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2014-05-08

Afarak Group: AFARAK GROUP PLC'S INTERIM REPORT FOR 1 JANUARY - 31 MARCH 2014

07:00 London, 09:00 Helsinki, 8 May 2014 - Afarak Group Plc ("Afarak" or "the
Company") (LSE: AFRK, OMX: AFAGR) Interim Report
AFARAK GROUP PLC'S INTERIM REPORT FOR 1 JANUARY
-
31 MARCH 2014

Q1 HIGHLIGHTS (January-March 2014):

- Positive EBIT and profit for the first time since entering the mineral
business in 2008
- Revenue increased by 36.7% to EUR 43.2 (Q1/2013: 31.6) million
- Sales from processed products increased by 47.7% to 22,146 (Q1/2013: 14,993)
tonnes
- EBITDA was EUR 3.0 (Q1/2013: 4.2) million and the EBITDA margin was 7.0%
(Q1/2013: 13.2%)
- EBIT was EUR 0.9 (Q1/2013: -2.1) million
- Profit for the period totalled EUR 0.2 (Q1/2013: 0.0) million
- Production increased by 70.5% to 139,084 (Q1/2013: 81,551) tonnes
- Cash flow from operations was EUR 2.8 (Q1/2013: 8.1) million and liquid
funds at 31 March were
EUR 16.8 (31 March 2013: 17.5) (31 December 2013:13.8) million
- Outlook for 2014 remain unchanged

-----------------------------------------------------------
|KEY FIGURES (EUR million) Q1/14 Q1/13 Change FY2013 |
|Revenue 43.2 31.6 36.7% 135.5 |
|EBITDA 3.0 4.2 -28.0% 14.0 |
|EBITDA margin 7.0% 13.2% 10.4% |
|EBIT 0.9 -2.1 -8.0 |
|EBIT margin 2.1% -6.5% -5.9% |
|Earnings before taxes 1.2 -2.7 -11.2 |
|Earnings margin 2.7% -8.7% -8.2% |
|Profit 0.2 0.0 -4.4 |
|Earnings per share, basic, EUR 0.00 0.00 -0.02 |
-----------------------------------------------------------
Commenting on the first quarter results, Danko Koncar, CEO, said:

"The Group's revenue during the period was strong with a substantial increase
of 48% in sales volumes of processed material when compared to the same
quarter last year. Despite this increase we have experienced difficult market
conditions with lower prices and a weak US dollar impacting conversion of
revenue and results from operations.

Processing volumes improved in the first quarter when compared to the
equivalent period last year as a result of having both EWW and Mogale Alloys
in full operation during this period. Mining sales and production volumes
were also higher when compared to the same period last year due to the fact
that Mecklenburg was not yet in operation in the first quarter of 2013.

The ferrochrome market remains difficult to predict with some signs of
recovery during the period. In the longer term we believe that ferrochrome,
particularly the speciality and super alloys segment, will again be in high
demand. We continue evaluating different initiatives that could strengthen
our position and provide new growth opportunities. Our focus remains on
generating cash and increasing profits.

Finally, I'm pleased to announce that we have achieved positive EBIT and
profit for the first time from the mineral business since entering the
sector.

2014 OUTLOOK

The global economic outlook is showing signs of recovery with western
industrial nations issuing positive economic indicators. Demand for
commodities is also showing recovery with increase in demand for speciality
alloys in United States. The ferroalloy market is expected to continue the
positive trend of 2013 during which consumption reached record levels. To
date, however, pricing has not responded to the increased demand. The Group
continues to be prepared for significant price fluctuations and will continue
to adapt its production levels accordingly. At Mogale Alloys, part of the
FerroAlloys division, the Company expects to start production of medium
carbon ferrochrome during the third quarter of 2014, which is expected to
have a positive impact on our profit margins. In the Speciality Alloys
division we are expecting to see an increase in our raw materials cost due to
current market conditions. As a result the Group expects its financial
performance for the full year 2014 to marginally improve compared to 2013.

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 Q1/2014 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.
AFARAK GROUP PLC

Danko Koncar
CEO
For additional information, please contact:

Afarak Group Plc
Danko Koncar, CEO, +44 (0)20 7376 1175,danko.koncar@afarak.com
Investec Bank Plc

Jeremy Wrathall, +44 (0)20 7597 5970

Financial reports and other investor information are available on the
Company's website:www.afarakgroup.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 southern Africa. The Company is listed on NASDAQ OMX
Helsinki (AFAGR) and the Main Market of the London Stock Exchange (AFRK).
www.afarakgroup.com
Distribution:
NASDAQ OMX Helsinki
London Stock Exchange
main media
www.afarakgroup.com

Q1
http://hugin.info/143997/R/1783712/610941.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

HUG#1783712

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