AFARAK GROUP PLC'S FINANCIAL STATEMENTS REVIEW FOR 1 JANUARY - 31 DECEMBER 2016
February 17 2017 - 2:00AM
07:00 London, 09:00 Helsinki, 17 February 2017 -
Afarak Group Plc ("Afarak" or "the Company") (LSE: AFRK, OMX:
AFAGR) Interim Report
AFARAK GROUP PLC'S FINANCIAL STATEMENTS REVIEW FOR
1 JANUARY - 31 DECEMBER 2016
FULL YEAR HIGHLIGHTS
(January-December 2016)
Afarak's
performance in 2016 highlights its strong fundamentals. The Company
registered a positive operational result despite another
challenging year, particularly its first half. Nevertheless,
due to strategic planning and timely capital investments, the
Company was well-positioned to benefit from the market upswing
towards the end of the year.
Investor
highlights
- Capital redemption of EUR 2.6
(5.1) million approved and paid during the second quarter
- Capital redemption of EUR 2.6
(0.0) million approved and paid during the third quarter
Financial
highlights
- Revenue totalled EUR 153.6 (FY/2015: 187.7)
million
- EBITDA was EUR 5.5 (FY/2015: 17.2) million and
the EBITDA margin was 3.6% (FY/2015: 9.2%)
- EBIT was EUR -1.0 (FY/2015: 9.9) million and the
EBIT margin was -0.7% (FY/2015: 5.3%)
- Profit for the year from continuing operations
totalled EUR -2.8 (FY/2015: 7.8) million
- Cash flow from operations was EUR 9.0 (FY/2015:
12.5) million
- The Company repaid a total of EUR11.8 million of
its external debt resulting in a debt-to-equity ratio of 2.1%
(FY/2015: 8.2%)
Operational highlights
- Processed material sold decreased by 8.2% to
97,095 (FY/2015: 105,777) tonnes
- Full year ferrochrome production was reduced by
7.6% to 95,739 (FY/2015: 103,591) tonnes
- Tonnage mined decreased by 43.2% to 262,266
(FY/2015: 461,781) tonnes
Q4 HIGHLIGHTS (October-December 2016)
Afarak registered a stronger
performance in the fourth quarter on the back of a bullish
market.
Financial
highlights
- Revenue totalled EUR 44.4 (Q4/2015: 49.2)
million
- EBITDA increased by 16.2% to EUR 4.3 (Q4/2015:
3.7) million and the EBITDA margin was 9.6% (Q4/2015: 7.5%)
- EBIT increased by 50% to EUR 2.7 (Q4/2015: 1.8)
million and the EBIT margin was 6.1% (Q4/2015: 3.7%)
- Profit from continuing operations totalled EUR
1.7 (Q4/2015: 0.8) million
- Cash flow from operations was EUR 7.7 (Q4/2015:
0.4) million
- The Company repaid EUR 4.2 million of external
debt (Q4/2015: 2.6) million
Operational highlights
- The Company substituted low profit production for
higher yielding material. As a result, processed material
sold totalled 23,906 (Q4/2015: 31,137) tonnes
- Ferrochrome production was reduced by 21.1% to
22,833 (Q4/2015: 28,938) tonnes to optimise working capital
- Tonnage mined increased by 20.2% to 114,898
(Q4/2015: 95,587) tonnes
MARKET SENTIMENT FOR
Q1 2017
The prices of chrome ore and
ferrochrome are expected to remain strong in quarter one 2017,
positively affecting Afarak's financial performance. We expect
significantly better results in Q1 2017 compared to the Q1 2016
results.
DIVIDEND PROPOSAL
Due to the net loss for the year 2016, the Board of Directors will
propose to the Annual General Meeting, which will be held on 23 May
2017 that no capital redemption or dividend would be distributed.
In line with the Group's policy, distributions to shareholders will
be reviewed at the time of the half year announcement.
KEY FIGURES (EUR million) |
Q4/16 |
Q4/15 |
Change |
FY2016 |
FY2015 |
Change |
Revenue |
44.4 |
49.2 |
-9.7% |
153.6 |
187.7 |
-18.2% |
EBITDA |
4.3 |
3.7 |
|
5.5 |
17.2 |
|
EBITDA
margin |
9.6% |
7.5% |
|
3.6% |
9.2% |
|
EBIT |
2.7 |
1.8 |
|
-1.0 |
9.9 |
|
EBIT
margin |
6.1% |
3.7% |
|
-0.7% |
5.3% |
|
Earnings
before taxes |
1.5 |
0.5 |
|
-3.1 |
6.5 |
|
Earnings
margin |
3.4% |
0.9% |
|
-2.0% |
3.5% |
|
Profit from
continuing operations |
1.7 |
0.8 |
|
-2.8 |
7.8 |
|
Profit from
discontinued operations |
0.4 |
0.8 |
|
1.9 |
0.8 |
|
Profit |
2.0 |
1.6 |
|
-0.9 |
8.5 |
|
Earnings
per share, basic, EUR |
0.01 |
0.01 |
|
0.00 |
0.03 |
|
Commenting on the full year and
fourth quarter results of 2016, Guy Konsbruck, CEO, said:
"Throughout 2016, Afarak faced largely depressed market conditions,
affecting most chrome and ferrochrome producers. During the past
year, a good number of South African producers either went into
business rescue or reduced their ferrochrome output.
With prices gravitating downwards, our sales
volumes were hit hard, particularly in the speciality
segment. Our mining and production volumes were also lower
due to the closure of Mecklenburg, safety stoppages at the mines
and the temporary closure of Mogale Alloys. In response to these
conditions, Afarak focused its efforts on prudent capital
management, debt collection, optimising production, inventory
management - including the decision to temporarily stop production
in our German smelter EWW, which created an opportunity for
successful placing of TMS' chrome ore onto the higher priced market
during Q4.
In the second half of 2016, Afarak
confirmed its agility and responsiveness to expected market
conditions. With a recovery in market prices and a
strengthening in demand; Afarak was able to respond in a timely and
effective manner. As benchmark prices reached an eight-year
high in December, Afarak brought on stream three projects that
enabled it to benefit from the upswing. The Mogale plant is
now operating as a swing plant and switched one of its
silicomanganese furnaces to ferrochrome enabling better margins in
the current market. Mecklenburg restarted opencast mining and
the shaking table project at the Ilitha mine is now in full
production. These factors have allowed Afarak to register a
strong performance in the fourth quarter and confirmed the
Company's entrepreneurial nature in identifying and reaping
opportunities.
Strong prices are expected to remain in
quarter one 2017. It is however difficult to predict the longer
term outlook. Afarak will continue concentrating on its core
activity, ferrochrome specialties. We shall further strengthen our
in-house ore capacities, so as to be more independent from third
parties. We have created the basis to broaden our product range for
2017.
During my first month at Afarak I have
met and interacted with our team and was impressed by the
skill-sets and technical competence as well as the willingness to
improve processes and efficiency. On behalf of Afarak Group, I
would like to extend my thanks to all our colleagues who played an
important role in achieving this positive result in 2016 given the
external environment."
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 Q4/2016
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.afarak.com.
AFARAK GROUP PLC
Guy Konsbruck
CEO
For additional information, please
contact:
Afarak Group Plc
Guy Konsbruck, CEO, +356 2122 1566, Guy.Konsbruck@afarak.com
Predrag Kovacevic, CFO, +356 2122 1566,
pedja.kovacevic@afarak.com
Melvin Grima, Finance Director, +356 2122 1566,
melvin.grima@afarak.com
Jean Paul Fabri, PR & Communications Manager, +356 2122 1566,
jp.fabri@afarak.com
Financial reports and other investor information
are available on the Company's website: www.afarak.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 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
The information contained within
this announcement is deemed by the Company to constitute inside
information as stipulated under the Market Abuse Regulations (EU)
No. 596/2014 ('MAR'). Upon the publication of this announcement via
Regulatory Information Service ('RIS'), this inside information is
now considered to be in the public domain.
Afarak FY 2016_EN
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Afarak Group via Globenewswire
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