2015-05-08 08:00:00 CEST
2015-05-08 08:03:33 CEST
REGULATED INFORMATION
Afarak Group Plc - Interim report (Q1 and Q3)
AFARAK GROUP PLC'S INTERIM REPORT FOR 1 JANUARY - 31 MARCH 2015
07:00 London, 09:00 Helsinki, 8 May 2015 - Afarak Group Plc ("Afarak" or "the
Company") (LSE: AFRK, NASDAQ: AFAGR) Interim Report
AFARAK GROUP PLC'S INTERIM REPORT FOR 1 JANUARY - 31 MARCH 2015
Q1 HIGHLIGHTS (January - March 2015):
- Revenue decreased by 5.7% to EUR 40.7 (Q1/2014: 43.2) million
- Processed material sold decreased by 7.4% to 22,826 (Q1/2014: 24,638) tonnes
- EBITDA was EUR 4.6 (Q1/2014: 3.0) million and the EBITDA margin was 11.4%
(Q1/2014: 7.0%)
- EBIT was EUR 2.9 (Q1/2014: 0.9) million and the EBIT margin was 7.2% (Q1/2014:
2.1%)
- Profit for the period totalled EUR 2.3 (Q1/2014: 0.3) million
- Ferrochrome production decreased by 4.8% to 27,449 (Q1/2014: 28,823) tonnes
- Tonnage mined decreased by 1.3% to 108,773 (Q1/2014: 110,261) tonnes
- Cash flow from operations was EUR -2.7 (Q1/2014: 3.0) million and liquid funds
at 31 March were
EUR 11.5 (31 March 2014: 16.8) (31 December 2014: 13.3) million
+-----+ +------+
| | | |
|Q1/15|Q1/14 Change|FY2014|
KEY FIGURES (EUR million) | | | |
------------------------------------+-----+------------+------+
Revenue | 40.7| 43.2 -5.7%| 172.7|
------------------------------------+-----+------------+------+
EBITDA | 4.6| 3.0 54.8%| 8.4|
| | | |
EBITDA margin |11.4%| 7.0% | 4.9%|
------------------------------------+-----+------------+------+
EBIT | 2.9| 0.9 | 1.7|
| | | |
EBIT margin | 7.2%| 2.1% | 1.0%|
------------------------------------+-----+------------+------+
Earnings before taxes | 2.7| 1.3 | 0.5|
| | | |
Earnings margin | 6.5%| 3.1% | 0.3%|
------------------------------------+-----+------------+------+
Profit from continuing operations | 2.3| 0.3 | 0.5|
| | | |
Profit from discontinued operations| 0| 0 | 1.8|
| | | |
Profit | 2.3| 0.3 | 2.2|
| | | |
Earnings per share, basic, EUR | 0.01| 0.00 | 0.01|
------------------------------------+-----+------------+------+
Commenting on the first quarter results, Danko Koncar, CEO, said:"Our Speciality Alloys segment continues the positive trend seen in 2014 with
higher demand for our special grade material. In the FerroAlloys segment trading
volumes were lower than last year as a result of weaker market conditions for
our standard grade material. Despite these lower sales volumes Afarak still
managed to achieve better results during the first quarter.
Ferrochrome production was lower during the first quarter to reduce our
inventory levels that have been increasing over the last months. Tonnages mined
were at the same level of the first quarter last year, with mining activity at
Kavak mine in Turkey restarted in March 2015 following the end of the strike.
The Group's revenue during the first quarter was affected by lower volumes, but
did not have a major impact on our results as we attained better margins as a
result of a stronger US dollar on conversion of revenue. The strengthening of US
dollar did not have a major effect on our cost as they were mainly denominated
in Euro and South African Rand, this led the gains on the revenue conversion to
Euro to flow through EBITDA and EBIT.
We aim to continue focusing on our core business and the production of special
grade material. At Mogale Alloys we still had some challenges in the supply of
medium carbon ferrochrome but we expect that there will be an increase in demand
as a result of lower future market capacity. We have also continued evaluating
initiatives to strengthen our position with our main focus remaining on
generating cash and increasing profits.
I would like to conclude by highlighting that profit from continuing operations
in the first quarter are higher than those achieved in the full year 2014, this
is a sign that the positive trend started last year has improved with the
strengthening of the US dollar."
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 Q1/2015 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.
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 South 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
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