Afarak Group Plc Afarak Group: 2016 Interim Results

 
TIDMAFAGR 
 
   07:00 London, 09:00 Helsinki, 16 August 2016 - Afarak Group Plc 
("Afarak" or "the Company") (LSE: AFRK, NASDAQ: AFAGR) Interim Report 
 
 
 
   AFARAK GROUP PLC'S INTERIM REPORT FOR 1 APRIL - 30 JUNE 2016 
 
 
 
   Q2 HIGHLIGHTS (April - June 2016): 
 
   - Board approved additional capital redemption of EUR0.01 per share 
 
   - Revenue decreased by 25.6% to EUR 39.5 (Q2/2015: 53.1) million as a 
result of extreme weakness in demand and prices for Afarak's products 
 
   - Processed material sold decreased by 11.2% to 28,214 (Q2/2015: 31,755) 
tonnes 
 
   - Despite the challenging external environment EBITDA remained positive 
at EUR 0.8 (Q2/2015: 7.6) million and the EBITDA margin was 2.0% 
(Q2/2015: 14.4%) 
 
   - EBIT was EUR -0.9 (Q2/2015: 5.8) million 
 
   - Profit for the period from continuing operations totalled EUR -1.0 
(Q2/2015: 5.7) million 
 
   - Ferrochrome production decreased by 3.8% to 26,786 (Q2/2015: 27,856) 
tonnes 
 
   - Tonnage mined decreased by 56.8% to 56,395 (Q2/2015: 130,417) tonnes 
 
   - Cash flow from operations was EUR -0.4 (Q2/2015: 5.0) million and 
liquid funds at 30 June were 
 
   EUR 13.2 (30 June 2015: 10.5) (31 March 2016: 21.7) million 
 
   - The Group reduced its debt by EUR 4,7 million due to its strong cash 
position notwithstanding the depressed markets 
 
   INTERIM DISTRIBUTION 
 
   The Board resolved on an additional capital redemption of [EUR 0.01] per 
share, using the authorization given by the AGM held on 11 May 2016. 
The payment will be made from the company's fund for invested 
unrestricted equity on16 September 2016. 
 
 
 
 
KEY FIGURES (EUR million)   Q2/16  Q2/15  Change  H1/16  H1/15  Change  FY2015 
Revenue                      39.5   53.1  -25.6%   80.3   93.8  -14.4%   187.7 
EBITDA                        0.8    7.6  -89.8%    4.1   12.3  -66.9%    17.2 
EBITDA margin                2.0%  14.4%           5.1%  13.1%            9.2% 
EBIT                         -0.9    5.8            0.8    8.8             9.9 
EBIT margin                 -2.2%  11.0%           1.0%   9.3%            5.3% 
Earnings before taxes        -1.3    5.4           -0.4    8.1             6.5 
Earnings margin             -3.2%  10.2%          -0.5%   8.6%            3.5% 
Profit from continuing 
 operations                  -1.0    5.7           -1.3    8.0             7.8 
Profit from discontinued 
 operations                     0      0            0.5      0             0.8 
Profit                       -1.0    5.7           -0.8    8.0             8.5 
Earnings per share, basic, 
 EUR                        -0.00   0.02          -0.00   0.03            0.03 
 
 
   Commenting on the second quarter results, Alistair Ruiters, CEO, said: 
 
   "The external environment in quarter two was one of the most challenging 
in recent years.  Selling prices continued to plummet and the South 
African rand continued its rally against the US dollar and the euro. 
These two factors have adversely impacted the industry at large with 
more firms going into business rescue. 
 
   Despite the difficult environment, Afarak still managed to achieve a 
positive EBITDA in the first half of the year. In the face of plummeting 
prices, we consciously stuck to our policy of not compromising our 
selling prices in favour of larger sales volumes and the downward price 
pressures hit our sales volumes particularly in the Speciality Alloy 
segment.  In addition, our mining volumes were much less since no 
open-cast mining happened at Mecklenburg. 
 
   Looking ahead, we are expecting our performance to improve in the coming 
months.  Improved benchmark prices for charge chrome will favour Afarak 
and our decision to switch one of the silicon manganese furnaces at our 
Mogale plant to charge chrome should reflect positively in our returns 
from the FerroAlloys segment.  We are also expecting increased business 
from the United States with respect to special grade ferrochrome. 
 
   Internally, we are very much focused on using this difficult period to 
evaluate our cost structures across our operations.  The Board and 
Management is actively promoting cost saving initiatives and assessing 
ways to streamline business processes with a view of strengthening our 
sustainability. 
 
   Our balance sheet position remains healthy.  Over the past year, Afarak 
has further reduced its debt levels and maintains a good cash position. 
 
 
   Afarak remains committed to its shareholders and we aim to continue 
creating value for all our stakeholders Looking ahead, market sentiment 
is positive and it is expected to improve in the coming months.  This 
improved economic outlook and Afarak's balance sheet position gives the 
Board sufficient comfort to issue the interim capital redemption that 
was agreed during our last Annual General Meeting. 
 
   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 Q2/2016 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.afarak.com. 
 
   Investor Conference Call 
 
   Management will host an investor conference call in English on 17 August 
2016 at 14.00 Finnish time, 12.00 UK time. Please dial-in at least 10 
minutes beforehand, quoting the reference: 38313. 
 
   Finnish number [phone] 
 
   UK number [phone] 
 
 
 
   AFARAK GROUP PLC 
 
   Alistair Ruiters 
 
   CEO 
 
 
 
   For additional information, please contact: 
 
 
 
   Afarak Group Plc 
 
   Alistair Ruiters, CEO, [phone], [e-mail] 
 
   Melvin Grima, Finance Director, [phone], [e-mail] 
 
   Jean Paul Fabri, PR & Communications Manager, [phone], 
[e-mail] 
 
   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). Distribution: 
NASDAQ Helsinki London Stock Exchange main media www.afarak.com 
   2016 INTERIM RESULTS: http://hugin.info/143997/R/2035379/758036.pdf 
 
   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#2035379 
 
 
  http://www.afarakgroup.com 
 

(END) Dow Jones Newswires

August 16, 2016 02:00 ET (06:00 GMT)

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