Afarak Group Plc - Interim report (Q1 and Q3)

AFARAK GROUP PLC'S INTERIM REPORT FOR 1 JANUARY - 31 MARCH 2014

07:00 London, 09:00 Helsinki, 8 May 2014 - Afarak Group Plc ("Afarak" or "the
Company") (LSE: AFRK, OMX: AFAGR) Interim Report

AFARAK GROUP PLC'S INTERIM REPORT FOR 1 JANUARY - 31 MARCH 2014

Q1 HIGHLIGHTS (January-March 2014):

- Positive EBIT and profit for the first time since entering the mineral
business in 2008
- Revenue increased by 36.7% to EUR 43.2 (Q1/2013: 31.6) million
- Sales from processed products increased by 47.7% to 22,146 (Q1/2013: 14,993)
tonnes
- EBITDA was EUR 3.0 (Q1/2013: 4.2) million and the EBITDA margin was 7.0%
(Q1/2013: 13.2%)
- EBIT was EUR 0.9 (Q1/2013: -2.1) million
- Profit for the period totalled EUR 0.2 (Q1/2013: 0.0) million
- Production increased by 70.5% to 139,084 (Q1/2013: 81,551) tonnes
- Cash flow from operations was EUR 2.8 (Q1/2013: 8.1) million and liquid funds
at 31 March were
  EUR 16.8 (31 March 2013: 17.5) (31 December 2013:13.8) million
- Outlook for 2014 remain unchanged

                               +-----+            +------+
 KEY FIGURES (EUR million)     |Q1/14|Q1/13 Change|FY2013|
-------------------------------+-----+------------+------+
 Revenue                       | 43.2| 31.6  36.7%| 135.5|
-------------------------------+-----+------------+------+
 EBITDA                        |  3.0|  4.2 -28.0%|  14.0|
                               |     |            |      |
 EBITDA margin                 | 7.0%|13.2%       | 10.4%|
-------------------------------+-----+------------+------+
 EBIT                          |  0.9| -2.1       |  -8.0|              |     |            |      |
 EBIT margin                   | 2.1%|-6.5%       | -5.9%|
-------------------------------+-----+------------+------+
 Earnings before taxes         |  1.2| -2.7       | -11.2|
                               |     |            |      |
 Earnings margin               | 2.7%|-8.7%       | -8.2%|
-------------------------------+-----+------------+------+
 Profit                        |  0.2|  0.0       |  -4.4|
                               |     |            |      |
 Earnings per share, basic, EUR| 0.00| 0.00       | -0.02|
-------------------------------+-----+------------+------+

Commenting on the first quarter results, Danko Koncar, CEO, said:"The Group's revenue during the period was strong with a substantial increase of
48% in sales volumes of processed material when compared to the same quarter
last year. Despite this increase we have experienced difficult market conditions
with lower prices and a weak US dollar impacting conversion of revenue and
results from operations.

Processing volumes improved in the first quarter when compared to the equivalent
period last year as a result of having both EWW and Mogale Alloys in full
operation during this period.  Mining sales and production volumes were also
higher when compared to the same period last year due to the fact that
Mecklenburg was not yet in operation in the first quarter of 2013.

The ferrochrome market remains difficult to predict with some signs of recovery
during the period. In the longer term we believe that ferrochrome, particularly
the speciality and super alloys segment, will again be in high demand. We
continue evaluating different initiatives that could strengthen our position and
provide new growth opportunities.  Our focus remains on generating cash and
increasing profits.

Finally, I'm pleased to announce that we have achieved positive EBIT and profit
for the first time from the mineral business since entering the sector.



2014 OUTLOOK


The global economic outlook is showing signs of recovery with western industrial
nations issuing positive economic indicators.  Demand for commodities is also
showing recovery with increase in demand for speciality alloys in United States.
The ferroalloy market is expected to continue the positive trend of 2013 during
which consumption reached record levels. To date, however, pricing has not
responded to the increased demand. The Group continues to be prepared for
significant price fluctuations and will continue to adapt its production levels
accordingly. At Mogale Alloys, part of the FerroAlloys division, the Company
expects to start production of medium carbon ferrochrome during the third
quarter of 2014, which is expected to have a positive impact on our profit
margins. In the Speciality Alloys division we are expecting to see an increase
in our raw materials cost due to current market conditions.  As a result the
Group expects its financial performance for the full year 2014 to marginally
improve compared to 2013.

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 Q1/2014 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.

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



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 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#1783712]

Attachments:

Q1.pdf