Activity "Afforestation" would have

the Code: CCM 1.1

Where activities are eligible to make a substantial contribution to more than one objective, the codes for all objectives should be indicated.

For example, if the operator reports that the activity "Construction of new buildings" makes a substantial contribution to climate change mitigation and circular economy, the code would be: CCM 7.1. / CE 3.1.

The same codes should be used in Sections A.1 and A.2 of this template.

(b) Y - Yes, Taxonomy-eligible and Taxonomy-aligned activity with the relevant environmental objective

N - No, Taxonomy-eligible but not Taxonomy-aligned activity with the relevant environmental objective

N/EL – not eligible, Taxonomy non-eligible activity for the relevant environmental objective

Annex to the Financial Statements, contd.:

Proportion of CapEx from products or services associated with Taxonomy-aligned economic activities - disclosure covering year 2024, contd.:

Proportion of CapEx/Total CapEx

template.

Consolidated Financial Statements of Fly Play hf. 2024

Annex to the Financial Statements

Financial year

Economic

activites (1)

Code (a) (2)

Absolute OpEx (3)

Proportion of OpEx, year N

(4)

Climate change mitigation

(5)

Climate change adaption

(6)

Water and marine

resources (7)

Circular economy (8)

Pollution (9)

Biodiversity and

ecosystems (10)

Climate change mitigation

(11)

Climate change adaption

(12)

Water and marine

resources (13)

Circular economy (14)

Pollution (15)

Biodiversity and

ecosystems (16)

Minimum safeguards (17)

Proportion of

Taxonomy

aligned (A.1.)

or eligible

(A.2.) OpEx,

year N-1 (18)

Category

(enabling

activity

or) (19)

Category

(transitional

activity) (20)

OPEX

M USD

Y; N;

N/EL; (b)(c)

Y; N;

N/EL; (b)(c)

Y; N;

N/EL; (b)(c)

Y; N;

N/EL; (b)(c)

Y; N;

N/EL; (b)(c)

Y; N;

N/EL; (b)(c)

Y/N Y/N YN/ Y/N Y/N Y/N Y/N % E T

Activity 1

0 0% NA NA NA NA NA NA NA 0%

0 0% 0% 0% 0% 0% 0% 0% NA NA NA NA NA NA NA 0%

0 0% NA NA NA NA NA NA NA 0% T

EL; N/EL

(f)

EL; N/EL

(f)

EL; N/EL

(f)

EL; N/EL

(f)

EL; N/EL

(f)

EL; N/EL

(f)

Activity 1 (e) 0 % NA NA NA NA NA NA 0%

0 0% 0% 0% 0% 0% 0% 0% 0%

0 0% 0% 0% 0% 0% 0% 0%

282.3

100%

A. OpEx of Taxonomy eligible

activities (A.1+A.2)

B. TAXONOMY-NON-ELIGIBLE

ACTIVITIES

OpEx of Taxonomy-non-eligible

activities (B)

Total (A + B)

Annex to the Financial Statements, contd.:

OpEx of Taxonomy-eligible but

not environmentally

sustainable activities (not

Taxonomy-aligned activities)

(A.2)

Proportion of OpEx from products or services associated with Taxonomy-aligned economic activities - disclosure covering year 2024

Year Substantial contribution criteria DNSH criteria ( Does Not Significantly Harm)(h)

A. TAXONOMY-ELIGIBLE ACTIVITIES

A.1 Environmental sustainable activities (Taxonomy-aligned)

OpEx of environmental

sustainable activities

(Taxonomy-aligned (A.1)

Of which enabling

Of which transitional

A.2 Taxonomy-Eligible but not environmental sustainable activities (not Taxonomy-aligned activities)

(g)

Consolidated Financial Statements of Fly Play hf. 2024

Annex to the Financial Statements

Taxonomy-

aligned per

objective

Taxonomy-

eligible per

objective

CCM

CCA

WTR

PPC

BIO

(d) The same activity may align with only one or more environmental objectives for which it is eligible.

(e) The same activity may be eligible and not aligned with the relevant environmental objectives.

(f) EL - Taxonomy eligible activity for the relevant objective N/EL - Taxonomy non-eligible activity for the relevant objective

the Code: CCM 1.1

Where activities are eligible to make a substantial contribution to more than one objective, the codes for all objectives should be indicated.

The same codes should be used in Sections A.1 and A.2 of this template.

(b) Y - Yes, Taxonomy-eligible and Taxonomy-aligned activity with the relevant environmental objective

N - No, Taxonomy-eligible but not Taxonomy-aligned activity with the relevant environmental objective

N/EL – not eligible, Taxonomy non-eligible activity for the relevant environmental objective

Annex to the Financial Statements, contd.:

Proportion of OpEx from products or services associated with Taxonomy-aligned economic activities - disclosure covering year 2024, contd.:

Proportion of OpEx/Total OpEx

template.

Consolidated Financial Statements of Fly Play hf. 2024

Annex to the Financial Statements

Row

1 The undertaking carries out, funds or has exposures to research,

development, demonstration and deployment of innovative electricity

generation facilities that produce energy from nuclear processes with

minimal waste from the fuel cycle.

2 The undertaking carries out, funds or has exposures to construction and

safe operation of new nuclear installations to produce electricity or

process heat, including for the purposes of district heating or industrial

processes such as hydrogen production, as well as their safety upgrades,

using best available technologies.

3 The undertaking carries out, funds or has exposures to safe operation of

existing nuclear installations that produce electricity or process heat,

including for the purposes of district heating or industrial processes such

as hydrogen production from nuclear energy, as well as their safety

upgrades.

4 The undertaking carries out, funds or has exposures to construction or

operation of electricity generation facilities that produce electricity using

fossil gaseous fuels.

5 The undertaking carries out, funds or has exposures to construction,

refurbishment, and operation of combined heat/cool and power generation

facilities using fossil gaseous fuels.

6 The undertaking carries out, funds or has exposures to construction,

refurbishment and operation of heat generation facilities that produce

heat/cool using fossil gaseous fuels.

Annex to the Financial Statements, contd.:

Template 1 Nuclear and fossil gas related activities

Nuclear energy related activities

Fossil gas related activities

Disclosure referred to in Article 8(6) and (7)

The information referred to in Article 8(6) and (7) shall be presented as follows, for each applicable key

performance indicator (KPI)

Consolidated Financial Statements of Fly Play hf. 2024

Annex to the Financial Statements