Afarak Group Plc - Financial Statement Release

CORRECTION: AFARAK GROUP PLC'S FINANCIAL STATEMENTS REVIEW FOR 1 JANUARY - 31 DECEMBER 2014

11:10 London, 13:10 Helsinki, 19 February 2015 - Afarak Group Plc ("Afarak" or"the Company") (LSE: AFRK, OMX: AFAGR) Interim Report

Afarak publishes a correction to the Financial Statements Review 2014 published
16 February 2015. Cash flow from operations was EUR 5.1 million, not EUR -5.1
million as stated in the release published 16 February 2015. The erroneous
negative number was included in the Full Year Highlights on page 1 and the
Consolidated Statement of Cash Flows on page 18.

The complete corrected Financial Statements Review 2014:


AFARAK GROUP PLC'S FINANCIAL STATEMENTS REVIEW FOR 1 JANUARY - 31 DECEMBER 2014

FULL YEAR HIGHLIGHTS (January - December 2014):

- Revenue increased by 27.4% to EUR 172.7 (FY/2013: 135.5) million
- Processed material sold increased by 55.4% to 97,351 (FY/2013: 62,626) tonnes
- EBITDA was EUR 8.4 (FY/2013: 14.0) million and the EBITDA margin was 4.9%
(FY/2013: 10.4%)
- Joint Venture write-downs negatively affected EBITDA by EUR 1.6 million
- EBIT was EUR 1.7 (FY/2013: -8.0) million and the EBIT margin was 1.0%
(FY/2013: -5.9%)
- Profit for the period from continuing operations totalled EUR 0.5 (FY/2013:
-4.4) million
- Full year ferrochrome production increased by 53.3% to 101,461 (FY/2013:
66,197) tonnes
- Tonnage mined decreased by 38.7% to 304,199 (FY/2013: 496,573) tonnes
- Cash flow from operations was EUR 5.1 (FY/2013: 13.8) million
- The Board proposes a capital redemption of EUR 0.02

Q4 HIGHLIGHTS (October - December 2014):

- Revenue decreased by 0.3% to EUR 41.6 (Q4/2013: 41.8) million
- Processed material sold decreased by 0.5% to 23,465 (Q4/2013: 23,593) tonnes
- EBITDA was EUR 0.0 (Q4/2013: 0.8) million and the EBITDA margin was 0.0%
(Q4/2013: 2.0%)
- Joint Venture write-downs negatively affected EBITDA by EUR 1.6 million
- EBIT was EUR -1.1 (Q4/2013: -2.8) million and the EBIT margin was -2.8%
(Q4/2013: -6.8%)
- Profit for continuing operations totalled EUR -0.3 (Q4/2013: -0.7) million
- Ferrochrome production increased by 82.9% to 30,622 (Q4/2013: 16,745) tonnes
- Tonnage mined decreased by 57.4% to 64,875 (Q4/2013: 152,449) tonnes
- Cash flow from operations was EUR -4.3 (Q4/2013: 2.7) million and liquid funds
at 31 December were
  EUR 13.3 (31 December 2013: 13.8) (30 September 2014:21.4) million

DIVIDEND PROPOSAL

The Board of Directors proposes to the Annual General Meeting, which will be
held on 8 May 2015 that a capital redemption of EUR 0.02 per share would be paid
out of the paid-up unrestricted equity fund. The Board will investigate the
possibility to increase the dividend.

                                   +-----+            +------+             |
                                   |     |            |      |             |
                                   |Q4/14|Q4/13 Change|FY2014|FY2013 Change|
 KEY FIGURES (EUR million)         |     |            |      |             |
-----------------------------------+-----+------------+------+-------------+
 Revenue                           | 41.6| 41.8  -0.3%| 172.7| 135.5  27.4%|
-----------------------------------+-----+------------+------+-------------+
 EBITDA                            |  0.0|  0.8       |   8.4|  14.0       |
                                   |     |            |      |             |
 EBITDA margin                     | 0.0%| 2.0%       |  4.9%| 10.4%       |
-----------------------------------+-----+------------+------+-------------+
 EBIT                              | -1.1| -2.8       |   1.7|  -8.0       ||     |            |      |             |
 EBIT margin                       |-2.8%|-6.8%       |  1.0%| -5.9%       |
-----------------------------------+-----+------------+------+-------------+
 Earnings before taxes             | -1.3| -3.1       |   0.5| -11.2       |
                                   |     |            |      |             |
 Earnings margin                   |-3.1%|-7.3%       |  0.3%| -8.2%       |
-----------------------------------+-----+------------+------+-------------+
 Profit for continuing operations  | -0.3| -0.7       |   0.5|  -4.4       |
                                   |     |            |      |             |
 Profit for discontinued operations|  1.8|    0       |   1.8|     0       |
                                   |     |            |      |             |
 Profit                            |  1.4| -0.7       |   2.2|  -4.4       |
                                   |     |            |      |             |
 Earnings per share, basic, EUR    | 0.01| 0.00       |  0.01| -0.02       |
-----------------------------------+-----+------------+------+-------------+


Commenting on the full year and fourth quarter results of 2014, Danko Koncar,
CEO, said:"In spite of facing difficult conditions Afarak performed well in 2014. The
volumes of processed ferrochrome increased substantially in 2014 by 53.3% as a
result of higher demand in the Speciality Alloy segment where production
increased by 23.8% over 2013. In the FerroAlloy segment we saw an increase of
69.2% as Mogale Alloys produced throughout the year and unlike in 2013, did not
participate in Eskom's electricity buyback program. The tonnage mined during the
year was negatively affected by the temporary suspension of the Mecklenburg mine
production and the strike and lockout at the Turkish mines. Unfortunately these
events caused a decrease of 38.7% compared to year 2013.

The Group's revenue in 2014 improved with an increase of 27.4%. Speciality
ferrochrome prices remained stable during the year, whilst charge chrome prices
were weak and remain below the high levels seen in 2013. The weak US dollar
during the majority of 2014 had a negative impact on conversion of revenue and
results from operations. Furthermore, the increase in the cost of production
caused by higher raw material costs in the Speciality Alloys segment and higher
energy cost in the Ferroalloys segment affected our results negatively.

2014 was a year where we saw a good increase in demand for ferrochrome but
unfortunately the increase was not reflected in prices.  The possible price
increase was pushed away by the strengthening of the US dollar in Q4 2014 which
on the other hand helped to increase revenue on conversion of US dollar
denominated transactions. Despite ferrochrome remains difficult to predict, in
the long term we believe that ferrochrome prices, particularly the speciality
and super alloys segment, have potential to recover to higher levels which we
would expect to result in improved margins. The granulation and converter plant
at Mogale Alloys was commissioned in December 2014 and enabled the production of
medium carbon ferrochrome, a niche product, which affects positively the
profitability of Mogale Alloys in 2015. We continue to evaluate initiatives with
the objective of strengthening our position and providing new growth
opportunities. Our focus remains on generating cash and increasing profits.

I'm pleased to say that despite a lower EBITDA we managed to achieve positive
EBIT throughout the first three quarters of 2014. We would also have achieved a
positive EBIT in the fourth quarter of 2014 but unfortunately asset write-downs
in our joint venture operation pushed our results down. We venture forth into
2015 with a more favourable US dollar rate and a lean and committed team which
aims to find ways to improve profitability also in 2015."

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 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 Q4/2014 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.

Investor Conference Call

Management will host an investor conference call in English on 16 February 2015
at 14.00 Finnish time, 12.00 UK time. Please dial-in at least 10 minutes
beforehand, quoting the reference: 44732.

Finnish number +358 (0)800 919 339
UK number +44 (0)800 229 0900


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


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
Helsinki (AFAGR) and the Main Market of the London Stock Exchange (AFRK).
www.afarakgroup.com

Distribution:
NASDAQ Helsinki
London Stock Exchange
main media
www.afarakgroup.com


[HUG#1895710]

Attachments:

Q4-Report.pdf