Norse Atlantic ASA: Reports first profitable quarter, updates on financing, announces strategic review

Arendal, 31 October 2023. Norse Atlantic ASA (“Norse” or the “Company”) today releases its Q3 financial report, showing that the Company has delivered its first profitable quarter, more than doubling revenue from the previous quarter.

The Company saw record ticket prices and yields, and a continued increase in ancillary revenues. The quarter saw strong commercial and operational performance, with an average load factor of 83% and a 99.8% completion during the quarter, with not a single flight cancelled from late April through to early September. The Company continues to reduce unit costs, and remains the cost leader in the Transatlantic market, with a CASK in in the quarter of USD 3.63. The Company did however face some headwinds from increased fuel prices, and a weaker than expected cargo market.

Bjørn Tore Larsen, Norse CEO, said: “Norse Atlantic has come a long way since the initial flight in June 2022. After a short first summer season in 2022, we had our first full summer season in 2023, growing to a 10 aircraft operation while delivering a robust performance. We are proud to have delivered our first profitable quarter and we continue to be agile and adapt as a company to achieve our goal of becoming the leading low-cost long-haul airline of choice.”

Highlights of the Q3 financial results include:

• Activity and revenue doubled
  • Q3 revenue more than doubled from the previous quarter to USD 205 million
  • Number of passengers, ASK and RPK also more than doubled compared to Q2
  • 1,547 of 1,550 planned flights were completed, a completion rate of 99.8%
• Successful Low-cost business model, but challenged by fuel prices
  • Ramping up activity while keeping costs under control
  • CASK gradually decreasing – Norse showing the lowest CASK in the Transatlantic market
  • Higher fuel prices places pressure on profitability
• Record load factors and fares
  • Record high load factor of 83%
  • Record high fares during summer peak season
  • Seasonal softening from September
• Ancillary revenues continue to increase
  • Successful focus on ancillary revenues
  • Ancillary revenues increased to USD 131 per passenger
• Profitable summer
  • Q3 the first profitable quarter in the Company’s history
  • EBITDAR from USD 2 million in Q2 to USD 41 million in Q3
  • High working capital build-up of USD 32 million

The flexibility of the organization allows Norse to continue to optimize the network and adjust activity in the seasonally weaker winter market, seeking attractive ACMI (wet-lease) and charter opportunities, where inquiries are increasing. Norse will implement an enhanced strategic approach to revenue management, which will allow the Company to pursue and capture higher valuefares, supported by the increasing maturity of routes, the increased brand awareness, and longer selling windows. During Q4, the airline will launch an upgraded Norse Premium product, which will allow the Company to fully realize the potential of its leading Premium Product, and the Company continues to introduce initiatives to further grow ancillary revenue.

During the quarter, an adverse working capital movement led to a reduction of available liquidity compared to the previous quarter. In addition, the Company is in the process of concluding a negotiation with a key supplier, that will require a payment plan to be accelerated. As a consequence, the Company is exploring additional fundraising of up to USD 45 million to improve liquidity through the shoulder and winter season, until such time as the revenue generated from the seasonally stronger summer program bookings are collected. The Company has engaged with its leading shareholders, B T Larsen & Co Ltd and Scorpio Holdings Limited, who have both expressed strong support to participate in the fundraising, for at least their pro rata shareholding. The Company has engaged Pareto Securities AS and SpareBank 1 Markets AS to advise on and effect the fundraising. The timing, structure, and terms of any fundraising will be subject to, inter alia, prevailing market conditions and necessary corporate resolutions, and no assurance can be given that the Company will carry out such fundraising. More information on the potential fundraising will be published in due course.

The Company has recently been approached by and engaged in discussions with several industrial players, seeking to explore industrial opportunities with the Company. It is the Company’s clear impression from these discussions that the Company’s business, market position, and assets are perceived as attractive, and that the Company may be well positioned to capitalize on this through industrial or strategic actions. The Board of Directors of the Company has therefore decided to seek to engage advisers to explore and advise on strategic alternatives.

As a result of its significant shareholding and involvement with the Company, Scorpio Holding Limited has accepted an invite to be represented on the Company’s Board of Directors. The Company is enthusiastic to Scorpio Holding Limited’s continued and increased involvement and will welcome such representation on its Board of Directors. B T Larsen & Co Ltd has expressed its support for representation by Scorpio Holding Limited on the Board of Directors.

The Company will present its 3Q financial report to investors on Wednesday, 1 November at 10:00 am CET. The presentation will be held at the offices of Pareto Securities (11^th floor, Dronning Mauds Gate 3, 0250 Oslo, Norway)

The Q3 financial report and the Q3 presentation are attached.

For further information, please contact:

Investors: Anders Hall Jomaas, CFO, +47 400 42 918, [email protected]

Media: SVP Communications, Philip Allport, +44 797 6328 710, [email protected]

Norse Atlantic Airways is an airline that offers affordable fares on long-haul flights, primarily between Europe and the United States. The company was founded by CEO and major shareholder Bjørn Tore Larsen in March 2021. Norse has a fleet of 15 modern, fuel-efficient and more environmentally friendly Boeing 787 Dreamliners that serve destinations including New York, Los Angeles, Miami, Orlando, Boston, Washington, Jamaica, Barbados  , Oslo, London, Berlin, Rome and Paris. The company's first flight took off from Oslo to New York on June 14, 2022.

This information is considered to be inside information pursuant to the EU Market Abuse Regulation and is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act. This stock exchange announcement was published by Philip Allport, Senior Vice President Communications at Norse Atlantic ASA, on 31 October 2023 at 23.25 CET.