AFARAK GROUP: INTERIM REPORT Q1/2017

07:00London, 09:00 Helsinki, 12 May 2017 - Afarak Group Plc ("Afarak" or "the Company") (LSE: AFRK, NASDAQ: AFAGR) Interim Report

AFARAK GROUP: INTERIM REPORT Q1/2017

Strong start to the year, Group EBITDA at EUR 12.7 million.

HIGHLIGHTS IN THE FIRST QUARTER OF 2017

Afarak's EBITDA stood at EUR 12.7 million, compared to EUR 3.3 million a year earlier. The significant improvement was due to higher ferrochrome prices and strong market fundamentals, supported by productivity gains, primarily in processing.

• Afarak registered the highest quarterly result since entering the mineral business in 2008
• Processed material sold increased by 3.5% to 27,892 (Q1/2016: 26,952) tonnes
• Tonnage mined increased by 87.6% to 85,352 (Q1/2016: 45,486) tonnes
• Revenue increased by 39.0% to EUR 56.7 (Q1/2016: 40.8) million
• EBITDA was EUR 12.7 (Q1/2016: 3.3) million and the EBITDA margin was 22.4% (Q1/2016: 8.0%)
• EBIT was EUR 11.1 (Q1/2016: 1.7) million and the EBIT margin was 19.6% (Q1/2016: 4.2%)
• Profit for the period from continuing operations totalled EUR 4.2 (Q1/2016: -0.2) million, with cash flow from operations standing at EUR 8.5 (Q1/2016: 7.2) million and liquid funds at 31 March were EUR 16.2 (31 March 2016: 21.7) (31 December 2016: 9.7) million
• Due to the exceptional results in quarter one 2017, an extraordinary EUR 0.02 per share distribution from the invested unrestricted equity fund is now being recommended to the Annual General Meeting later this month

Key Group figures

MARKET SENTIMENT FOR THE SECOND QUARTER 2017

As expected, the high price levels for ferrochrome and Chrome Ore seen in quarter one, have not been sustainable over the longer term. We still expect improved performance in Q2 2017 compared to a year earlier, although subdued, when compared to Q1 2017 numbers.  

CEO Guy Konsbruck

"Afarak has had a very strong start to the year. Our EBITDA improved significantly from last year, reaching EUR 12.7 million. The strong market, particularly higher ferrochrome and ore prices, had a notable positive impact on our results. However, this bullish market has already started to dampen and prices have reversed trends towards the end of quarter one, going into the second quarter. I am particularly satisfied that our internal initiatives have also contributed to further strengthening working capital management, higher production volumes, productivity gains and considerable cost benefits. Our shaking tables in South Africa and the successful transition of our furnaces from silicomanganese to ferrochrome allowed us to increase production. The commencement of opencast mining is also yielding a growing supply of material. We are committed to continue implementing similar measures and initiatives aimed at enhancing our productivity and further increasing our efficiency.

Both our business segments, speciality alloys and ferroalloys, delivered significantly improved results, on the back of higher selling prices. This solid performance was further supported by the joint venture in South African due to higher sales volumes and improved sale prices. These results have allowed us to propose to the forthcoming Annual General Meeting an extraordinary EUR 0.02 per share distribution.

Looking ahead, the volatility of the market remains a key risk and we should not expect record performances on a quarterly basis."

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 Q1/2017 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 12 May 2017 at 12.00 Finnish time, 10.00 UK time. Please dial-in at least 10 minutes beforehand, quoting the reference: 7467105

Finnish number +358 (0)9 7479 0361
UK number +44 (0)330 336 9105

Guy Konsbruck
CEO
Afarak Group plc
www.afarak.com

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