07:45 London, 09:45 Helsinki, 19 August 2022 - Afarak Group Plc ("Afarak" or "the Company") (LSE: AFRK, NASDAQ: AFAGR)
FINANCIAL INTERIM RELEASE H1 2022
Earnings before taxes
Profit from continuing operations
Profit from discontinuing operations
Earnings per share
Personnel (end of period)
FIRST HALF 2022 HIGHLIGHTS
Revenue increased strongly by 146.5% to EUR 92.1 (H1/2021: 37.3) million;
Processed material sold increased by 24.2% to 15,205 (H1/2021: 12,667) tonnes supported by stronger market demand and higher prices;
Tonnage mined decreased by 27.0% to 39,109 (H1/2021: 53,542) tonnes;
The Group’s EBITDA increased significantly to EUR 24.5 (H1/2021: -0.9) million and the EBITDA margin was 26.7% (H1/2021: -2.4%);
EBIT was EUR 24.0 (H1/2021: 0.9) million, with the EBIT margin at 26.1% (H1/2021: 2.4%);
Profit for the period from continuing operation totalled EUR 21.2 (H1/2021: -0.9) million;
Cash flow from operations stood at EUR 10.1 (H1/2021: -1.9) million;
Net interest-bearing debt after deducting liquid funds amounted to EUR 21.5 (50.3) (31 December 2021: 32.2) million;
Cash and cash equivalents at 30 June totalled EUR 5.0 (30 June 2021: 2.9) (31 December 2021: 6.3) million.
OUTLOOK FOR THE SECOND HALF OF 2022
In recent weeks the ferro-chromium market has shown signs of slow-down both in demand and price, which is not unusual during summer months. The present price reductions may be more sustainable, nonetheless. On the other hand, the energy prices and availability will remain the major worry of any producer in the foreseeable future, and should trigger elevated price levels also going forward.
Afarak has been for many years now the only Western producer of low carbon ferro-chrome, a critical material for stainless steel production. As such, we have experienced very challenging years, recently. Whereas our main focus has always been on specialty grades, we are now doing all possible efforts to increase our production capacities for more widely used standard grades in order to present options for our long term customers who may start to experience some reluctance to use certain non-Western origins.
It must be noted that recently Chinese and Indian LC FeCr is offered, origins which have not been seen normally in the EU and US market.
CEO GUY KONSBRUCK
“During the first half of 2022, the company succeeded to substantially further reduce its debt. Our specialty segment showed increased activity and profits, although the ferro-chrome markets have not been directly impacted by any sanctions or tariffs. Sizeable rises in logistic cost, higher raw material cost could be partially off-set by alternative raw material mixes and favorable USD exchange rates. We foresee a reduced profitability in H2, as the market prices show some weakness, and raw materials already secured may impact on our margin. The FerroAlloys segment, with a reduced but stable mining activity in South Africa has now reached a break-even point. We expect some improvements for H2/22 in that segment.
The company also intends to resume operations in our Magnochrome refractory plant, in Serbia. Initial investments to the facilities should be launched during H2.
The commodities and stainless steel markets are generally seeing a positive trend, but we expect to see a more challenged business environment throughout the rest of the year. All will depend on the further development of the present geo-political tensions both in Europe and South-East Asia”
Helsinki, August 19, 2022
Afarak Group Plc
Board of Directors
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Afarak Group is a specialist alloy 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).
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