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
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|
|Earnings before taxes||-1.3||5.4||-0.4||8.1||6.5|
|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|
|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.
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 +358 800 77 4579
UK number +44 (0) 844 762 0 762
AFARAK GROUP PLC
For additional information, please contact:
Afarak Group Plc
Alistair Ruiters, CEO, +358 50 372 1130, email@example.com
Melvin Grima, Finance Director, +356 2122 1566, firstname.lastname@example.org
Jean Paul Fabri, PR & Communications Manager, +356 2122 1566, email@example.com