AFARAK GROUP SE: FINANCIAL STATEMENTS RELEASE 2022
24/02/2023 07:45
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07:45 London, 09:45 Helsinki, 24 February 2023 - Afarak Group
SE ("Afarak" or "the Company") (LSE: AFRK, NASDAQ: AFAGR)
FINANCIAL STATEMENTS RELEASE 2022
A RECORD YEAR FOR AFARAK
H2/2 2 H2/2 1 FY202 2 FY202 1
Revenue EUR million 106.6 42.9 198.7 80.3
EBITDA EUR million 29.2 6.8 53.7 5.9
EBIT EUR million 28.2 5.9 52.3 6.8
Earnings before taxes EUR million 26.6 3.4 49.2 2.9
Profit from continuing operations EUR million 23.5 1.5 44.7 0.6
Profit from discontinued operations EUR million 0.0 8.4 2.9 8.4
Profit for the period EUR million 23.5 9.9 47.6 9.0
Earnings per share EUR 0.09 0.04 0.19 0.04
EBITDA margin % 27.4 15.9 27.1 7.4
EBIT margin % 26.5 13.8 26.3 8.5
Earnings margin % 24.9 7.8 24.8 3.6
Personnel (end of period) 600 503 600 503
SECOND HALF 2022 HIGHLIGHTS
* Revenue for the second half of 2022 increased sharply to EUR 106.6 (H2/2021:
42.9) million driven by stronger market demand and higher prices;
* Speciality Alloys processed material sold decreased by 14.4%, to 9,997
(H2/2021: 11,680) tonnes;
* Tonnage mined increased by 88.7%, to 93,253 (H2/2021: 49,428) tonnes;
* Group’s EBITDA increased to EUR 29.2 (H2/2021: 6.8) million and the EBITDA
margin stood at 27.4% (H2/2021: 15.9%);
* EBIT was EUR 28.2 (H2/2021: 5.9) million and the EBIT margin stood at 26.5%
(H2/2021: 13.8%);
* Profit for the period from continuing operation totalled EUR 23.5 (H2/2021:
1.5) million;
* Cash flow from operations during H2 2022 was EUR 21.1 (H2/2021: 15.0)
million.
* The interest-bearing debt of the Group reduced significantly to EUR 2.2 (31
December 2021: 38.5) (30 June 2022: 26.4) million;
* Cash and cash equivalents at 31 December totalled EUR 12.4 (31 December
2021: 6.3) (30 June 2022: 5.0) million.
FULL YEAR 2022 HIGHLIGHTS
* The Group revenue has grown substantially during the reporting period,
reflecting both higher sales volumes as well as improved prices;
* Speciality Alloys Processed material sold increased by 11.3%, to 26,085
(FY/2021: 23,442) tonnes;
* Tonnage mined increased by 28.5%, to 132,362 (FY/2021: 102,970) tonnes;
* EBITDA during the year increased to EUR 53.7 (FY/2021: 5.9) million. EBIT
stood at EUR 52.3 (FY/2021: 6.8) million;
* The result of the discontinued operation was EUR 2.9 (FY/2021: 8.4) million;
* Profit for the full year 2022 totalled EUR 47.6 (FY/2021: 9.0) million.
MARKET SENTIMENT FOR 2023
CRU Monitor expects the global demand for Stainless Steel to increase by 3% in
2023, which is an improvement compared to 2022, even though the purely
European demand is set to decline during the same period.
The demand for regular grades of low carbon ferro-chrome, after being very
sustained during the first 3 quarters of 2022, showed some decline during Q4.
As a consequence, prices dropped during Q4, mainly due to the pressure of
Chinese imports.
A good portion of Afarak’s specialty alloys is widely used for more specific
applications (aeronautics, medical, energy).
Plane makers reported a sharp jump in both new plane deliveries and new orders
during 2022. This came during a time where strategic raw material supply
chains were stretched and inventories low. This resulted in a rapid recovery
in price and demand for raw materials used in aerospace grades of steel.
The forecast for new plane builds is positive for the next several years as is
demand for other high temp alloys used in the medical and energy sectors.
The main global factor will be the speed of recovery of the Chinese economy,
as well as the evolution of the Russian war in Ukraine.
CEO GUY KONSBRUCK
Dear Shareholders,
I am proud to present to you the results of AFARAK’s second HY 2022, which
reflects the excellent achievements of our teams.
The safety of our staff will always remain our top priority. We had to deplore
1 fatal accident in one of our Turkish mines in 2022. Although the
investigation showed no major deficiencies in our set-up, our clear goal
remains to provide secure working conditions to all our colleagues.
The terrible earthquake in Turkey did not impact our mining operations
directly, but we were all shocked by the magnitude of the casualties. Several
of our teams went into the affected area helping to search for survivors. I
wish to thank them for their courageous commitment.
During H2/22, AFARAK continued to perform exceedingly well, although the
business conditions remained challenging. The unlawful and ruthless Russian
attack on Ukraine and all its economic consequences on the Western world have
created a new layer of complexity to all businesses shortly after the pandemic
crisis. This is particularly true for the commodities used in steel making
which has a strong dependence on Russian products.
Afarak is not producing in Russia and does not use any raw materials from
Russia.
After initial spikes, the market prices for regular grades saw downwards
corrections after the summer holiday, and we had to face increasing energy and
raw material cost. Afarak adapted the output of regular grades, and
concentrated more on high quality alloys.
We are further developing new efficiencies and working on various solutions to
reduce our exposure to fluctuating energy cost.
Afarak has resumed a more sustained mining activity in South Africa during H2
2022, which showed first positive results.
AFARAK will also maintain a strong focus on sustainability, where we pursue
several projects of waste reduction, and further reduction of our CO2 foot
print.
The main message to take home, though, is that 2022 has seen the best result
in the history of AFARAK, which has allowed us to repay all of our long term
debt. AFARAK can now count on a strong balance sheet to pursue future growth
and diversification opportunities.
Helsinki, February 24, 2023
Afarak Group SE
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
Attachment
* Afarak_Release_FY 2022_EN
(https://ml-eu.globenewswire.com/Resource/Download/a1621011-d84b-423d-bfb6-6e344dd249d4)