07:30 London, 09:30 Helsinki, 18 August 2023 - Afarak Group SE ("Afarak" or "the Company") (LSE: AFRK, NASDAQ: AFAGR)
FINANCIAL INTERIM RELEASE H1 2023
Earnings before taxes
Profit from continuing operations
Profit from discontinuing operations
Earnings per share
Personnel (end of period)
FIRST HALF 2023 HIGHLIGHTS
Revenue increased by 3.6% to EUR 95.3 (H1/2022: 92.1) million;
Processed material sold decreased by 15.5% to 12,855 (H1/2022: 15,205) tonnes;
Tonnage mined increased significantly to 162,971 (H1/2022: 39,109) tonnes;
The Group’s EBITDA was EUR 15.1 (H1/2022: 24.5) million and the EBITDA margin was 15.8% (H1/2022: 26.7%);
EBIT was EUR 14.4 (H1/2022: 24.0) million, with the EBIT margin at 15.1% (H1/2022: 26.1%);
Profit for the period totalled EUR 10.5 (H1/2022: 21.2) million;
Cash flow from operations stood at EUR 8.3 (H1/2022: 10.1) million;
The interest-bearing debt amounted to EUR 3.8 (26.4) (31 December 2022: 2.2) million;
Cash and cash equivalents at 30 June totalled EUR 19.9 (30 June 2022: 5.0) (31 December 2022: 12.4) million.
OUTLOOK FOR THE SECOND HALF OF 2023
The ferro-chromium market typically slows down both in demand and price in Q3, due to the summer break. The prices for low carbon ferro-chrome have reduced substantially during H1, but now seem to have found a bottom. The low-priced imports from China and India in 2023 have led us to reduce our output (especially of standard grades). We do not expect substantial changes during H2/2023 in that respect. Afarak has been for many years now the only Western producer of low carbon ferro-chrome, a critical material for the production of the Aerospace, Automotive, Green energies, and various other industries.
CEO Dr ROMAN LURF
“During the first half of 2023, the company succeeded to record very solid results from our underlying base business under challenging market conditions. Our specialty segment showed sustainable profitability with stable demand in our core markets US, Europe and Japan, although the global low carbon ferro-chrome demand and its market prices have decreased substantially over that period.
For H2 we foresee an ongoing challenging market environment, with further weak global market prices, combined with low demand. A lot will depend on the central banks inflation strategy, the recent government policies such as the US Inflation Reduction Act, the EU’s proposed Green Deal and the further development of the present geo-political tensions both in Europe and South-East Asia as well.
Nevertheless, we are confident about remaining profitable due to being the top-quality low carbon ferro-chrome producer in the global market and our ongoing cost reduction and productivity improvement programs in place.
The Ferro-Alloys segment, based on our mining activity in South Africa is continuously improving and has been profitable in H1. For H2 we expect further positive developments which are driven by our continuous business- and development- improvement initiatives.
The company also intends to resume the development and operations in our Magnochrome refractory project, in Serbia to strengthen our business model through further diversification. Initial investments to the facilities should be launched during H2.
The planned integration of the LL-resources Group into Afarak, is expected to show first synergy effects during Q4 2023, and we are very positive about the additional revenue and profit streams triggered and added by the combination of both organizations.
Finally, I would like to thank all our shareholders, our customers and suppliers and our outstanding employees for their continuous support and efforts which has been crucial for our success.
Helsinki, August 18, 2023
Afarak Group SE
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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