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2015-08-14

Afarak Group: AFARAK GROUP PLC'S INTERIM REPORT FOR 1 APRIL - 30 JUNE 2015

07:00 London, 09:00 Helsinki, 14 August 2015 - Afarak Group Plc ("Afarak" or
"the Company") (LSE: AFRK, NASDAQ: AFAGR) Interim Report
AFARAK GROUP PLC'S INTERIM REPORT FOR 1 APRIL
-
30 JUNE 2015
Q2 HIGHLIGHTS (April - June 2015):
- The Group updates its outlook for 2015
- Revenue increased by 12.2% to EUR 53.1 (Q2/2014: 47.3) million
- Processed material sold increased by 33.4% to 30,556 (Q2/2014: 22,901)
tonnes
- EBITDA was EUR 7.6 (Q2/2014: 3.3) million and the EBITDA margin was 14.4%
(Q2/2014: 7.1%)
- EBIT was EUR 5.8 (Q2/2014: 1.4) million
- Profit for the period totalled EUR 5.7 (Q2/2014: 1.2) million
- Ferrochrome production increased by 27.5% to 27,856 (Q2/2014: 21,854) tonnes
- Tonnage mined increased by 54.4% to 122,081 (Q2/2014: 79,058) tonnes
- Cash flow from operations was EUR 5.0 (Q2/2014: -0.3) million and liquid
funds at 30 June were
EUR 10.5 (30 June 2014: 17.0) (31 March 2015:11.5) million

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| KEY FIGURES (EUR million) Q2/15 Q2/14 Change H1/15 H1/14 Change FY2014 |
| Revenue 53.1 47.3 12.2% 93.8 90.5 3.6% 172.7 |
| EBITDA 7.6 3.3 127.6% 12.3 6.4 93.2% 8.4 |
| EBITDA margin 14.4% 7.1% 13.1% 7.0% 4.9% |
| EBIT 5.8 1.4 8.8 2.4 1.7 |
| EBIT margin 11.0% 3.0% 9.3% 2.6% 1.0% |
| Earnings before taxes 5.4 1.7 8.1 3.1 0.5 |
| Earnings margin 10.2% 3.7% 8.6% 3.4% 0.3% |
| Profit from continuing operations 5.7 1.2 8.0 1.5 0.5 |
| Profit from discontinued operations 0 0 0 0 1.8 |
| Profit 5.7 1.2 8.0 1.5 2.2 |
| Earnings per share, basic, EUR 0.02 0.01 0.03 0.01 0.01 |
-------------------------------------------------------------------------------------------
Commenting on the second quarter results, Alistair Ruiters, CEO, said:
"Both the Speciality Alloys and FerroAlloys segment performed well during the
second quarter with sales volumes for standard grade material being higher
than last year. In the Speciality Alloys segment there was a slight
reduction in sales volume as a result of not compromising our prices for more
volume. Despite the lower volumes it still contributed well to the Group's
results and achieved better margins.

The higher sales volumes in the FerroAlloys segment led production levels of
processed material to be 27.5% higher than the same quarter last year. The
tonnage mined volumes also increased by 54.4% as a result of having all mines
operating at normal levels during this quarter. At the end of the second
quarter we commenced the bulk sampling at Vlakpoort mine, which is expected
to be a good contributor to the Group's results in the medium term when the
open pit mine is ramped up.

Following the slow start seen in the beginning of this year the Group's
revenue during the second quarter recovered the lost ground of the first
quarter with an increase of 12.2% higher than same period last year. We also
achieved better margins as a result of a stronger US dollar on conversion of
revenue. However our cost base was not significantly affected as it is
primarily denominated in Euro and South African Rand.

We aim to continue focusing on our core business and the production of special
grade material. At Mogale Alloys we have addressed the challenges in the
supply of medium carbon ferrochrome and we are seeing interest by new
customers for the material. We have also continued evaluating initiatives to
strengthen our position in the industry with our main focus remaining on
generating cash and increasing profits.

Finally, I would like to conclude by highlighting that we continued the
positive trend started this year with a significantly higher profit from
prior years. This result is a clear indication that our business, even when
the market is weak, performs well and manages to achieve sustainable
profits."

2015 OUTLOOK

The global growth in stainless steel production is expected to lead an increase in demand for chrome products in 2015. However, as occurred in 2014 where the chrome industry has not been able to increase chrome product prices it is unclear whether this upswing in prices will occur in 2015.

At Mogale Alloys, part of the FerroAlloys division, the Company started production of medium carbon ferrochrome during the fourth quarter of 2014, this is expected to make a positive contribution towards the Company's profit margins in 2015. In the Speciality Alloys division Afarak expects to continue to see an increase in raw materials costs. In addition, the strengthening of the US dollar is also expected to improve the financial performance of the Company as compared to 2014. In 2015, Afarak's revenue is expected to remain at the same levels of 2014 and EBIT is expected to significantly improve as compared to 2014.

Fluctuations of exchange rates between the Euro, the South African Rand, the Turkish Lira and the US Dollar can significantly impact the Company's financial performance.
The previous outlook, published in the full year results of 2014 on 16 February 2015, was:
The global growth in stainless steel production is expected to lead an
increase in demand for chrome products in 2015. However, as occurred in 2014
where the chrome industry has not been able to increase chrome product prices
it is unclear whether this upswing in prices will occur in 2015.
At Mogale Alloys, part of the FerroAlloys division, the Company started
production of medium carbon ferrochrome during the fourth quarter of 2014,
this is expected to make a positive contribution towards the Company's profit
margins in 2015. In the Speciality Alloys division Afarak expects to continue
to see an increase in raw materials costs. In addition, the strengthening of
the US dollar is also expected to improve the financial performance of the
Company as compared to 2014. In 2015, Afarak's revenue is expected to remain
at the same levels of 2014 and EBIT is expected to improve as compared to
2014.

Fluctuations of exchange rates between the Euro, the South African Rand, the
Turkish Lira and the US Dollar can significantly impact the Company's
financial performance.

Disclosure procedure

Afarak follows the disclosure procedure enabled by Disclosure obligation of
the issuer (7/2013) published by the Finnish Financial Supervision Authority,
and hereby publishes its Q2/2015 interim report enclosed to this stock
exchange release. The Interim Report is attached to this release and is also
available on the Company's website at www.afarakgroup.com.

Investor Conference Call

Management will host an investor conference call in English on 14 August 2015
at 14.00 Finnish time, 12.00 UK time. Please dial-in at least 10 minutes
beforehand, quoting the reference: 38313.

Finnish number +358 (0)800 919 339
UK number +44 (0) 844 762 0 762

AFARAK GROUP PLC
Alistair Ruiters
CEO
For additional information, please contact:

Afarak Group Plc

Alistair Ruiters, CEO, +358 50 372 1130,alistair.ruiters@afarak.com

Melvin Grima, Finance Director, +356 2122 1566,melvin.grima@afarak.com
Financial reports and other investor information are available on the
Company's website:www.afarak.com.

Afarak Group is a chrome mining and minerals producer focused on delivering
sustainable growth with a Speciality Alloys business in southern Europe and a
FerroAlloys business in South Africa. The Company is listed on NASDAQ
Helsinki (AFAGR) and the Main Market of the London Stock Exchange (AFRK).
www.afarak.com
Distribution:
NASDAQ Helsinki
London Stock Exchange
main media
www.afarak.com

AG Q2 2015 EN
http://hugin.info/143997/R/1945609/705478.pdf

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This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Afarak Group via Globenewswire

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