PROFIT WARNING: AFARAK GROUP EXPECTS A NEGATIVE...

17.00 London, 18.00 Helsinki, May 4, 2018 - Afarak Group Plc ("Afarak" or "the Company")

PROFIT WARNING: AFARAK GROUP EXPECTS A NEGATIVE RESULT IN QUARTER ONE

As indicated in our previously published market sentiment for the first quarter of 2018, a range of market-induced factors affected the profitability of operations during the period and the Company currently expects to post a negative EBITDA in the broad region of €1 million for the quarter.

Following a 30% drop in the charge chrome benchmark price from a year earlier on one side, and the significantly increased prices of raw materials, graphite electrodes and ferrosilicon on the other, profitability was further hindered by weakening of the US dollar combined with a strengthening of the South African Rand. In addition, several technical issues, including breakdowns and temporary stoppages of processing equipment in our South African mining operations, caused lower production outputs, ultimately affecting raw material supply to Mogale, as well as revenues from sales of chrome ore to the market.  

Amid those negative market factors, management took measures to minimise the costs, hedge the foreign exchange exposures and, where appropriate, postpone the sales of the materials, thus gearing towards exploiting the better market conditions anticipated in the second quarter.

Looking ahead, the benchmark price for quarter two rebounded by 20% from that in quarter one, albeit still lower than that a year earlier. This is expected to support a positive quarter two result on the back of higher sales prices and volumes.

Afarak will publish its interim report for the first quarter of 2017 on May 11^th, 2018.

Afarak Group plc

The Board of Directors

For additional information, please contact:

Afarak Group Plc

Guy Konsbruck, CEO, [phone], [e-mail]

Jean Paul Fabri, [phone], [e-mail]

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).

Distribution:

NASDAQ Helsinki

London Stock Exchange

Main media

www.afarak.com

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Source: Afarak Group via Globenewswire