AFARAK GROUP PLC'S INTERIM REPORT FOR 1 APRIL -...

07:00 London, 09:00 Helsinki, 15 August 2013 - Afarak Group Plc ("Afarak" or "the Company") (LSE: AFRK, OMX: AFAGR) Interim Report

AFARAK GROUP PLC'S INTERIM REPORT FOR 1 APRIL - 30 JUNE 2013

Q2 HIGHLIGHTS (April-June 2013):

- Revenue increased by 1.4% to EUR 31.4 (Q2/2012: 31.0) million
- Sales from processed products decreased by 14.9% to 10,689 (Q2/2012: 12,567) tonnes
- EBITDA was EUR 6.2 (Q2/2012: 1.6) million and the EBITDA margin was 19.6% (Q2/2012: 5.0%)
- EBIT was EUR 0.0 (Q2/2012: -4.8) million
- Profit for the period totalled EUR -1.8 (Q2/2012: -2.3) million
- Production increased by 120.9% to 163,878 (Q2/2012: 74,181) tonnes
- Cash flow from operations was EUR 4.8 (Q2/2012: 14.4) million and liquid funds at 30 June were
 EUR 17.7 (30 June 2012: 44.3) (31 March 2013:17.5) million
- The Group updates its Outlook for 2013 due to signs of the increase in demand for commodities

KEY FIGURES (EUR million)	Q2/13	Q2/12	Change	H1/13	H1/12	Change	FY/12
Revenue	31.4	31.0	1.4%	63.0	76.5	-17.7%	128.6
EBITDA	6.2	1.6	296.6%	10.3	4.7	119.9%	9.2
EBITDA margin	19.6%	5.0%		16.4%	6.1%		7.2%
EBIT	0.0	-4.8		-2.0	-8.4		-16.8
EBIT margin	0.1%	-15.4%		-3.2%	-10.9%		-13.0%
Earnings before taxes	-2.5	-4.2		-5.3	-6.3		-19.6
Earnings margin	-8.0%	-13.5%		-8.4%	-8.2%		-15.2%
Profit	-1.8	-2.3		-1.9	-4.3		-16.6
Earnings per share, basic, EUR	-0.01	-0.01		-0.01	-0.01		-0.06

Commenting on the second quarter results, Danko Koncar, CEO, said:

"I am pleased to report that the positive trend started in Q1 has continued into the second quarter. There is a significant improvement compared to the same period last year and in the second quarter we have managed an improvement over last year's revenue despite the lower sales and difficult market conditions. We were also able to increase profitability and generate positive cash flow. This was achieved by focusing on value added speciality products, increase in the sales of ferrochrome, increased mining production and lowering our cost base. This improved revenue allowed us to pay a EUR 0.01 capital redemption per share to our shareholders in May this year and to shift our focus to new investment opportunities.

Regardless of the processing volumes being lower in the second quarter compared to the equivalent period last year, we secured a higher margin. Despite the fact that the ferrochrome market remains difficult to predict, we have seen some positive growth in that segment.

In the longer term I firmly believe that ferrochrome, particularly the speciality and super alloys segment, will again be in high demand. At the same time we are not waiting for the market to change, but are continuously evaluating different initiatives that could strengthen our position and provide new growth opportunities.

In addition we have significantly restructured our organisation and the way we work to streamline costs. Our focus remains on generating cash and increasing profits. The Company has also changed its name and we now are operating under the name Afarak Group plc."

2013 outlook

The global economic outlook continues to be uncertain in 2013.  Despite the Eurozone crisis continues, there are signs of an increase in the demand for commodities. The ferroalloy market however, is still expected to continue to be volatile during the year with signs of improvement expected at the end of the year or the first quarter of next year. The Group is preparing for significant price fluctuations and will continue to adapt its production levels accordingly. The Company is also continuing its cost saving initiatives and restructuring of functions and this is expected to bring material costs savings in 2013 compared to previous financial year. In light of this the Group expects its financial performance for the full year 2013 to significantly improve compared to 2012.

Fluctuations of exchange rates between the Euro, the South African Rand, the Turkish Lira and the US Dollar can significantly impact the Company's financial performance.

The previous outlook, published in the first quarter interim results on 8 May 2013, was:

The global economic outlook continues to be uncertain in 2013 as the Eurozone crisis continues and demand for commodities, primarily driven by Chinese consumption, remains weak. The ferroalloy market is expected to continue to be volatile during the year. The Group is preparing for significant price fluctuations and will continue to adapt its production levels accordingly. At Mogale Alloys, part of the FerroAlloys division, the decision has been taken to participate in Eskom's electricity buyback program. The Company is also continuing its cost saving initiatives and restructuring of functions and this is expected to bring material costs savings in 2013 compared to previous financial year. In light of this the Group expects its financial performance for the full year 2013 to significantly improve compared to 2012.

Fluctuations of exchange rates between the Euro, the South African Rand, the Turkish Lira and the US Dollar can significantly impact the Company's financial performance.

Disclosure procedure

Afarak follows the disclosure procedure enabled by Disclosure obligation of the issuer (7/2013) published by the Finnish Financial Supervision Authority, and hereby publishes its Q2/2013 interim report enclosed to this stock exchange release. The Interim Report is attached to this release and is also available on the Company's website at www.afarakgroup.com.

Investor Conference Call

Management will host an investor conference call in English on 15 August 2013 at 14.00 Finnish time, 12.00 UK time. Please dial-in at least 10 minutes beforehand, quoting the reference: 44732.       

Finnish number [phone]

UK number [phone]

AFARAK GROUP PLC
Danko Koncar
CEO


For additional information, please contact:

Afarak Group Plc
Danko Koncar, CEO, [phone], [e-mail]

Investec Bank Plc
Jeremy Wrathall, [phone]
George Price, [phone]

Financial reports and other investor information are available on the Company's website: www.afarakgroup.com.

Afarak Group is a chrome mining and minerals producer focused on delivering sustainable growth with a speciality alloys business in southern Europe and a ferro alloys business in southern Africa. The Company is listed on NASDAQ OMX Helsinki (AFAGR) and the Main Market of the London Stock Exchange (AFRK).
www.afarakgroup.com

Distribution:
NASDAQ OMX Helsinki
London Stock Exchange
main media
www.afarakgroup.com

Q2

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Source: Afarak Group via Thomson Reuters ONE

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