16:00 London, 18:00 Helsinki, August 23, 2019 - Afarak Group Plc ("Afarak" or "the Company")



RevenueEUR million41.554.382.8104.5194.0
EBITDAEUR million-8.11.2-12.90.5-1.0
EBITEUR million-31.1-0.4-37.7-2.8-14.1
Earnings before taxesEUR million-24.6-3.3-31.8-5.8-18.5
ProfitEUR million-21.6-2.7-29.2-4.6-18.6
Earnings per shareEUR-0.08-0.01-0.11-0.02-0.07
EBITDA margin%-19.62.2-15.60.5-0.5
EBIT margin%-74.9-0.8-45.6-2.7-7.3
Earnings margin%-59.3-6.2-38.5-5.6-9.6
Personnel (end of period) 1,0359291,035929942


  • Revenue for the second quarter of 2019 decreased by 23.6% to EUR 41.5 (Q2/2018: 54.3) million;
  • Processed material sold decreased by 18.7% to 21,082 (Q2/2018: 25,929);
  • Tonnage mined decreased by 44.9% to 83,161 (Q2/2018: 150,852) tonnes due to lower mining activity at Stellite mine and no mining activity at Mecklenburg mine;
  • The Group’s EBITDA significantly lower at EUR -8.1 (Q2/2018: 1.2) million and the EBITDA margin was -19.6% (Q2/2018: 2.2%);
  • EBIT was EUR -31.1 (Q2/2018: -0.4) million, with the EBIT margin at -74.9% (Q2/2018: -0.8%);
  • Profit for the period totalled EUR -21.6 (Q2/2018: -2.7) million, negatively impacted by an impairment write-down related to the Mogale business of EUR 20.8 million, which was partly offset by the gain on change in control of Synergy Africa Ltd, acquiring 100% shareholding, amounting to EUR 7.1 million;
  • Cash flow from operations stood at EUR -1.1 (Q2/2018: -4.8) million;
  • Net interest-bearing debt after deducting liquid funds amounted to EUR 30.2 (10.5) (31 March 2019:11.9) million;
  • Cash and cash equivalents at 30 June totalled EUR 6.1 (30 June 2018: 5.5) (31 March 2019: 10.5) million.



  • Revenues decreased by 20.8% to EUR 82.8 (H1/2018: 104.5) million compared with the year earlier, due to lower selling prices and lower sales volumes as a result of a weakening economy;
  • Profitability was primarily impacted by the negative performance in the FerroAlloys segment, due to lower market prices and the adverse conditions that the plants faced in South Africa;
  • EBITDA for the first half of 2019 contracted compared to the equivalent period in 2018, to EUR -12.9 (H1/2018: 0.5) million, the main impact coming from the negative performance of the FerroAlloys segment;
  • Profit for the first half of 2019 totalled to EUR -29.2 (H1/2018: -4.6) million.



The Global economy continues to face a turbulent future, with uncertainties in US/Sino relationships and BREXIT overhanging Europe. It remains impossible to forecast prices or volumes with any accuracy.

The third quarter is typically driven by a seasonal summer slow-down in Europe where demand decreases. Since the end of Q2, we have used the summer shut down in Germany to carry-out a maintenance shut-down of 6 weeks. Additionally, in South Africa expensive winter energy tariffs came onstream in June, followed by seasonal maintenance shut-downs. We have temporarily closed furnaces P2 and P3 and replaced the roof of furnace P1. The third quarter is expected to see a weaker market demand and prices for both the FerroAlloys and the Specialty alloys segment have already decreased. In the FerroAlloys segment the contraction of the ferrochrome benchmark to USD 104 c/lb, from USD 120 c/lb in quarter two, led management to take the measure described above. Inventories were written down in quarter two to reflect lower prices of quarter three.


“The challenges faced by Afarak during 2018, continued in the first half of 2019.

In South Africa, the bad financial performance of the FerroAlloys segment continued, which heavily impacted the Group’s results. The sales volumes were below those experienced in Q2 2018 as a result of the global economic slow-down.  Extremely low charge chrome benchmark prices caused the revenue to decrease further. The irregular availability and the high cost of energy resulted in a major difficulty in achieving good, reliable performance in our Mogale smelter. As a consequence, we cut production by half and concentrated on production on the DC furnace, as well as the converter. We also changed key management and started a retrenchment process to lower fixed costs. The whole South African industry is suffering heavily from the high energy prices.

The Speciality Alloy segment was also impacted by lower selling prices of low carbon ferrochrome. During the quarter, management decided to extend the summer maintenance shut-down by two weeks at our EWW plant in Germany, to manage levels of inventory. The mines in Turkey continued to perform well.

The charge chrome benchmark price for quarter three has dropped to an even lower level of USD 104 c/lb, from USD 120 c/lb in quarter two, being the lowest price in three years. With such low selling prices, together with seasonal effects, we expect quarter three to be another challenging quarter.

Like others in our industry, we are being badly affected by external, global economic issues and some specific issues affecting anyone in South Africa. 

As of this quarter we have control over all the mines in our South African Ferro-Alloys business; our Mogale smelter has proven it can flexibly handle multiple product lines and has a record of good customer satisfaction. Like others in our industry, we are being badly affected by external, global economic issues and some specific issues affecting anyone in South Africa. 

Our vertically integrated Speciality Alloys business in Germany and Turkey has ample reserves, world-class laboratory facilities and proven processing capability. 

We are as well placed as we can be to take immediate advantage of any improvement in our macroeconomic environment.”

The Board of Directors
Afarak Group

For additional information, please contact:
Guy Konsbruck, CEO, +356 2122 1566, guy.konsbruck@afarak.com
Jean Paul Fabri, +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 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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