Magellan Aerospace Corporation (“Magellan” or the “Corporation”) released its financial results for the second quarter of 2025. All amounts are expressed in Canadian dollars unless otherwise indicated. The results are summarized as follows:

1. Overview
A summary of Magellan’s business and significant updates

Magellan is a diversified supplier of components to the aerospace industry. Through its wholly owned subsidiaries, controlled entity and joint venture, Magellan designs, engineers and manufactures aeroengine and aerostructure components for aerospace markets, including advanced products for defence and space markets, and complementary specialty products. The Corporation also supports the aftermarket through supply of spare parts as well as performing repair and overhaul services.

Magellan operates substantially all of its activities in one reportable segment, Aerospace, which is viewed as one segment by the chief operating decision-makers for the purpose of resource allocations, assessing performance and strategic planning. The Aerospace segment includes the design, development, manufacture, repair and overhaul, and sale of systems and components for defence and civil aviation.

In the first six months of 2025, 63.5% of revenues were derived from commercial markets while 36.5% of revenues related to defence markets.

Business Update
On April 28, 2025, Magellan announced that it signed an amendment to a long-term Revenue Sharing Agreement with GE Aerospace to include the production of major components for the F414-GE-400K aircraft engine for the Korean KF-21 aircraft program. Under the amended agreement, Magellan’s facilities in Mississauga, ON and Winnipeg MB, will deliver F414 engine frames to GE Aerospace in Lynn, Massachusetts over a 7-year period as the sole source provider for the KF-21 aircraft, the US Navy spares, and the Gripen F414-39E engine programs.

On April 30, 2025, Magellan announced that it signed agreements with Pratt & Whitney Canada, an RTX business. The contracts include a blend of contract extensions to legacy agreements and new manufacturing program awards. The complex machined components will be delivered for a period ending in 2034 from Magellan’s facility located in KIADB Industrial Area Tumakuru (Tumkur), Karnataka, India.

On June 11, 2025, Magellan renewed its normal course issuer bid (“2025 NCIB”) which allows the Corporation to purchase for cancellation up to 2,856,929 of its common shares during the 12-month period commencing June 13, 2025 and ending June 12, 2026, through facilities of the Toronto Stock Exchange (“TSX”) or other alternative Canadian trading systems.

On June 24, 2025, the Corporation extended its $75 million bank credit facility for an additional 2 years expiring on June 30, 2027. Refer to the “Liquidity and Capital Resources” section below for more information on the credit facility.

For additional information, please refer to the “Management’s Discussion and Analysis” section of the Corporation’s 2024 Annual Report available on www.sedarplus.ca .

2. Results of Operations
A discussion of Magellan’s operating results for the second quarter ended June 30, 2025

The Corporation reported revenue in the second quarter of 2025 of $249.8 million, a $6.9 million increase from the second quarter of 2024 revenue of $242.9 million. Gross profit and net income for the second quarter of 2025 were $33.3 million and $5.4 million, respectively, in comparison to gross profit of $26.6 million and net income of $7.4 million for the second quarter of 2024.

Revenue in Canada increased 14.9% in the second quarter of 2025 compared to the corresponding period in 2024, mainly due to higher casting product revenues as the prior year’s quarterly comparative casting revenue amount was negatively impacted by a work stoppage at the Corporation’s Canadian casting facility.

Revenue in the United States increased by 1.0% in the second quarter of 2025 compared to the second quarter of 2024, mainly due to higher engine shaft revenues and favourable foreign exchange impacts due to the strengthening of the United States dollar relative to the Canadian dollar, offset in part by lower revenues on single aisle aircraft programs. On a currency neutral basis, revenues in the United States decreased 0.1% in the second quarter of 2025 over the same period in 2024.

European revenue in the second quarter of 2025 decreased 8.4% compared to the corresponding period in 2024 primarily driven by lower revenues for single aisle and wide body aircraft parts and lower maintenance and repair operation revenues offset in part by favourable foreign exchange impacts due to the strengthening of the British Pound relative to the Canadian dollar. On a currency neutral basis, European revenues in the second quarter of 2025 decreased by 14.8% when compared to the same period in 2024.

Gross profit of $33.3 million for the second quarter of 2025 was $6.7 million higher than the $26.6 million gross profit for the second quarter of 2024, and gross profit as a percentage of revenues of 13.3% for the second quarter of 2025 increased from 11.0% recorded in the same period in 2024. The gross profit in the current quarter increased from the same quarter in the prior year as a result of volume increases and contract rehabilitations on certain programs in addition to favourable product mix, offset in part by increased costs on purchased materials and supplies. The prior year’s second quarter gross profit was also negatively impacted by a work stoppage that occurred at the Corporation’s Canadian casting facility.

Administrative and general expenses as a percentage of revenues was 7.1% for the second quarter of 2025, higher than the same period of 2024 percentage of revenues of 6.1%. Administrative and general expenses increased $2.8 million or 19.1% to $17.7 million in the second quarter of 2025 compared to $14.9 million in the second quarter of 2024 mainly due to higher salary and benefit costs, higher long-term bonus incentive costs and increased information technology spending. The second quarter of 2025 also included a one-time redundancy charge of $1.0 million.

Other for the second quarter of 2025 included a $6.3 million foreign exchange loss compared to a $0.2 million foreign exchange gain in the second quarter of the prior year. The movements in balances denominated in foreign currencies and the significant fluctuations of certain foreign exchange rates impact the net foreign exchange loss recorded in a quarter.

Total interest expense of $0.5 million in the second quarter of 2025 decreased by $0.6 million compared to the second quarter of 2024, mainly due to lower interest on cash, bank indebtedness and long-term debt as a result of higher interest earned on cash due to higher cash balances in the current quarter as compared to the prior year.

Income tax expense for the three months ended June 30, 2025 was $3.3 million, representing an effective income tax rate of 38.4% compared to 25.0% for the same period of 2024. The change in the effective tax rate and current and deferred income tax expenses year over year was primarily due to the change in mix of income and losses across the different jurisdictions in which the Corporation operates and the reversal of temporary differences.

3. Selected Quarterly Financial Information
A summary view of Magellan’s quarterly financial performance

Revenues and net income in the quarter were impacted by the movements of the Canadian dollar relative to the United States dollar and British pound, when the Corporation translates its foreign operations to Canadian dollars. Further, the movements in the United States dollar relative to the British pound impact the Corporation’s United States dollar exposures in its European operations. During the periods reported, the average quarterly exchange rate of the United States dollar relative to the Canadian dollar fluctuated between a high of 1.4350 in the first quarter of 2025 and a low of 1.3412 in the third quarter of 2023. The average quarterly exchange rate of the British pound relative to the Canadian dollar reached a high of 1.8485 in the second quarter of 2025 and hit a low of 1.6912 in the fourth quarter of 2023. The average quarterly exchange rate of the British pound relative to the United States dollar reached a high of 1.3357 in the second quarter of 2025 and hit a low of 1.2419 in the fourth quarter of 2023.

Revenue for the second quarter of 2025 of $249.8 million was higher than that in the second quarter of 2024. The average quarterly exchange rate of the United States dollar relative to the Canadian dollar in the second quarter of 2025 was 1.3841 versus 1.3684 in the same period of 2024. The average quarterly exchange rate of the British pound relative to the Canadian dollar moved from 1.7272 in the second quarter of 2024 to 1.8485 during the current quarter. The average quarterly exchange rate of the British pound relative to the United States dollar increased from 1.2418 in the fourth quarter of 2023 to 1.3357 in the current quarter. Had the foreign exchange rates remained at levels experienced in the second quarter of 2024, reported revenues in the second quarter of 2025 would have been lower by $3.9 million.

The Corporation’s results in fiscal 2023 were negatively impacted by the continued effects of the COVID-19 pandemic via reduced volumes, supply chain disruptions and the effect of inflation on materials, supplies, utilities and labour. These impacts, which continued into 2024 have stabilized and are having a less disruptive impact. Since the end of 2023, the Company has seen a general, but uneven, growth trend in quarterly revenues and net income.

4. Reconciliation of Net Income to EBITDA
A description and reconciliation of certain non-IFRS measures used by management

In addition to the primary measures of earnings and earnings per share (basic and diluted) in accordance with IFRS, the Corporation includes EBITDA (net income before interest, income taxes and depreciation and amortization) in this MD&A. The Corporation has provided this measure because it believes this information is used by certain investors to assess financial performance and that EBITDA is a useful supplemental measure as it provides an indication of the results generated by the Corporation’s principal business activities prior to consideration of how these activities are financed and how the results are taxed in the various jurisdictions. Each component of these measures is calculated in accordance with IFRS, but EBITDA is not a recognized measure under IFRS, and the Corporation’s method of calculation may not be comparable with that of other companies. Accordingly, EBITDA should not be used as an alternative to net income as determined in accordance with IFRS or as an alternative to cash provided by or used in operations.

EBITDA in the second quarter of 2025 decreased $0.8 million to $21.1 million in comparison to $21.9 million in the same quarter of 2024 mainly as a result of higher administrative and general expenses and foreign exchange losses offset in part by gross profit improvements.

5. Liquidity and Capital Resources
A discussion of Magellan’s cash flow, liquidity, credit facilities and other disclosures

The Corporation’s liquidity needs can be met through a variety of sources including cash on hand, cash provided by operations, short-term borrowings from its credit facility and accounts receivable securitization programs, and long-term debt and equity capacity. Principal uses of cash are for operational requirements, capital expenditures, common share repurchases and dividend payments. Based on current funds available and expected cash flow from operating activities, management believes that the Corporation has sufficient funds available to meet its liquidity requirements at any point in time. However, if cash from operating activities is lower than expected or capital projects exceed current estimates, or if the Corporation incurs major unanticipated expenses, it may be required to seek additional capital in the form of debt or equity or a combination of both.

For the three months ended June 30, 2025, the Corporation provided $25.8 million of cash from operating activities, compared to $14.5 million provided in the second quarter of 2024. Changes in non-cash working capital items provided cash of $9.7 million, $13.8 million more when compared to $4.1 million cash used in the prior year. The quarter over quarter working capital changes were largely attributable to decreases in accounts receivables from timing of customer payments, decreases in contract assets offset in part by decreases in accounts payable, accrued liabilities and provisions primarily driven by timing of supplier payments and decreases in contract liabilities primarily driven by timing of customer advance payments.

Investing activities used $8.3 million of cash for the second quarter of 2025 compared to $8.1 million cash used in the same quarter of the prior year, an increase of $0.2 million. The increase in cash usage was primarily due to higher spending on intangible and other assets offset in part by lower levels of investment in property, plant and equipment.

Financing activities provided $9.0 million of cash for the second quarter of 2025 compared to $23.5 million of cash provided in the same quarter of the prior year. The decrease was primarily driven by decreases in cash provided from bank indebtedness and borrowings subject to specific conditions, offset in part by increases in common share dividends.

On June 24, 2025, the Corporation extended its Bank Credit Facility Agreement (“Facility Agreement”) with a syndicate of lenders for an additional two-year period expiring on June 30, 2027. The Facility Agreement provides for a multi-currency global operating credit facility to be available to Magellan in a maximum aggregate amount of $75 million. Interest applicable to the facility is at adjusted term Canadian Overnight Repo Rate Average (“CORRA”) rates or adjusted term Secured Overnight Financing (“SOFR”) rates plus a spread of 1.00%. The Facility Agreement also includes a $75 million uncommitted accordion provision, which provides Magellan with the option to increase the size of the operating credit facility to $150 million. Extensions of the Facility Agreement are subject to mutual consent of the syndicate of lenders and the Corporation. A fixed and floating charge on accounts receivable, inventories and property, plant and equipment is pledged as collateral for the operating credit facility.

As at June 30, 2025, the Corporation had contractual commitments to purchase $29.5 million of capital assets.

Dividends
During the first and second quarters of 2025, the Corporation declared quarterly cash dividends of $0.025 and $0.05 per common share, respectively, and paid aggregate dividends of $4.3 million.

Subsequent to June 30, 2025, the Corporation declared dividends to holders of common shares in the amount of $0.05 per common share payable on September 29, 2025, to shareholders of record at the close of business on September 16, 2025. The Board of Directors of the Corporation continues to review its dividends on a quarterly basis to ensure that the dividend declared balances the return of capital to shareholders while maintaining adequate financial flexibility and funds available for growth initiatives.

Normal Course Issuer Bid
On June 11, 2025, the Corporation’s application to extend its normal course issuer bid (“June 2025 NCIB”) was approved. The June 2025 NCIB allows the Corporation to purchase up to 2,856,929 common shares, over a 12-month period, commencing June 13, 2025, and ending June 12, 2026.

During the six month period ended June 30, 2025, the Corporation purchased a total of 400 common shares for cancellation at a cost of $4 thousand. During the same period in the prior year, the Corporation purchased 87,242 common shares for cancellation at a cost of $0.7 million.

Outstanding Share Information
The authorized capital of the Corporation consists of an unlimited number of preference shares, issuable in series, and an unlimited number of common shares. As at August 7, 2025, 57,138,580 common shares were outstanding and no preference shares were outstanding.

6. Financial Instruments
A summary of Magellan’s financial instruments

Derivative Contracts
The Corporation operates internationally, which gives rise to a risk that its income, cash flows and shareholders’ equity may be adversely impacted by fluctuations in foreign exchange rates. Currency risk arises because the amount of the local currency receivable or payable for transactions denominated in foreign currencies may vary due to changes in exchange rates and because the non-Canadian dollar denominated financial statements of the Corporation’s subsidiaries may vary on consolidation into the reporting currency of Canadian dollars. The Corporation from time to time may use derivative financial instruments to help manage foreign exchange risk with the objective of reducing transaction exposures and the resulting volatility of the Corporation’s earnings. The Corporation does not trade in derivatives for speculative purposes. Under these contracts (forwards and collars), the Corporation is obligated to purchase specified amounts of currency – generally either the United States dollar (“USD”) or British Pound (“GBP”) - at predetermined dates and exchange rates if certain conditions are met. The counterparties to the foreign currency contracts are all major financial institutions with high credit ratings. A number of these contracts are designated as cash flow hedges.

As at June 30, 2025, the Corporation no longer has any foreign exchange collar contracts remaining and it holds foreign exchange forward contracts of USD $4.0 million and GBP 23.5 million with a derivative asset carrying value of less than $0.1 million included in Prepaid expenses and other on the interim condensed consolidated statement of financial position.

For the six months ended June 30, 2025, a gain of $1,599 net of taxes of $556, was recorded in other comprehensive income as mark-to-market adjustments for the foreign exchange collar and forward contracts discussed above.

Off-Balance Sheet Arrangements
The Corporation does not have any off-balance sheet arrangements that have or reasonably are likely to have a material effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. As a result, the Corporation is not exposed materially to any financing, liquidity, market or credit risk that could arise if it had engaged in these arrangements.

7. Related Party Transactions
A summary of Magellan’s transactions with related parties

For the three month period ended June 30, 2025, the Corporation had no material transactions with related parties as defined in IAS 24, Related Party Disclosures .

8, Risk Factors
A summary of risks and uncertainties facing Magellan

The Corporation manages a number of risks in each of its businesses in order to achieve an acceptable level of risk without hindering the ability to maximize returns. Management has procedures to help identify and manage significant operational and financial risks.

For more information in relation to the risks inherent in Magellan’s business, reference is made to the information under “Risk Factors” in the Corporation’s Management’s Discussion and Analysis for the year ended December 31, 2024 and to the information under “Risks Inherent in Magellan’s Business” in the Corporation’s Annual Information Form for the year ended December 31, 2024, both of which have been filed with SEDAR at www.sedarplus.ca . Those risk factors remain substantially unchanged, except as follows:

• Unpredictable Trade and Tariff Environment: Measures implemented by the current US Administration have created an unpredictable trade environment by imposing or expanding tariffs, and in some cases, modifying or suspending some of the tariffs recently imposed. Such tariffs, together with retaliatory measures, risk increasing our input costs, the prices paid by our customers for Magellan’s products and could have a potential long-term impact on travel/aircraft demand. Significant or sustained tariff costs which are not recovered from Magellan’s customers could have a material adverse effect on the Corporation’s profitability. The actual impact of the aforementioned tariffs is subject to a number of factors and uncertainties including the effective date and duration of such tariffs, changes in the amount, scope and nature of the tariffs in the future, any countermeasures that the Canadian government may take, and any mitigating actions that may become available. Although most of Magellan’s products in Canada comply with Canada-United States-Mexico Agreement (“CUSMA”) standards, allowing them to avoid tariffs that competitors from outside North America may face, there continues to be much uncertainty over the future direction of the US Administration’s ultimate decisions with respect to tariffs.

9. Outlook
The outlook for Magellan’s business in 2025

Supply chain recovery in the commercial aircraft manufacturing market shows some signs of improvement moving into the third quarter of 2025. The industry outlook is cautiously optimistic based on aircraft delivery projections from Airbus and Boeing for the second half of 2025. Global supply chain vulnerabilities tied to raw materials and skilled labor shortages remain a concern. The impact of erratic U.S. tariff policies further threatens supply chain stabilization through increased materials and production costs, and logistics delays.

The following data on commercial aircraft orders, delivery and completed aircraft is extracted from Forecast International’s Flight Plan (July 17, 2025 publication) and verified with Airbus and Boeing official Q2 delivery announcements.

May and June 2025 had strong new aircraft orders for both Airbus and Boeing, bringing year-to-date June 2025 gross aircraft orders to 494 and 668 respectively. Current order backlog is at a record high nearing 15,000 aircraft, indicating the urgency to ramp-up production to exceed pre-pandemic levels.

Airbus delivered 63 aircraft in June, marking their second highest monthly total for the year. Airbus is pushing to maintain this momentum as they work to close the gap on a significant year-to-date delivery shortfall. At the close of Q2, Airbus has delivered 306 aircraft against a year-end delivery target of 820 aircraft. In an interview with Reuters on June 11, 2025, Airbus’ Chief Commercial Officer, Christian Scherer, noted overall supply chain improvement. Scherer, however, conceded that supply of CFM engines is a current bottleneck resulting in 40 completed aircraft parked awaiting on engines, but anticipates that CFM engine delivery will improve in the second half of 2025, and that Airbus remains committed to delivering 820 aircraft this year. To achieve this, Airbus will need to deliver an average of 86 aircraft per month during the second half of the year.

Boeing did not commit to setting a delivery target for 2025. The manufacturer continues to deal with its own set of constraints including the FAA mandated production cap on its 737 MAX aircraft at a production rate of 38 aircraft per month. May 2025 was the first time Boeing achieved a 38 aircraft per month production rate on the 737 MAX since the cap was instituted 18 months prior. As of this report, the FAA has not moved on increasing the cap limit, insisting on more time to ensure improved manufacturing quality and safety are sustainable. There are currently 30 completed 737 MAX aircraft delayed pending type certification.

Boeing’s much improved Q2 performance, in light of current regulatory and supply chain constraints, signifies progress. The plane maker delivered 60 aircraft in June 2025 as compared to 45 aircraft in May 2025. Year-to-date June 2025 deliveries were 280 aircraft with industry analysts projecting total deliveries for the year to finish near 570 aircraft. If achieved, it would represent a 63% increase, up from the 350 aircraft delivered in 2024.

The defence market is positioned for sustained growth in 2025 and beyond. Fiscal 2024 global defence spending hit an all-time high exceeding USD $2.4 trillion, according to the International Institute for Strategic Studies (February 2025 Military Balance Blog). In response to rising threat perceptions and geopolitical tensions, global defence spending is expected to continue to grow in 2025 with recent defence budget increases across NATO member nations.

The Canadian Prime Minister, Mark Carney, announced on June 9, 2025, a firm commitment of over $9 billion in 2025-2026 funding to accelerate the achievement of the then NATO goal of 2% GDP for defence spending. Subsequent to this announcement, NATO member nations met in late June and agreed to a new defence spending goal of 5% GDP to be achieved by 2035. As reported by CBC News on June 23, 2025, Prime Minister Carney signed a strategic defence and security partnership with the European Union (“EU”). This agreement is expected to open the door for Canadian companies to participate in the $1.25-trillion ReArm Europe Plan.

The overall positive outlook for the commercial and defence aerospace markets is tempered by a common challenge. Sustainable growth in both markets relies on the relative health of the global supply chain and manufacturing capacity to meet this growing demand. As noted earlier, the 15,000 commercial aircraft orders backlog illustrates the market struggles with demand outpacing capacity. Issues with raw materials and skilled labor shortages apply equally to the defence sector, which is illustrated by the recent machinist strike at three Boeing defence plants.

Increased demand in the defence sector will heighten competition and further expose the weaknesses of struggling globally interconnected supply chains. Numerous industry studies highlight the importance of supply chain resilience and agility to a healthy global aerospace market. A KPMG International white paper on 2025 Emerging Aerospace Trends (published in June 2025), cites the significance of supply chain risk in this growing market. This risk is further compounded by growing geopolitical security and tariff policy concerns.

Additional Information
Additional information relating to Magellan Aerospace Corporation, including the Corporation’s annual information form, can be found on the SEDAR web site at www.sedarplus.ca .

Forward Looking Statements
This news release contains certain forward-looking statements that reflect the current views and/or expectations of the Corporation with respect to its performance, business and future events. Such statements are subject to a number of uncertainties and assumptions, which may cause actual results to be materially different from those expressed or implied. These forward looking statements can be identified by the words such as "anticipate", "continue", "estimate", "forecast", “expect”, "may", "project", "could", "plan", "intend", "should", "believe" and similar words suggesting future events or future performance. In particular there are forward looking statements contained under the heading "Overview" which outlines certain expectations for future operations. These statements assume the continuation of the current regulatory and legal environment; the continuation of trends for passenger airliner and defence production and are subject to the risks contained herein and outlined in our annual information form. The Corporation assumes no future obligation to update these forward-looking statements except as required by law.

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For additional information:

Phillip C. Underwood
President & Chief Executive Officer
T: (905) 677-1889
E: phil.underwood@magellan.aero

Elena M. Milantoni
Chief Financial Officer
T: (905) 677-1889
E: elena.milantoni@magellan.aero