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AFARAK GROUP PLC: FINANCIAL STATEMENTS RELEASE 2019

Written by Customer Service on . Posted in Earnings Releases And Operating Results.

11:30 London, 13:30 Helsinki, 28 February 2020 – Afarak Group Plc (“Afarak” or “the Company”) (LSE: AFRK, NASDAQ: AFAGR)AFARAK GROUP PLC: FINANCIAL STATEMENTS RELEASE 2019QUARTER FOUR 2019 HIGHLIGHTSRevenue for the fourth quarter of 2019 decreased by 39.2% to EUR 28.6 (Q4/2018: 47.0) million on account of lower sales volumes and lower selling prices;Processed material sold decreased by 34.5%, to 16,914 (Q4/2018: 25,833) tonnes;Tonnage mined decreased by 28.8%, to 73,021 (Q4/2018: 102,562) tonnes due to the temporarily discontinued mining activity at the South African mines;The Group’s EBITDA decreased to EUR -6.3 (Q4/2018: 1.0) million and the EBITDA margin at -22.1% (Q4/2018: 2.1%);EBIT was EUR -15.4 (Q4/2018: -7.0) million and the EBIT margin at -53.8% (Q4/2018:          -14.9%);An impairment write-down on other long term assets related to Mogale business of EUR 7.4 (Q4/2018: 6.5) million;Profit for the period totalled EUR -13.9 (Q4/2018: -11.1) million;Cash flow from operations was EUR 4.4 (Q4/2018: 4.3) million. Net interest-bearing debt increased to EUR 54.7 (31 December 2018: 12.3) (30 September 2019: 52.7) million;Cash and cash equivalents at 31 December totalled EUR 5.4 (31 December 2018: 12.1) (30 September 2019: 8.8) million.FULL YEAR 2020 HIGHLIGHTSRevenue for the year 2019 decreased by 25.3% on account of lower sales volumes and lower selling prices in both Speciality Alloys and FerroAlloys segment;Processed material sold decreased by 18.7%, to 81,802 (FY/2018: 100,567) tonnes;Tonnage mined decreased by 34.9%, to 357,557 (FY/2018: 549,411) tonnes due to the temporarily discontinued mining activity at the South African mines;Low margins in both segments and higher unabsorbed fixed overheads due to lower production caused EBITDA to decrease to EUR -23.8 (FY/2018: -1.0) million;An impairment write-down on goodwill and other long-term assets related to Mogale business of EUR 32.0 (FY/2018: 6.5) million;Profit for the full year 2019 decreased to EUR -58.9 (FY/2018: -18.6) million.  MARKET SENTIMENT FOR THE FIRST HALF 2020The general expectation in the industry is that prices recover during 2020, however this could be impacted by a macro-economic incidence, such as the present corona virus epidemic which has already started disrupting production output in China and could extend to other parts of the world.The Group has taken a conservative view for 2020 and is prepared for weak market conditions, though still expecting lower losses when compared to 2019.CEO GUY KONSBRUCK“During Q4 2019, the business conditions for the chrome industry further deteriorated, especially in South Africa, where energy cost and availability remained a huge challenge. As a result, lay-offs and production cuts were announced by many producers. Afarak was not an exception. Fortunately, it seems that the South African government has realised the emergency in the meantime, so that swift and concrete counter-measures could be kicked off very soon. Together with the industry players, many official bodies are elaborating plans on saving and reinvigorating the industrial activity.Our Specialty Alloys segment continued to perform in a satisfactory way, given the circumstances. Low Carbon ferrochrome prices have also been under pressure, and our efforts to right-size the production with the actual demand leads to a lower level of fixed cost absorption and ultimately higher cost of production. Nonetheless, the Speciality Alloys segment performance was good overall, which indicates stability and consistency within this segment.In 2019, Afarak gained full control in its South African mines. This resulted in a positive impact on the results in the second quarter.The main priorities for Afarak in 2020 are stability and consistency of operational and financial performance.”Helsinki, February 28, 2020Afarak Group PlcBoard of DirectorsFor additional information, please contact:Guy Konsbruck, CEO, +356 2122 1566, guy.konsbruck@afarak.comAfarak 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).Distribution:
NASDAQ Helsinki
London Stock Exchange
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www.afarak.comAttachmentAfarak_Quarterly_2019_Q4_EN_FINAL

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