Arafak posts strong Q2 results

JOHANNESBURG (miningweekly.com) – Nasdaq- and LSE-listed Afarak Group has delivered another robust second quarter driven by continued higher ferrochrome prices and strong market fundamentals.

This followed a positive start to the new financial year after Arafak achieved the highest quarterly gains in the company’s history during the first quarter.

“Afarak continued to achieve solid and robust results in 2017. In quarter two, we achieved another positive result with earnings before interest, taxes, depreciation and amortisation (Ebitda) reaching €4.8-million, up from €800 000 a year earlier,” said Arafak CEO Guy Konsbruck.

The group’s Ebitda margin was 10.2% during the quarter under review, up from 2% in the corresponding period the year before, while earnings before interest and taxes (Ebit) turned positive, reaching €3.3-million, with an Ebit margin of 7%.

Profit for the period from continuing operations totalled €1.4-million during the second quarter of this year, compared with a loss of €1-million in the second quarter of 2016.

Second-quarter revenue increased 20% year-on-year to €47.4-million.

Looking forward, Konsbruck warned, however, that the seasonally slower market, decreased ferrochrome prices and negative effects of exchange rate movements were expected to contribute to a lower performance during the third quarter.

“Although the third quarter reflects the seasonal slowdown, we still expect improved performance in the third quarter, compared to a year earlier,” he said.

“All in all, we expect a stable continuation of our business in 2017 and further benefits from our change management initiatives throughout the company.”

Afarak’s cash and cash equivalents reached €11.7-million as at June 30.

An extraordinary capital distribution of €0.02 a share and a total of €5.2-million had been paid to shareholders during the second quarter.

The vertically integrated producer of speciality alloys has mining operations in South Africa, Zimbabwe and Turkey and processing operations in South Africa and Germany.