Afarak Group Plc - Interim report (Q1 and Q3)

AFARAK GROUP PLC'S INTERIM REPORT FOR 1 APRIL - 30 JUNE 2013

07:00 London, 09:00 Helsinki, 15 August 2013 - Afarak Group Plc ("Afarak" or"the Company") (LSE: AFRK, OMX: AFAGR) Interim Report

AFARAK GROUP PLC'S INTERIM REPORT FOR 1 APRIL - 30 JUNE 2013

Q2 HIGHLIGHTS (April-June 2013):


- Revenue increased by 1.4% to EUR 31.4 (Q2/2012: 31.0) million
- Sales from processed products decreased by 14.9% to 10,689 (Q2/2012: 12,567)
tonnes
- EBITDA was EUR 6.2 (Q2/2012: 1.6) million and the EBITDA margin was 19.6%
(Q2/2012: 5.0%)
- EBIT was EUR 0.0 (Q2/2012: -4.8) million
- Profit for the period totalled EUR -1.8 (Q2/2012: -2.3) million
- Production increased by 120.9% to 163,878 (Q2/2012: 74,181) tonnes
- Cash flow from operations was EUR 4.8 (Q2/2012: 14.4) million and liquid funds
at 30 June were
 EUR 17.7 (30 June 2012: 44.3) (31 March 2013:17.5) million
- The Group updates its Outlook for 2013 due to signs of the increase in demand
for commodities

                              +-----+             +-----+             +------+
KEY FIGURES (EUR million)     |Q2/13| Q2/12 Change|H1/13| H1/12 Change| FY/12|
------------------------------+-----+-------------+-----+-------------+------+
Revenue                       | 31.4|  31.0   1.4%| 63.0|  76.5 -17.7%| 128.6|
------------------------------+-----+-------------+-----+-------------+------+
EBITDA                        |  6.2|   1.6 296.6%| 10.3|   4.7 119.9%|   9.2|
                              |     |             |     |             |      |
EBITDA margin                 |19.6%|  5.0%       |16.4%|  6.1%       |  7.2%|
------------------------------+-----+-------------+-----+-------------+------+
EBIT                          |  0.0|  -4.8       | -2.0|  -8.4       | -16.8|
                              |     |             |     |             |      |
EBIT margin                   | 0.1%|-15.4%       |-3.2%|-10.9%       |-13.0%|
------------------------------+-----+-------------+-----+-------------+------+
Earnings before taxes         | -2.5|  -4.2       | -5.3|  -6.3       | -19.6|
                              |     |             |     |             |      |
Earnings margin               |-8.0%|-13.5%       |-8.4%| -8.2%       |-15.2%|
------------------------------+-----+-------------+-----+-------------+------+
Profit                        | -1.8|  -2.3       | -1.9|  -4.3       | -16.6|
                              |     |             |     |             |      |
Earnings per share, basic, EUR|-0.01| -0.01       |-0.01| -0.01       | -0.06|
------------------------------+-----+-------------+-----+-------------+------+


Commenting on the second quarter results, Danko Koncar, CEO, said:"I am pleased to report that the positive trend started in Q1 has continued into
the second quarter. There is a significant improvement compared to the same
period last year and in the second quarter we have managed an improvement over
last year's revenue despite the lower sales and difficult market conditions. We
were also able to increase profitability and generate positive cash flow. This
was achieved by focusing on value added speciality products, increase in the
sales of ferrochrome, increased mining production and lowering our cost base.
This improved revenue allowed us to pay a EUR 0.01 capital redemption per share
to our shareholders in May this year and to shift our focus to new investment
opportunities.

Regardless of the processing volumes being lower in the second quarter compared
to the equivalent period last year, we secured a higher margin. Despite the fact
that the ferrochrome market remains difficult to predict, we have seen some
positive growth in that segment.

In the longer term I firmly believe that ferrochrome, particularly the
speciality and super alloys segment, will again be in high demand. At the same
time we are not waiting for the market to change, but are continuously
evaluating different initiatives that could strengthen our position and provide
new growth opportunities.

In addition we have significantly restructured our organisation and the way we
work to streamline costs. Our focus remains on generating cash and increasing
profits. The Company has also changed its name and we now are operating under
the name Afarak Group plc."


2013 outlook

The global economic outlook continues to be uncertain in 2013.  Despite the
Eurozone crisis continues, there are signs of an increase in the demand for
commodities. The ferroalloy market however, is still expected to continue to be
volatile during the year with signs of improvement expected at the end of the
year or the first quarter of next year. The Group is preparing for significant
price fluctuations and will continue to adapt its production levels accordingly.
The Company is also continuing its cost saving initiatives and restructuring of
functions and this is expected to bring material costs savings in 2013 compared
to previous financial year. In light of this the Group expects its financial
performance for the full year 2013 to significantly improve compared to 2012.

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.

The previous outlook, published in the first quarter interim results on 8 May
2013, was:

The global economic outlook continues to be uncertain in 2013 as the Eurozone
crisis continues and demand for commodities, primarily driven by Chinese
consumption, remains weak. The ferroalloy market is expected to continue to be
volatile during the year. The Group is preparing for significant price
fluctuations and will continue to adapt its production levels accordingly. At
Mogale Alloys, part of the FerroAlloys division, the decision has been taken to
participate in Eskom's electricity buyback program. The Company is also
continuing its cost saving initiatives and restructuring of functions and this
is expected to bring material costs savings in 2013 compared to previous
financial year. In light of this the Group expects its financial performance for
the full year 2013 to significantly improve compared to 2012.

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 Q2/2013 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 15 August 2013 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) 844 762 0 762


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
George Price, +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
ferro alloys 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


[HUG#1723133]

Attachments:

Q2.pdf