13:00 London, 15:00 Helsinki, 29 November 2019 - Afarak Group Plc ("Afarak" or "the Company") (LSE: AFRK, NASDAQ: AFAGR)
AFARAK GROUP: INTERIM REPORT Q3/2019
TOUGH QUARTER FOR AFARAK
Low market prices and slow demand cause further losses in the FerroAlloys segment while the Speciality Alloys segment performance was at the same level as last year.
Q3/19 | Q3/18 | Q1-3/19 | Q1-3/18 | 2018 | ||
Revenue | EUR million | 33.6 | 42.6 | 116.3 | 147.0 | 194.0 |
EBITDA | EUR million | -4.5 | -2.5 | -17.4 | -2.0 | -1.0 |
EBIT | EUR million | -10.1 | -4.3 | -47.8 | -7.1 | -14.1 |
Earnings before taxes | EUR million | -14.6 | -4.0 | -46.4 | -9.8 | -18.5 |
Profit | EUR million | -16.3 | -2.8 | -45.5 | -7.4 | -18.6 |
Earnings per share | EUR | -0.06 | -0.01 | -0.17 | -0.03 | -0.07 |
EBITDA margin | % | -13.5 | -5.9 | -15.0 | -1.4 | -0.5 |
EBIT margin | % | -29.9 | -10.0 | -41.1 | -4.8 | -7.3 |
Earnings margin | % | -43.4 | -9.4 | -39.9 | -6.7 | -9.6 |
Personnel (end of period) | 1,011 | 942 | 1,011 | 942 | 942 |
QUARTER THREE 2019 HIGHLIGHTS
QUARTER ONE TO QUARTER THREE 2019 HIGHLIGHTS
MARKET SENTIMENT FOR THE FOURTH QUARTER 2019
The market remains weak for the FerroAlloys segment as the charge chrome benchmark price, for quarter four dropped further from USD 104 c/lb in quarter three to USD 102 c/lb. Selling prices in the Speciality Alloys segment are expected to also be lower during the fourth quarter of 2019.
CEO GUY KONSBRUCK
As previously anticipated the third quarter was another challenging quarter for Afarak.
The Speciality Alloys segment performed well during the quarter. The declining pricing environment constrained the financial performance, but by right-sizing of the production base, and improving our cost profile, the company succeeded to have a good performance, given the market circumstances.
In the FerroAlloys segment, we adapted to an even worse slowdown in demand and declining pricing environment, by further reducing our output. Unfortunately, a generally negative short-term trend in the stainless steel industry, combined with over-supply situation of both chrome ore and ferrochrome has been delaying a possible turnaround. The company continues its focus on cost reduction and cash preservation throughout the group, during this soft market phase.
The long-term prospects for stainless steel and also the ferrochrome industry remain solid. All South African and other ferrochrome producers are today under serious pressure and many have already reacted, like Afarak, with production cutbacks, which eventually should lead to a resolution of the over-supply situation. The business environment in South Africa remains challenging and Afarak, together with other smelting and mining companies, continues to seek support from the government to reduce energy cost; improve energy availability; and provide protection from low-cost producers via duties on chrome ore exports. A quick improvement is not to be expected so far.
In our Serbian Magnesite Asset, we have completed the refurbishment of the ore beneficiation plant. The restart of the rotary kiln is delayed to the end of 2020, due to some unexpected technical setbacks.
Afarak Group Plc
Board of Directors
For additional information, please contact:
Guy Konsbruck, CEO, +356 2122 1566, guy.konsbruck@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).
Distribution:
NASDAQ Helsinki
London Stock Exchange
Main media
www.afarak.com
1 The Company is conducting an appeal against this fine
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