Afarak Group Plc Adverse Business Conditions Impact Performance

 
TIDMAFAGR 
 
 
   10:00 London, 12:00 Helsinki, May 17, 2019 - Afarak Group Plc ("Afarak" 
or "the Company") 
 
   ADVERSE BUSINESS CONDITIONS IMPACT PERFORMANCE 
 
 
 
 
                                                   Q1/19  Q1/18  2018 
Revenue                               EUR million   41.3   50.2  194.0 
EBITDA                                EUR million   -4.8   -0.7   -1.0 
EBIT                                  EUR million   -6.6   -2.4  -14.1 
Earnings before taxes                 EUR million   -7.2   -2.5  -18.5 
Profit from continuing operations     EUR million   -7.5   -1.9  -18.6 
Profit from discontinued operations   EUR million    0.0    0.0    0.0 
Profit                                EUR million   -7.5   -1.9  -18.6 
Earnings per share                            EUR  -0.03   0.01  -0.07 
EBITDA margin                                   %  -11.6   -1.4   -0.5 
EBIT margin                                     %  -16.1   -4.7   -7.3 
Earnings margin                                 %  -17.5   -5.0   -9.6 
Personnel at the end of the 
 period                                            1,052  1,015  1,061 
 
 
   HIGHLIGHTS IN THE FIRST QUARTER OF 2019 
 
 
   -- Weaker ferrochrome prices and lower sales volumes coupled by specific 
      segment conditions, led Afarak to register a weaker performance than a 
      year earlier; 
 
 
   -- Revenue for the quarter contracted by 17.7% to EUR 41.3 (Q1/2018: 50.2) 
      million on account of lower prices and sales volumes compared to a year 
      earlier; 
 
   -- Processed material sold decreased by 4.4% to 22,252 (Q1/2018: 23,284) 
      tonnes; 
 
   -- Tonnage mined decreased by 21.9% to 108,905 (Q1/2018: 139,478) tonnes; 
 
   -- EBITDA was EUR -4.8 (Q1/2018: -0.7) million and the EBITDA margin was 
      -11.6% (Q1/2018: -1.4%); 
 
   -- EBIT was EUR -6.6 (Q1/2018: -2.4) million and the EBIT margin was -16.1% 
      (Q1/2018:-4.7%); 
 
   -- Profit for the period from continuing operations totalled EUR -7.5 
      (Q1/2018: -1.9) million; 
 
   -- Cash flow from operations was EUR -4.1 (Q1/2018: 1.2) million; 
 
   -- Net interest-bearing debt after deducting liquid funds amounted to EUR 
      11.9 (31 March 2018: 3.3) (31 December 2018: 12.3) million; 
 
   -- Cash and cash equivalents at 31 March totalled EUR 10.5 (31 March 2018: 
      10.5) (31 December 2018: 12.1) million. 
 
 
   MARKET SENTIMENT FOR THE SECOND QUARTER 2019 
 
   The charge chrome benchmark price for quarter two rose by 7.1% to 
USD1.20 per pound. This increase is expected to improve results for 
quarter two, compared to the first quarter. Apart from improved prices, 
the Company is also expected to experience higher sales volumes 
throughout the second quarter. The acquisition of the joint venture 
partner's share  of Synergy Africa will positively impact results of the 
second quarter as a result of change in control. However, conditions in 
the FerroAlloys segment remain challenging. 
 
   CEO GUY KONSBRUCK 
 
   "The operational challenges in our South African operations seen in 
2018, persisted into the new year. With the second lowest benchmark 
price in the past nine quarters, sales volumes and revenues were 
impacted during the first three months of the year. 
 
   The specialty segment performed well, although market prices for low 
carbon ferrochrome have weakened and the sales volumes have contracted. 
The company has adapted the production output to the market demand in 
order to keep efficient inventory management in place. 
 
   The Executive Management Team together with the operational units are 
focusing their efforts on improving the performance in South Africa. 
Following the implementation of a turnaround strategy, positive results 
started being achieved in our South African mines towards the end of the 
first quarter. In addition, cash management was a key priority for the 
Company during the quarter. Despite the results, prudent working capital 
management have allowed the Company to keep cash flow stable. 
 
   The charge chrome benchmark price for quarter two rose by 7.1% to 
USD1.20 per pound. This increase is expected to improve results for 
quarter two, compared to the first quarter. Apart from improved prices, 
the Company is also expected to experience higher sales volumes 
throughout the second quarter. The acquisition of the rest of the joint 
venture Synergy Africa will have a positive one-time impact on the 
results of the second quarter. We must however emphasize that the 
business environment in South Africa, with the scarce availability and 
the high cost of energy will constitute a major obstacle to a good 
performance in our Mogale smelter. 
 
   Despite this tough environment the Company is focused on improving its 
operational and financial performance." 
 
   The Board of Directors 
 
   Afarak Group 
 
   For additional information, please contact: 
 
   Guy Konsbruck, CEO, [phone], 
https://www.globenewswire.com/Tracker?data=TUk3zRfY-htCJny463O5s9iT3rbS1BbLxGrE8TjsOIF643EuueLrpsWXTlhNLVl0EmUZdtaJ7QAbyM9EqhJngL_kLGHgBvxNtWeMAb53Klg= 
[e-mail] 
 
   Jean Paul Fabri, PR Manager, [phone], 
https://www.globenewswire.com/Tracker?data=H7E1SVonI9HjwQVbgvKzg_3sUad6caAIQRnCgptaHn26E9oHvXkZLwSGhgJ6iNtINPIHNZuyOdNQ8DJ09q4NuFKIhBAyKc_5z-AZKpJFahE= 
[e-mail] 
 
   Financial reports and other investor information are available on the 
Company's website: 
https://www.globenewswire.com/Tracker?data=3fQcI2kyowx7jitko8aKPTlpvpOHY_lwLIGMe1B8fM6sUS7111glUgf4RFYajg1-CrCP1O7NUChFrvT0oOIpbw== 
www.afarak.com. 
 
   Afarak Group is a specialist alloy 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 
 
   https://www.globenewswire.com/Tracker?data=3fQcI2kyowx7jitko8aKPeG5wVnALurTSgWWJil_Lg3X5z6Dal-SuFv8m8c20IKIC3A7UKT2FiWuBl6qfBkDPA== 
www.afarak.com 
 
   Attachment 
 
 
   -- Afarak_Q1 2019_EN 
      https://ml-eu.globenewswire.com/Resource/Download/daa6ef26-f84e-4762-8f34-742f420b4159 
 
 
 
 
 

(END) Dow Jones Newswires

May 17, 2019 05:11 ET (09:11 GMT)

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