Afarak Group Plc - Interim report (Q1 and Q3)

AFARAK GROUP PLC'S INTERIM REPORT FOR 1 JULY - 30 SEPTEMBER 2015

07:00 London, 09:00 Helsinki, 10 November 2015 - Afarak Group Plc ("Afarak" or"the Company") (LSE: AFRK, OMX: AFAGR) Interim Report

AFARAK GROUP PLC'S INTERIM REPORT FOR 1 JULY - 30 SEPTEMBER 2015

Q3 HIGHLIGHTS (July-September 2015):
- Revenue increased by 10.3% to EUR 44.8 (Q3/2014: 40.6) million
- Processed material sold decreased by 23.9% to 20,059 (Q3/2014: 26,347) tonnes
- EBITDA was EUR 1.3 (Q3/2014: 2.1) million and the EBITDA margin was 2.8%
(Q3/2014: 5.1%)
- Adjusted EBITDA was EUR 1.6 (Q3/2014: 0.9) million; adjusted EBITDA margin was
3.6%  (Q3/2014: 2.2%)
- EBIT was EUR -0.7 (Q3/2014: 0.5) million and the EBIT margin was -1.5%
(Q3/2014: 1.3%)
- Profit for the period totalled EUR -1.0 (Q3/2014: -0.7) million
- Production of processed material decreased by 4.0% to 19,348 (Q3/2014:
20,163) tonnes
- Tonnage mined increased by 154.0% to 127,004 (Q3/2014: 50,005) tonnes
- Cash flow from operations was EUR 9.9 (Q3/2014: 1.2) million and liquid funds
at 30 September was
  EUR 22.3 (30 September 2014: 21.4) (30 June 2015: 10.5) million

                            +-----+     |      +--------+        |      +------+
 KEY FIGURES (EUR million)  |Q3/15|Q3/14|Change|Q1-Q3/15|Q1-Q3/14|Change|FY2014|
----------------------------+-----+-----+------+--------+--------+------+------+
 Revenue                    | 44.8| 40.6| 10.3%|   138.5|   131.1|  5.7%| 172.7|
----------------------------+-----+-----+------+--------+--------+------+------+
 EBITDA                     |  1.3|  2.1|-39.7%|    13.5|     8.4| 60.3%|   8.4|
                            |     |     |      |        |        |      |      |
 EBITDA margin              | 2.8%| 5.1%|      |    9.8%|    6.4%|      |  4.9%|
----------------------------+-----+-----+------+--------+--------+------+------+
 EBIT                       | -0.7|  0.5|      |     8.1|     2.9|      |   1.7|
                            |     |     |      |        |        |      |      |
 EBIT margin                |-1.5%| 1.3%|      |    5.8%|    2.2%|      |  1.0%|
----------------------------+-----+-----+------+--------+--------+------+------+
 Earnings before taxes      | -2.0| -1.3|      |     6.1|     1.7|      |   0.5|
                            |     |     |      |        |        |      |      |
 Earnings margin            |-4.5%|-3.3%|      |    4.4%|    1.3%|      |  0.3%|
----------------------------+-----+-----+------+--------+--------+------+------+
 Profit from continuing     | -1.0| -0.7|      |     7.0|     0.8|      |   0.5|
 operations                 |     |     |      |        |        |      |      |
                            +-----+     |      +--------+        |      +------+
 Profit from discontinued   |    0|    0|      |       0|       0|      |   1.8|
 operations                 |     |     |      |        |        |      |      |
                            +-----+     |      +--------+        |      +------+
 Profit                     | -1.0| -0.7|      |     7.0|     0.8|      |   2.2|
                            |     |     |      |        |        |      |      |
 Earnings per share, basic, | 0.00|-0.00|      |    0.03|    0.00|      |  0.01|
 EUR                        |     |     |      |        |        |      |      |
----------------------------+-----+-----+------+--------+--------+------+------+

Commenting on the third quarter results, Alistair Ruiters, CEO, said:"The commodity market in general is experiencing pressures due to the slowdown
of the global economy which as a result had an impact on sales prices as well as
demand. Afarak is not immune to market volatility.


Afarak has reduced planned ferrochrome production volumes in the Speciality
Alloys segment to mitigate the risk of straining its working capital. The
tonnages mined increased significantly when compared to the previous year as a
result of having all mines in operation. Vlakpoort mine has continued bulk
sampling throughout the quarter which contributed positively to the increase in
volumes.

The Group's revenue in the quarter under review continued at  higher levels as
reported in H1. This was due to all our mines being in operation, and increased
volumes of traded specialised third party material. Lower production levels,
planned plant maintenance, and high energy costs in South Africa led to an
increase in the cost of production per tonne. This had an impact on the Group's
performance in this quarter.


Theresults do not reflect the underlying quarterly performance of Afarak. When
excluding the effects of extraordinary items such as the  recent disposal of  an
associate and the sale of land in Turkey in the equivalent quarter last year,
the adjusted EBITDA for this quarter would be EUR 1.6 million. This is
approximately 75% better than the comparative adjusted EBITDA of 2014.


We continue to focus on our core business and the production of special grade
material. At Mogale Alloys we are promoting the increased production of
 specialised material to generate enhanced returns. We continue to evaluate
initiatives to strengthen our position in the industry with our main focus  on
generating cash and increasing profits. Our ability to generate cash from
operations remains strong.

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 significantly 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 Q3/2015 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.afarak.com.

Investor Conference Call
Management will host an investor conference call in English on 10 November 2015
at 14.00 Finnish time, 12.00 UK time. Please dial-in at least 10 minutes
beforehand, quoting the reference: 38313.


Finnish number +358 (0)800 919 339
UK number +44 (0) 844 762 0 762


AFARAK GROUP PLC
Alistair Ruiters
CEO

For additional information, please contact:

Afarak Group Plc
Alistair Ruiters, CEO, +358 50 372 1130, alistair.ruiters@afarak.com
Melvin Grima, Finance Director, +356 2122 1566, melvin.grima@afarak.com

Financial reports and other investor information are available on the Company's
website: www.afarak.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).

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


[HUG#1965646]

Priedai:

Q3 Interim Report English.pdf