AFARAK GROUP SE: FINANCIAL STATEMENTS RELEASE 2023
23/02/2024 09:41
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09:45 London, 11:45 Helsinki, 23 February 2024 - Afarak Group
SE ("Afarak" or "the Company") (LSE: AFRK, NASDAQ: AFAGR)
FINANCIAL STATEMENTS RELEASE 2023
H2/23 H2/22 FY2023 FY2022
Revenue EUR million 58.3 106.6 153.7 198.7
EBITDA EUR million 1.5 29.2 16.6 53.7
EBIT EUR million 0.6 28.2 15.0 52.3
Earnings before taxes EUR million -0.2 26.6 12.0 49.2
Profit from continuing operations EUR million -0.5 23.5 10.0 44.7
Profit from discontinued operations EUR million 0.0 0.0 0.0 2.9
Profit for the period EUR million -0.5 23.5 10.0 47.6
Earnings per share EUR 0.00 0.09 0.04 0.19
EBITDA margin % 2.5 27.4 10.8 27.1
EBIT margin % 1.2 26.5 9.8 26.3
Earnings margin % -0.3 24.9 7.8 24.8
Personnel (end of period) 595 600 595 600
SECOND HALF 2023 HIGHLIGHTS
* Revenue for the second half of 2023 decreased to EUR 58.3 (H2/2022: 106.6)
million;
* Speciality Alloys processed material sold decreased by 23.5%, to 7,854
(H2/2022: 10,880) tonnes;
* Tonnage mined increased significantly by 86.2%, to 173,629 (H2/2022: 93,253)
tonnes;
* Group’s EBITDA decreased to EUR 1.5 (H2/2022: 29.2) million and the EBITDA
margin stood at 2.5% (H2/2022: 27.4%);
* EBIT was EUR 0.6 (H2/2022: 28.2) million and the EBIT margin stood at 1.2%
(H2/2022: 26.5%);
* Loss for the period totalled EUR -0.5 (H2/2022: Profit 23.5) million;
* Cash flow from operations during H2 2023 was EUR 1.3 (H2/2022: 21.1)
million;
* The interest-bearing debt of the Group remained at the same level at EUR 3.1
(31 December 2022: 2.2) (30 June 2023: 3.8) million;
* Cash and cash equivalents at 31 December totalled EUR 18.0 (31 December
2022: 12.4) (30 June 2023: 19.9) million.
FULL YEAR 2023 HIGHLIGHTS
* The Group revenue was lower compared to prior year EUR 153.7 (198.7)
million;
* Speciality Alloys Processed material sold increased by 20.6%, to 20,709
(FY/2022: 26,085) tonnes;
* Tonnage mined increased by 154.3%, to 336,601 (FY/2022: 132,362) tonnes;
* EBITDA during the year decreased to EUR 16.6 (FY/2022: 53.7) million. EBIT
stood at EUR 15.0 (FY/2022: 52.3) million;
* Profit for the full year 2023 totalled EUR 10.0 (FY/2022: 47.6) million.
MARKET SENTIMENT FOR 2024
The Indian and Chinese in-flows seem to be reducing, due to high logistics
cost (cf. Suez Canal situation), and somewhat stronger internal demands. Hence
we foresee a slightly more friendly market outlook, at least for the first
quarter 2024. The interest rates should also reduce over 2024.
Afarak has been for many years now the only Western producer of low carbon
ferro-chrome, a critical material for the production of the Aerospace,
Automotive, Green energies, and various other industries.
We had to reduce our output of standard grades, as we could not produce and
sell those in an economically responsible way, but we continue to improve our
productivity and efficiency, so as to cope better and better with adverse
market conditions. We expect the margin pressure to continue, at least through
H1/2024, due to the weak state of the stainless steel industry, mostly in
Europe.
DIVIDEND PROPOSAL
The Board of Directors will propose a new dividend policy to the Annual
General Meeting,. The Group will in future review its distributions to
shareholders either through a capital redemption or dividend. The target
dividend payout ratio in respect to each financial year shall be minimum 10%
(ten percent) of the Afarak Group's EBITDA per full year. This new policy will
allow the board to take prudent decisions based on market conditions whilst
continuing to share its positive results with shareholders.
CEO GUY KONSBRUCK
In our previous release we stated:
“For H2 we foresee an ongoing challenging market environment, with further
weak global market prices, combined with low demand. A lot will depend on the
central banks inflation strategy, the recent government policies such as the
US Inflation Reduction Act, the EU’s proposed Green Deal and the further
development of the present geo-political tensions both in Europe and
South-East Asia as well.”
We were proven right. The second half year 2023 was characterized by very
sluggish markets and serious pressure on prices by the Russian imported
material as well as the strong pressure of other imported materials from India
and China. It took until the very end of 2023 for the EU, to put imports of
Russian ferroalloys on the sanction list. Our margins were also impacted by
high interest rates and freight cost. Nevertheless, we continued to be
profitable and cash positive.
As expected, the ferro-alloys segment continued to perform well and improved
the group’s profitability.
We expect further positive developments in this segment for 2024.
We have been driving forward the drilling and exploration work in our
Magnochrome plant and expect a complete and updated feasibility study by end
of May 2024.
With all above in mind, we are still presenting in 2023 one of the best
results in AFARAK’s history, which is largely an achievement of my ever so
committed colleagues and EMT members.
I wish to thank each and every one for their great work.
Helsinki, February 23, 2024
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 2023_EN
(https://ml-eu.globenewswire.com/Resource/Download/14085173-e172-4e6a-b1f0-7b3f5836aa20)