Afarak Group Plc - Interim report (Q1 and Q3)

AFARAK GROUP: 2016 INTERIM RESULTS

07:00 London, 09:00 Helsinki, 16 August 2016 - Afarak Group Plc ("Afarak" or
"the Company") (LSE: AFRK, NASDAQ: AFAGR) Interim Report

AFARAK GROUP PLC'S INTERIM REPORT FOR 1 APRIL - 30 JUNE 2016

Q2 HIGHLIGHTS (April - June 2016):

- Board approved additional capital redemption of EUR0.01 per share
- Revenue decreased by 25.6% to EUR 39.5 (Q2/2015: 53.1) million as a result of
extreme weakness in demand and prices for Afarak's products
- Processed material sold decreased by 11.2% to 28,214 (Q2/2015: 31,755) tonnes
- Despite the challenging external environment EBITDA remained positive at EUR
0.8 (Q2/2015: 7.6) million and the EBITDA margin was 2.0% (Q2/2015: 14.4%)
- EBIT was EUR -0.9 (Q2/2015: 5.8) million
- Profit for the period from continuing operations totalled EUR -1.0 (Q2/2015:
5.7) million
- Ferrochrome production decreased by 3.8% to 26,786 (Q2/2015: 27,856) tonnes
- Tonnage mined decreased by 56.8% to 56,395 (Q2/2015: 130,417) tonnes
- Cash flow from operations was EUR -0.4 (Q2/2015: 5.0) million and liquid funds
at 30 June were
  EUR 13.2 (30 June 2015: 10.5) (31 March 2016: 21.7) million
- The Group reduced its debt by EUR 4,7 million due to its strong cash position
notwithstanding the depressed markets

INTERIM DISTRIBUTION

The  Board resolved on an additional capital redemption of [EUR 0.01] per share,
using  the authorization given by the AGM held on 11 May 2016.  The payment will
be  made from the company's fund for invested unrestricted equity on16 September
2016.


                                  +-----+     |      +-----+     |      +------+
KEY FIGURES (EUR million)         |Q2/16|Q2/15|Change|H1/16|H1/15|Change|FY2015|
----------------------------------+-----+-----+------+-----+-----+------+------+
Revenue                           | 39.5| 53.1|-25.6%| 80.3| 93.8|-14.4%| 187.7|
----------------------------------+-----+-----+------+-----+-----+------+------+
EBITDA                            |  0.8|  7.6|-89.8%|  4.1| 12.3|-66.9%|  17.2|
                                  |     |     |      |     |     |      |      |
EBITDA margin                     | 2.0%|14.4%|      | 5.1%|13.1%|      |  9.2%|
----------------------------------+-----+-----+------+-----+-----+------+------+
EBIT                              | -0.9|  5.8|      |  0.8|  8.8|      |   9.9|
                                  |     |     |      |     |     |      |      |
EBIT margin                       |-2.2%|11.0%|      | 1.0%| 9.3%|      |  5.3%|
----------------------------------+-----+-----+------+-----+-----+------+------+
Earnings before taxes             | -1.3|  5.4|      | -0.4|  8.1|      |   6.5|
                                  |     |     |      |     |     |      |      |
Earnings margin                   |-3.2%|10.2%|      |-0.5%| 8.6%|      |  3.5%|
----------------------------------+-----+-----+------+-----+-----+------+------+
Profit from continuing operations | -1.0|  5.7|      | -1.3|  8.0|      |   7.8|
                                  |     |     |      |     |     |      |      |
Profit from discontinued          |    0|    0|      |  0.5|    0|      |   0.8|
operations                        |     |     |      |     |     |      |      |
----------------------------------+-----+-----+------+-----+-----+------+------+
Profit                            | -1.0|  5.7|      | -0.8|  8.0|      |   8.5|
                                  |     |     |      |     |     |      |      |
Earnings per share, basic, EUR    |-0.00| 0.02|      |-0.00| 0.03|      |  0.03|
----------------------------------+-----+-----+------+-----+-----+------+------+


Commenting on the second quarter results, Alistair Ruiters, CEO, said:

"The external environment in quarter two was one of the most challenging in
recent years.  Selling prices continued to plummet and the South African rand
continued its rally against the US dollar and the euro.  These two factors have
adversely impacted the industry at large with more firms going into business
rescue.

Despite  the difficult environment,  Afarak still managed  to achieve a positive
EBITDA  in the  first half  of the  year. In  the face  of plummeting prices, we
consciously stuck to our policy of not compromising our selling prices in favour
of  larger sales volumes and the downward  price pressures hit our sales volumes
particularly  in the Speciality Alloy segment.   In addition, our mining volumes
were much less since no open-cast mining happened at Mecklenburg.

Looking  ahead,  we  are  expecting  our  performance  to  improve in the coming
months.   Improved benchmark prices for charge chrome will favour Afarak and our
decision  to switch one of the silicon manganese furnaces at our Mogale plant to
charge  chrome should  reflect positively  in our  returns from  the FerroAlloys
segment.   We are also expecting increased  business from the United States with
respect to special grade ferrochrome.

Internally,  we are very much focused on using this difficult period to evaluate
our cost structures across our operations.  The Board and Management is actively
promoting  cost  saving  initiatives  and  assessing ways to streamline business
processes with a view of strengthening our sustainability.

Our  balance sheet  position remains  healthy.  Over  the past  year, Afarak has
further reduced its debt levels and maintains a good cash position.

Afarak  remains committed  to its  shareholders and  we aim to continue creating
value  for all our stakeholders Looking  ahead, market sentiment is positive and
it  is expected to improve in the coming months.  This improved economic outlook
and  Afarak's balance sheet position gives the Board sufficient comfort to issue
the  interim capital redemption  that was agreed  during our last Annual General
Meeting.

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 Q2/2016 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 17 August 2016 at
14.00 Finnish time, 12.00 UK time. Please dial-in at least 10 minutes
beforehand, quoting the reference: 38313.

Finnish number +358 800 77 4579
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
Jean Paul Fabri, PR & Communications Manager, +356 2122 1566,
jp.fabri@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#2035379]

Attachments:

2016 INTERIM RESULTS.pdf