Proactiveinvestors United Kingdom Afarak Group PLC https://www.proactiveinvestors.co.uk Proactiveinvestors United Kingdom Afarak Group PLC RSS feed en Tue, 18 Jun 2019 10:17:39 +0100 http://blogs.law.harvard.edu/tech/rss Genera CMS action@proactiveinvestors.com (Proactiveinvestors) action@proactiveinvestors.com (Proactiveinvestors) <![CDATA[News - Afarak tries to distance itself from row between major shareholder and Finnish authorities ]]> https://www.proactiveinvestors.co.uk/companies/news/222240/afarak-tries-to-distance-itself-from-row-between-major-shareholder-and-finnish-authorities-222240.html Afarak Group PLC (LON:AFRK) reiterated on Monday that it has nothing to do with a dispute between its largest shareholder and Finnish authorities.

Danko Koncar, a major shareholder of Afarak through his controlled entity Kermas Ltd., has been appealing a ruling by the Helsinki Administrative Court to uphold the Finnish Financial Supervisory Authority's (FSA) decision to force him to make a public bid for shares in Afarak.

The FSA has accused Koncar and the entities controlled by him of acting in concert with Hino Resources Co. Ltd, Finaline Business Limited and Koncar's spouse Jelena Manojlovic in order to exercise control over Afarak.

READ: Afarak expresses relief as special audit of accounts better than feared

The Helsinki court ruled that Kermas and Hino Resources’ shares in Afarak exceeded the 30% maximum required to launch a full takeover bid for the business on October 22, 2009, and that Koncar was the party that needed to make the offer.

Last July, the FSA had fined Koncar, who was chief executive of Afarak for two years until 2015, €40,000 for his alleged non-compliance.  

On Friday, the regulator ordered him to pay €110,000 in accrued supplementary amounts of the fine.

“The supplementary amounts of the conditional fine were ordered payable since Koncar has failed to publish a bid for shares in Afarak Group PLC or to present a valid reason for non-compliance with the obligation,” it said.

The FSA said the fine is not legally binding and Koncar has the right to appeal the decision to the Helsinki Administrative Court.

Afarak was required by the FSA to inform its shareholders about the news.

In its statement, Afarak said: “The company has stated many times before and is reiterating again that it is not related in any form to the difference between Finnish Financial Services Authority and Dr Koncar.”

It added that it had been informed by Koncar that, “this further decision is not legally binding and will be appealed by our attorneys, as has been the case with all previous decisions of the Finnish Financial Services Authority in this matter.”

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Mon, 17 Jun 2019 13:53:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/222240/afarak-tries-to-distance-itself-from-row-between-major-shareholder-and-finnish-authorities-222240.html
<![CDATA[RNS press release - AFARAK RECEIVES DECISION FROM FIN-FSA RELATING TO DANKO KONCAR ]]> https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000197981-en/ Mon, 17 Jun 2019 13:08:06 +0100 https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000197981-en/ <![CDATA[RNS press release - Supplement to the offer document by Afarak Group PLC dated June 7 2019 regarding the public tender offer for own shares ]]> https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000197627-en/ Fri, 14 Jun 2019 09:38:08 +0100 https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000197627-en/ <![CDATA[News - Afarak insists plans to scale back Mogale output won't affect buy-back or financing ]]> https://www.proactiveinvestors.co.uk/companies/news/222073/afarak-insists-plans-to-scale-back-mogale-output-won-t-affect-buy-back-or-financing-222073.html Afarak Group PLC (LON:AFRK) has reassured investors that its decision to scale back production at its Mogale operations in South Africa would not affect its planned share buy-back or financing.

On Wednesday the chrome producer said it would shut down some of its production at the Mogale plant after coming under pressure from falling ferrochrome prices and rising energy costs in South Africa.

READ: Afarak to scale back production at Mogale operations amid challenging headwinds

The group has decided to halt the use of two submerged arc furnaces at its Mogale smelter.

In a Thursday statement, Afarak said it expects the temporary shut-down to keep losses from Mogale operations “contained”.

“However, due to several variables affecting the financial outcome of this shut-down, it is impossible to quantify the effect,” it said.

“The results will be seen during second half of the year 2019.”

Afarak insisted that the changes in the production “do not affect the buy-back or its financing”

In late 2018, Afarak announced that it would offer shareholders €1.015 per share to buy back its stock after investors voted in favour of the proposal at an extraordinary general meeting.

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Thu, 13 Jun 2019 14:45:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/222073/afarak-insists-plans-to-scale-back-mogale-output-won-t-affect-buy-back-or-financing-222073.html
<![CDATA[RNS press release - Changes in Production do not affect the buy-back ]]> https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000197495-en/ Thu, 13 Jun 2019 14:31:19 +0100 https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000197495-en/ <![CDATA[News - Afarak to scale back production at Mogale operations amid challenging headwinds ]]> https://www.proactiveinvestors.co.uk/companies/news/221965/afarak-to-scale-back-production-at-mogale-operations-amid-challenging-headwinds-221965.html Afarak Group PLC (LON:AFRK) plans to scale back production at its Mogale operations in South Africa amid weak ferrochrome markets.

Ferrochrome prices have been falling, in part due to concerns surrounding an ongoing trade dispute between the US and China.

Rising energy costs in South Africa has also posed a problem for Afarak in achieving a good performance at its Mogale smelter.

READ: Afarak first quarter impacted by weaker chrome market

Afarak blamed a tough ferrochrome market for a wider first-quarter loss in a May trading update.

In an update on Wednesday, the company said the challenges in its South African operations have persisted since its first quarter results.

In response, the group has decided to halt the use of two submerged arc furnaces at its Mogale smelter.

The Mogale smelter will only operate its 40 MVA plasma furnace for plasma charge chrome to produce about 4,000 metric tonnes per month, as well as the convertor for medium carbon ferrochrome for production of 1,400 metric tonnes per month.

“As we have previously indicated, it has proven challenging to mitigate the headwinds that our operations at Mogale have faced for some time,” said chief executive Guy Konsbruck.

“Falling world market prices for our products, largely caused by the uncertainties around the US-China trade war and the sky-rocketing energy costs in South Africa have forced us to review our strategy and reduce our output. 

“We have fought very hard to avoid this step, but given the losses recently generated at Mogale, and the absence of any signs of state support for the industry, we had no other choice.”

Konsbruck said the company has started talks with the workers union to fund a solution to safeguard the asset and save as many jobs as possible.

All existing sales contracts will be honoured, he said.

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Wed, 12 Jun 2019 10:58:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/221965/afarak-to-scale-back-production-at-mogale-operations-amid-challenging-headwinds-221965.html
<![CDATA[RNS press release - PRODUCTION GUIDANCE & OPERATIONAL UPDATE ON FERRO-ALLOY SEGMENT ]]> https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000197261-en/ Wed, 12 Jun 2019 10:12:56 +0100 https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000197261-en/ <![CDATA[RNS press release - AFARAK GROUP PLC’S PUBLIC TENDER OFFER FOR OWN SHARES WILL COMMENCE ON JUNE 10, 2019. THE OFFER PRICE FOR A SHARE IS EUR 1.015 ]]> https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000196720-en/ Fri, 07 Jun 2019 15:44:43 +0100 https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000196720-en/ <![CDATA[News - Afarak expresses relief as special audit of accounts better than feared ]]> https://www.proactiveinvestors.co.uk/companies/news/221741/afarak-expresses-relief-as-special-audit-of-accounts-better-than-feared-221741.html Afarak Group PLC (LON:AFRK) breathed a sigh of relief after Finnish authorities ordered a special audit of the chrome producer's accounts that was not as bad as feared.

The Regional State Administrative Agency for Southern Finland has ordered Idman Vilån Grant Thornton Oy to conduct the audit of Afarak’s accounts for financial periods between 2015 and 2018.

READ: Afarak Group updates investors as Helsinki court rules on shareholder case

The auditor will look at the business and legal transactions conducted by Danko Koncar, chief operating officer of Afarak, which is listed in London and Helsinki.

Danko appeals court ruling 

Koncar, who was chief executive of the company for two years until 2015, is appealing a ruling by the Helsinki Administrative Court to uphold the Financial Supervisory Authority's (FSA) decision to force him to make a public bid for shares in Afarak.

Koncar is a major shareholder of Afarak through his controlled entity Kermas Ltd.

READ: Chrome producer Afarak mulls Helsinki de-listing

The FSA had accused Koncar and the entities controlled by him for acting in concert with Hino Resources Co. Ltd, Finaline Business Limited and Koncar's spouse Jelena Manojlovic in order to exercise control in Afarak.

The Helsinki court ruled that Kermas and Hino Resources’ shares in Afarak exceeded the 30% maximum required to launch a full takeover bid for the business on October 22, 2009, and that Koncar was the party that needed to make the offer.

In June 2018, certain minority shareholders of the company submitted an application to the Regional State Administrative Agency for Southern Finland to conduct a special audit.

Afarak said on Friday that the agency found that the application discloses “weighty reasons for reviewing the regularity of transactions made with all companies potentially belonging to the immediate circle of Mr Danko Koncar”.

In other respects, however, the Regional State Administrative Agency has rejected the applicants' claims, the company said.

Audit won't cause significant cost burdens, says CEO 

Afarak chief executive, Guy Konsbruck, said: “We are pleased that a decision has now been given and that the audit is limited so that it that does not cause the company significant cost burdens or burden human resources.

“Out of many accusations by the applicants only this one issue was seen to give reason for special audit.

He said the decision gives the company comfort that it is “very well in compliance” with its corporate governance rules.

Konsbruck said the company’s view is that the transactions described do not exist but the matter is now under review.

“We will be cooperating with the auditor to ensure an expeditious auditing process and we are hoping that the Special audit is carried out as soon as possible,” he said.

“In accordance with the Companies Act, shareholders will be informed of the results of the audit in due time.”

In a separate announcement, Afarak also said that the public tender offer for a maximum of 26mln of its own shares will commence on June 10 2019, and expire on 1 July, with the offer price set at €1.015 per share.

 -- Adds tender offer announcement --

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Fri, 07 Jun 2019 15:35:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/221741/afarak-expresses-relief-as-special-audit-of-accounts-better-than-feared-221741.html
<![CDATA[RNS press release - AFARAK GIVEN DECISION ON SPECIAL AUDIT ]]> https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000196696-en/ Fri, 07 Jun 2019 14:00:34 +0100 https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000196696-en/ <![CDATA[News - Afarak secures funding with combination of an chrome ore off-take agreement, several financing deals ]]> https://www.proactiveinvestors.co.uk/companies/news/221188/afarak-secures-funding-with-combination-of-an-chrome-ore-off-take-agreement-several-financing-deals-221188.html Afarak Group PLC (LON:AFRK) said late on Wednesday that it has made agreements regarding its funding after securing the combination of an off-take agreement for chrome ore and several financing deals.

Under the off-take agreement, the group said it will deliver goods from its South African mines from July 2019 to July 2023 and against these deliveries will receive a prepayment for the goods.

READ: Afarak Group to issue new shares to increase interests in South Africa assets

In addition, Afarak added, it has made several financing agreements at standard market terms for the industry.

Through the above arrangements, the company said it will have secured ample funding to proceed with the repurchase of shares as well as ensuring a satisfactory conduct of the regular business operations.

It added that the authorisation to execute a public tender offer for its own share was conditional, among other things, on funding with acceptable terms and conditions and it said this condition has now been met.

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Thu, 30 May 2019 07:36:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/221188/afarak-secures-funding-with-combination-of-an-chrome-ore-off-take-agreement-several-financing-deals-221188.html
<![CDATA[RNS press release - Invitation to the Annual General Meeting ]]> https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000195238-en/ Wed, 29 May 2019 16:22:59 +0100 https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000195238-en/ <![CDATA[RNS press release - Repurchase of own shares ]]> https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000195237-en/ Wed, 29 May 2019 16:18:04 +0100 https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000195237-en/ <![CDATA[RNS press release - Afarak secures funding for repurchase of shares ]]> https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000195235-en/ Wed, 29 May 2019 16:11:58 +0100 https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000195235-en/ <![CDATA[News - Afarak Group to issue new shares to increase interests in South Africa assets ]]> https://www.proactiveinvestors.co.uk/companies/news/221115/afarak-group-to-issue-new-shares-to-increase-interests-in-south-africa-assets-221115.html Afarak Group PLC (LON:AFRK) has told investors it will issue new equity as part of transactions to increase its ownership stake in a number of South African mining assets.

In total, the company will be issuing 2.12mln new shares. They can be issued within existing shareholder authorisations and the agreements are not expected to have any major impact on Afarak or its business.

READ: Afarak Group to become a ‘European company’

“Due to the relevantly modest size of the transactions and the fact that the company is increasing its ownership in assets that it already controls, the company is not expecting the transactions to affect the financial performance of the group in 2019,” Afarak said in a statement.

Earlier this month, the company released financial results for the first quarter which confirmed the negative impacts amid weak ferrochrome markets. The company noted the lower ferrochrome prices and lower sales volumes. It reported €41.3mln of revenue, down 17% from €50.2mln in the comparative quarter of last year.

First quarter underlying earnings (EBITDA) came in at a €4.8mln loss versus a €0.7mln loss a year earlier and it reported a €7.5mln loss, expanded from €1.9mln. There was a €4.1mln outflow of cash in the period. It ended the quarter with €10.1mln of cash and equivalents.

Chief executive Guy Konsbruck, at that time, said: “The operational challenges in our South African operations seen in 2018, persisted into the new year.

“Following the implementation of a turnaround strategy, positive results started being achieved in our South African mines towards the end of the first quarter. In addition, cash management was a key priority for the company during the quarter. Despite the results, prudent working capital management have allowed the company to keep cash flow stable.”

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Wed, 29 May 2019 08:30:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/221115/afarak-group-to-issue-new-shares-to-increase-interests-in-south-africa-assets-221115.html
<![CDATA[RNS press release - TWO DIRECT SHARE ISSUES FROM AFARAK ]]> https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000195083-en/ Wed, 29 May 2019 06:51:42 +0100 https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000195083-en/ <![CDATA[News - Afarak Group proposes to become a ‘European company’ ]]> https://www.proactiveinvestors.co.uk/companies/news/220671/afarak-group-proposes-to-become-a-european-company-220671.html Afarak Group PLC (LON:AFRK), in a statement after Monday’s close, revealed that it intends to convert its status to become a European company (referred to as a ‘Societas Europaea’ or SE).

The company told investors that it made the decision because it is a multinational company with operational functions in several different countries. It is currently designated as a Finnish company.

The move will allow flexibility and the company also seeks certain benefits of legislation that apply to SEs, it added.

READ: Afarak first quarter impacted by weaker chrome market

To advance this proposal the company has drawn up new draft terms - dated 17 May - which will be voted on at a shareholder’s general meeting, to take place at least one month from the date of the draft proposals.

Afarak anticipates that the most likely timing for the conversion will be at the end of the year.

“Conversion into an SE does not affect the company’s domicile, location of the head office or the employees’ employment contracts. The role of shareholders will also remain unchanged,” the company clarified.

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Tue, 21 May 2019 08:39:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/220671/afarak-group-proposes-to-become-a-european-company-220671.html
<![CDATA[RNS press release - CONVERSION OF AFARAK INTO A EUROPEAN COMPANY ]]> https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000193682-en/ Mon, 20 May 2019 15:36:17 +0100 https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000193682-en/ <![CDATA[News - Afarak first quarter impacted by weaker chrome market ]]> https://www.proactiveinvestors.co.uk/companies/news/220511/afarak-first-quarter-impacted-by-weaker-chrome-market-220511.html Afarak Group PLC (LON:AFRK) has released financial results for the first quarter which confirmed the negative impacts amid weak ferrochrome markets.

The company noted the lower ferrochrome prices and lower sales volumes. It reported €41.3mln of revenue, down 17% from €50.2mln in the comparative quarter of last year.

First quarter underlying earnings (EBITDA) came in at a €4.8mln loss versus a €0.7mln loss a year earlier and it reported a €7.5mln loss, expanded from €1.9mln. There was a €4.1mln outflow of cash in the period. It ended the quarter with €10.1mln of cash and equivalents.

“The operational challenges in our South African operations seen in 2018, persisted into the new year,” said chief executive Guy Konsbruck.

READ: Afarak issues profit warning for first quarter of 2019

He added: “With the second lowest benchmark price in the past nine quarters, sales volumes and revenues were impacted during the first three months of the year. The specialty segment performed well, although market prices for low carbon ferrochrome have weakened and the sales volumes have contracted.

“The company has adapted the production output to the market demand in order to keep efficient inventory management in place.”

Konsbruck continued: “Following the implementation of a turnaround strategy, positive results started being achieved in our South African mines towards the end of the first quarter. In addition, cash management was a key priority for the company during the quarter. Despite the results, prudent working capital management have allowed the company to keep cash flow stable.”

He also highlighted that chrome benchmark prices improved by 7.1% to US$1.20 per pound.

“This increase is expected to improve results for quarter two, compared to the first quarter,” Konsbruck said. “Apart from improved prices, the company is also expected to experience higher sales volumes throughout the second quarter.”

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Fri, 17 May 2019 10:39:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/220511/afarak-first-quarter-impacted-by-weaker-chrome-market-220511.html
<![CDATA[RNS press release - ADVERSE BUSINESS CONDITIONS IMPACT PERFORMANCE ]]> https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000193293-en/ Fri, 17 May 2019 10:10:25 +0100 https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000193293-en/ <![CDATA[News - Afarak issues profit warning for first quarter of 2019 ]]> https://www.proactiveinvestors.co.uk/companies/news/220297/afarak-issues-profit-warning-for-first-quarter-of-2019-220297.html Afarak Group PLC (LON:AFRK) has issued a profit warning for the first quarter of 2019 after some of the challenges from 2018 persisted into its new financial year.

The chrome alloys specialist said in a trading update in late-afternoon on Tuesday that the ferrochrome price had fallen in the quarter due to weaker demand for stainless steel from China, and as a result the company expected its performance for the period would be “below market expectations” with an expected EBITDA loss of around €5mln.

READ: Afarak Group takes full control of its mining operations

However, the company said its cash balance remained “satisfactory” and despite “some setbacks in challenging markets” it was continuing to optimise the business.

The group will publish its first quarter results on 17 May.

In early trading on Wednesday, the company’s shares were steady at 62.5p.

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Wed, 15 May 2019 08:46:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/220297/afarak-issues-profit-warning-for-first-quarter-of-2019-220297.html
<![CDATA[RNS press release - AFARAK GROUP: PROFIT WARNING FOR Q1 2019 ]]> https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000192690-en/ Tue, 14 May 2019 16:13:34 +0100 https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000192690-en/ <![CDATA[RNS press release - HOLDINGS IN COMPANY (FLAGGING NOTIFICATION IN ACCORDANCE WITH CHAPTER 9, SECTION 10 OF THE FINNISH SECURITIES MARKETS ACT) ]]> https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000191546-en/ Tue, 07 May 2019 14:12:12 +0100 https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000191546-en/ <![CDATA[RNS press release - AFARAK GROUP: NOTIFICATION OF MANAGERS’ TRANSACTIONS ]]> https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000190759-en/ Thu, 02 May 2019 13:23:23 +0100 https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000190759-en/ <![CDATA[RNS press release - AFARAK GROUP COMPLETES THE TRANSACTION RELATING TO SYNERGY AFRICA LTD ]]> https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000176587-en/ Fri, 05 Apr 2019 16:04:14 +0100 https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000176587-en/ <![CDATA[News - Afarak Group takes full control of its mining operations ]]> https://www.proactiveinvestors.co.uk/companies/news/217951/afarak-group-takes-full-control-of-its-mining-operations-217951.html Chrome alloys specialist Afarak Group PLC (LON:AFRK) is to take full control of its South African mines through a buy-out of its partner in the Synergy Africa joint venture.

Afarak added the transaction will give rise to a significant accounting gain due to a revaluation of its 51% stake following the change in control. This transaction simplifies the group structure and means Synergy Africa can be fully consolidated into the accounts, said the Finnish business.

In 2018, fully consolidating Synergy Africa would have resulted in stated revenue rising by €29mln and underlying profits by €1mln.

Guy Konsbruck, chief executive, said: “We are extremely glad to have reached this agreement, as the future growth potential of AFARAK resides largely in our mining activity.

“Additionally, our niche approach to the Ferro Chrome production requires full control over our mining assets to guarantee sustainable availability of high-quality ore.”

Synergy Africa was established in 2010 when Chromex Mining Plc was acquired.

The buy-out is costing a nominal sum of US$49 and will see the joint venture's £18mln of debt restructured.

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Thu, 04 Apr 2019 08:28:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/217951/afarak-group-takes-full-control-of-its-mining-operations-217951.html
<![CDATA[RNS press release - AFARAK WILL ACQUIRE 49% BALANCE of SYNERGY AFRICA LTD (Joint Venture) ]]> https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000176109-en/ Wed, 03 Apr 2019 16:47:13 +0100 https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000176109-en/ <![CDATA[RNS press release - AFARAK PUBLISHES AUDITOR’S REPORT ]]> https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000175565-en/ Mon, 01 Apr 2019 12:52:26 +0100 https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000175565-en/ <![CDATA[News - Afarak Group determined to grow again after 2018 challenges ]]> https://www.proactiveinvestors.co.uk/companies/news/217631/afarak-group-determined-to-grow-again-after-2018-challenges-217631.html  

Chrome and alloys specialist with mines and plant in South Africa Profits dropped in 2018 due to weak ferrochrome price and technical problems at Mogale alloys plant New management installed at Mogale Originally named Ruukki, the Finnish company is mulling a swtich of domicile to the UK to help with share illiquidity A buyback of shares listed in Finland is underway, encouraged by major shareholder LNS

 

How it's doing

In its annual report, Afarak Group Limited (LON:AFRK) told shareholders it has regrouped after a difficult year in 2018.

Guy Konsbruck, chief executive, wrote: “The unforeseen challenges in the South African assets were exacerbated by the lower average ferrochrome benchmark prices.

“These factors led to the group posting poor results when compared to the record performance for 2017."

There were particular problems with its Mogale plant, which was affected by technical problems, including stoppages and low-quality ore.

Corrective measures had been taken and a return to growth was the management’s objective, he added.

Production is also shifting towards high carbon ferrochrome, which will achieve higher margins, while mining operations are also being scaled back.

In addition to Mogale, Arafak also runs the Stellite, Mecklenburg and Vlakpoort mines.

As a result of the recent actions, Mogale’s performance stabilised in the fourth quarter but Afarak is cautious about predicting a sustained improvement in the tough conditions currently.

Revenues in 2018 were €194mln compared to €198.8mln in 2017, while the company reported an €18.6mln loss for the year, versus a €6.7mln profit.

 

What the boss says: Guy Konsbruck:

“We can always survive bad markets,” he says. "We have a unique product base when it comes to our alloys. We are one of the lowest cost miners of chrome, and we are still small enough that we can reduce our output if necessary.”

"Baseline for any given year is that the speciality business should deliver underlying profit (EBITDA) of around €10mln, and the South African business EBITDA of around €6.5mln."

 

Video

  Inflection points

Recovery in ferrochrome price

Remedial action at Mogale stays to improve performance

Completion of share buyback and switch of listing to London

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Mon, 01 Apr 2019 09:30:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/217631/afarak-group-determined-to-grow-again-after-2018-challenges-217631.html
<![CDATA[News - Afarak Group regroups after challenges of 2018 ]]> https://www.proactiveinvestors.co.uk/companies/news/217624/afarak-group-regroups-after-challenges-of-2018-217624.html Metals alloys specialist Afarak Group PLC ( LON:AFRK) told shareholders it has regrouped after a difficult year in 2018.

Guy Konsbruck, chief executive, wrote: “The unforeseen challenges in the South African assets were exacerbated by the lower average ferrochrome benchmark prices.

“These factors led to the group posting poor results when compared to the record performance for 2017."

Mogale

Afarak had particular problems with its Mogale plant, which was affected by technical problems including stoppages and low-quality ore.

Corrective measures were taken and a return to growth was management’s objective, he added.

Revenues in 2018 were €194mln compared to €198.8mln in 2017, while the company reported an €18.6mln loss for the year, versus a €6.7mln profit.

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Mon, 01 Apr 2019 08:31:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/217624/afarak-group-regroups-after-challenges-of-2018-217624.html
<![CDATA[RNS press release - AFARAK GROUP PLC'S PUBLISHES FINANCIAL STATEMENTS AND ANNUAL REPORT FOR 1 JANUARY - 31 DECEMBER 2018  ]]> https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000155240-en/ Fri, 29 Mar 2019 16:16:15 +0000 https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000155240-en/ <![CDATA[RNS press release - CORRECTION: UPDATE ON BUY-BACK ]]> https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000155208-en/ Fri, 29 Mar 2019 15:00:50 +0000 https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000155208-en/ <![CDATA[News - Chrome producer Afarak mulls Helsinki de-listing ]]> https://www.proactiveinvestors.co.uk/companies/news/217443/chrome-producer-afarak-mulls-helsinki-de-listing-217443.html Chrome producer Afarak Group PLC (LON:AFRK) is considering de-listing from the Nasdaq Helsinki stock exchange once it has completed a buyback of some of its shares.

Major shareholder LNS had argued for some time that because of liquidity constraints, particularly in the local Helsinki market where Afarak is based, the company should offer to buy out investors.

READ: Afarak updates investors as Helsinki rules on shareholder case

The share buyback will be limited to €28.4mln – although the board can waive this if they want – and investors are not being forced to sell if they do not want to.

As for timings, Afarak now expects that it will open its offer up to shareholders in late May once it has published its first-quarter results.

That means any buybacks will have been executed by the time the company holds its annual general meeting on 25 June.

Once the share buyback is completed, Afarak said it will look at de-listing in Helsinki and possibly changing the country in which it is domiciled, currently Finland.

“The board still concludes, as was the case in spring 2018, that in the long run it is not economically viable for the company and its shareholders to have a company domiciled in Finland and listed in Helsinki and London,” read Thursday’s statement.

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Thu, 28 Mar 2019 14:05:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/217443/chrome-producer-afarak-mulls-helsinki-de-listing-217443.html
<![CDATA[RNS press release - UPDATE ON BUY-BACK ]]> https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000154856-en/ Thu, 28 Mar 2019 13:00:02 +0000 https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000154856-en/ <![CDATA[News - Afarak Group updates investors as Helsinki court rules on shareholder case ]]> https://www.proactiveinvestors.co.uk/companies/news/215618/afarak-group-updates-investors-as-helsinki-court-rules-on-shareholder-case-215618.html Afarak Group PLC (LON:AFRK) has updated investors after a ruling by the Administrative Court of Helsinki against Danko Koncar, a shareholder in the company.

The court rejected Koncar's request to reverse a Financial Supervisory Authority's decision which requires Koncar to make a public bid for the shares in Afarak.

In a stock market statement, Afarak stated: “In its decision, the Administrative Court found that Kermas Ltd, which owns shares in Afarak Group Plc, had been controlled by Koncar in 2009 and that Koncar was therefore deemed to be a shareholder of Afarak Group Plc.

READ: Afarak boss Guy Konsbruck says management is responding to challenges

“Koncar was considered to have been acting in concert with Hino Resources Co Ltd, Finaline Business Limited, and therefore he and his wife, Jelena Manojlovic, were in a position to exercise dominance over Afarak Group Plc.

“When Kermas Ltd and Hino Resources Co Ltd's share of the votes in Afarak Group Plc's shares had exceeded the mandatory bid limit of 30% on October 22, 2009, the offer obligation was deemed to have arisen at that time.

“The Administrative Court took the view that Koncar was the party that needs to make the offer.

“Consequently, the Financial Supervisory Authority has been authorised to oblige the appellant to fulfill the obligations imposed by the threat of fines.”

Additionally, the court also rejected a request from Koncar to annul a FCA decision ordering him to pay a €40mln fine but held that an additional €10mln fine amount had not yet accrued.

Afarak added: “The company is not a party to the proceedings and/or the judgement.

“The company was also informed that Dr Koncar will immediately appeal against the decision of the Helsinki Administrative Court in front of the Supreme Administrative Court of Finland.”

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Fri, 01 Mar 2019 12:37:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/215618/afarak-group-updates-investors-as-helsinki-court-rules-on-shareholder-case-215618.html
<![CDATA[RNS press release - AFARAK RECEIVES DECISION FROM THE ADMINISTRATIVE COURT OF HELSINKI ]]> https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000150554-en/ Fri, 01 Mar 2019 10:42:26 +0000 https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000150554-en/ <![CDATA[News - Afarak boss Guy Konsbruck says management is responding to South Africa business challenges ]]> https://www.proactiveinvestors.co.uk/companies/news/215141/afarak-boss-guy-konsbruck-says-management-is-responding-to-south-africa-business-challenges-215141.html Afarak Group PLC (LON:AFRK) chief executive Guy Konsbruck told investors that its management is responding to the challenges facing the business.

“The executive management team is highly focused on optimising the performance of the South African assets,” Konsbruck said in the company’s full-year results statement for 2018.

READ: Afarak to write-down Mogale as ferrochrome market remains subdued​

“The Mogale plant is today under a new management team which is tasked with improving operations and cutting costs.

“The team has already started to implement a turnaround strategy and production is shifting from charge chrome to high carbon ferrochrome which currently commands higher margins. Mining operations are also being re-focused with a resulting reduction in fixed costs and capital expenditure.”

Revenue for the fourth quarter reduced to €47mln, compared to €50.6mln in the corresponding period of 2017, and for the whole of 2018, it generated €194mln compared to €198.8mln in 2017.

The company reported an €18.6mln loss for the year, versus a €6.7mln profit in the year before.

Konsbruck added: “2018 marked a particularly disruptive and difficult year for Afarak.”

“The unforeseen challenges in the South African assets were exacerbated by the lower average ferrochrome benchmark prices.

“These factors led to the group posting poor results when compared to the record performance for 2017."

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Fri, 22 Feb 2019 12:44:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/215141/afarak-boss-guy-konsbruck-says-management-is-responding-to-south-africa-business-challenges-215141.html
<![CDATA[RNS press release - FINANCIAL STATEMENTS RELEASE 2018 ]]> https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000149373-en/ Fri, 22 Feb 2019 11:52:33 +0000 https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000149373-en/ <![CDATA[News - Afarak to write-down Mogale as ferrochrome market remains subdued ]]> https://www.proactiveinvestors.co.uk/companies/news/214938/afarak-to-write-down-mogale-as-ferrochrome-market-remains-subdued-214938.html Afarak Group PLC (LON:AFRK) is to take a €6.5mln write-down of its metal alloys plant at Mogale due to ongoing tough conditions in the steel additive market.

Mogale, in South Africa, has been affected by technical problems including stoppages and low-quality ore while the price of ferrochrome has continued to decline.

READ: Afarak names Melvin Grima, its Malta-based finance director, as its new chief financial officer

“In addition, increasing power and reductant cost, a strengthening of the rand and the forced closure of the P3 furnace all had a bearing on the results,” said the group.

A new management team has been installed at Mogale with the emphasis on improving operations and cutting costs.

Production is also shifting towards high carbon ferrochrome, which will achieve higher margins, while mining operations are also being scaled back.

In addition to Mogale, Arafak also runs the Stellite, Mecklenburg and Vlakpoort mines.

As a result of the recent actions Mogale’s performance stabilised in the fourth quarter but Afarak is cautious about predicting a sustained improvement in the tough conditions currently.

 

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Wed, 20 Feb 2019 08:09:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/214938/afarak-to-write-down-mogale-as-ferrochrome-market-remains-subdued-214938.html
<![CDATA[RNS press release - AFARAK GROUP: PROFIT WARNING FOR 2018 ]]> https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000148929-en/ Wed, 20 Feb 2019 07:00:00 +0000 https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000148929-en/ <![CDATA[RNS press release - AFARAK GROUP COMPLETES SHARE BASED COMPENSATION ]]> https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000147717-en/ Tue, 12 Feb 2019 07:00:00 +0000 https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000147717-en/ <![CDATA[News - Afarak names Melvin Grima, its Malta-based finance director, as its new chief financial officer ]]> https://www.proactiveinvestors.co.uk/companies/news/212423/afarak-names-melvin-grima-its-malta-based-finance-director-as-its-new-chief-financial-officer-212423.html Afarak Group PLC (LON:AFRK) has appointed Melvin Grima, the specialist alloy producer’s finance director, as its new chief financial officer with immediate effect.

The London main market-listed firm said Grima replaces Pedrag Kovacevic who left the company on 10 January by mutual agreement.

READ: Afarak boss pleased with performance of speciality alloys division so far this year

Afarak pointed out that Grima, a Maltese national and resident, has been with the firm since 2013 and has occupied senior positions within the finance function.

Guy Konsbruck, Afarak’s CEO, commented: “Melvin Grima has been with the Company for a number of years and his experience will make him an excellent successor to Mr Kovacevic.

“Through this appointment, Afarak is further strengthening its corporate and finance function in Malta.”

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Fri, 11 Jan 2019 15:17:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/212423/afarak-names-melvin-grima-its-malta-based-finance-director-as-its-new-chief-financial-officer-212423.html
<![CDATA[RNS press release - AFARAK APPOINTS NEW CFO ]]> https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000143764-en/ Fri, 11 Jan 2019 15:09:17 +0000 https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000143764-en/ <![CDATA[RNS press release - AFARAK GROUP TO BE TRANSFERRED TO NASDAQ’S MIDCAP SEGMENT ]]> https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000141346-en/ Thu, 20 Dec 2018 14:39:43 +0000 https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000141346-en/ <![CDATA[RNS press release - AFARAK GROUP COMPLETES SHARE BASED COMPENSATION ]]> https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000141277-en/ Thu, 20 Dec 2018 10:37:35 +0000 https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000141277-en/ <![CDATA[RNS press release - AFARAK GROUP Plc’s 2019 FINANCIAL REPORTING CALENDAR ]]> https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000140790-en/ Tue, 18 Dec 2018 07:00:00 +0000 https://www.proactiveinvestors.co.uk/companies/rns/16823/NASDAQ_1000140790-en/ <![CDATA[Media files - Afarak Group Plc well positioned to exploit opportunities in 2019 ]]> https://www.proactiveinvestors.co.uk/companies/stocktube/11629/afarak-group-plc-well-positioned-to-exploit-opportunities-in-2019-11629.html Fri, 14 Dec 2018 15:23:00 +0000 https://www.proactiveinvestors.co.uk/companies/stocktube/11629/afarak-group-plc-well-positioned-to-exploit-opportunities-in-2019-11629.html <![CDATA[News - Afarak boss pleased with performance of speciality alloys division so far this year ]]> https://www.proactiveinvestors.co.uk/companies/news/209368/afarak-boss-pleased-with-performance-of-speciality-alloys-division-so-far-this-year-209368.html Chrome producer Afarak Group plc (LON:AFRK) has seen a double-digit rise in revenue in its speciality alloys division so far in 2018.

In the first nine months of the year, revenue jumped 11.4% to €72.6mln (30 Sep 17: €65.2mln).

“The Speciality Alloys business segment fully met our expectations,” said chief executive Guy Konsbruck.

“The mines in Turkey continued to perform well and the additional plant investments have led to an increase in productivity and outputs. Processing levels at our EWW plant in Germany continued to increase.”

WATCH: Afarak Group Plc well positioned to exploit opportunities in 2019

But weak ferrochrome prices and the closure of some European and South African processing plants over summer held back overall performance in the third quarter.

Revenue dipped to €42.6mln in the three months to the end of September (Q3 17: €44.2mln), while

Processed material sold in the three months ended September 30 decreased by 7.3% to 25,500 tonnes (Q3 17: 27,500 tonnes), leading to a 3.6% fall in revenue to €42.6mln (Q3 17: €44.2mln).

Q3 always tricky

Underlying losses (LBIT) widened slightly to €4.3mln (Q3 17: €4.2mln), with profitability impacted by the shutdown of a furnace at Afarak’s Mogale processing plant in August.

Falling ferrochrome prices didn’t help matters, with the benchmark dipping to US$124 c/lb, which the company noted was lower than the previous quarter and the price for Q4 2017.

“In line with expectations, the seasonal effects of quarter three impacted Afarak’s performance,” said chief executive Guy Konsbrick.

“With plants in Europe shutting down, due to summer recess, and plants in South Africa also closing for maintenance in order to avoid higher winter electricity tariffs, quarter three is always bound to be a difficult one.”

Shares were flat at 77.5p on Friday morning.

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Fri, 16 Nov 2018 10:45:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/209368/afarak-boss-pleased-with-performance-of-speciality-alloys-division-so-far-this-year-209368.html
<![CDATA[News - Chrome producer Afarak to offer €1.015 a share to buy investors out ]]> https://www.proactiveinvestors.co.uk/companies/news/209023/chrome-producer-afarak-to-offer-1015-a-share-to-buy-investors-out-209023.html Chrome producer Afarak Group PLC (LON:AFRK) is to offer shareholders €1.015 per share to buy back its stock after investors voted in favour of the proposal at an extraordinary general meeting today.

The proposal was put forward by major shareholder LNS, which has argued for some time that because of liquidity constraints, particularly in the local Helsinki market where Afarak is based, the company should offer to buy out its shareholders.

READ: Afarak bows to shareholder pressure

Bosses had previously suggested that they were not in favour of a buyback but said on Friday that it was their “duty” to carry out the wishes of shareholders.

The share buyback will be limited to €28.4mln – although the board can waive this if they want – and investors are not being forced to sell if they do not want to.

As for timings, Afarak said it will lodge the offer by the end of March 2019 and it will remain open until the end of May. It previously said that this timeframe makes the most sense as the financial statements for 2018 will be ready by then.

Although it was the one that pushed for the buyback, LNS, along with fellow shareholder ATKEY, has said it won’t sell any of its shares.

Shares rose 3.2% to 80p on Monday afternoon.

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Mon, 12 Nov 2018 13:24:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/209023/chrome-producer-afarak-to-offer-1015-a-share-to-buy-investors-out-209023.html
<![CDATA[News - Chrome producer Afarak bows to shareholder pressure ]]> https://www.proactiveinvestors.co.uk/companies/news/208935/chrome-producer-afarak-bows-to-shareholder-pressure-208935.html Chrome producer Afarak Group PLC (LON:AFRK) will bow to pressure from one of its major shareholders and offer to buy back its shares if investors vote in favour of the idea at an upcoming extraordinary general meeting.

LNS, which owns more than a 10% stake in the company, has argued for some time that because of liquidity constraints, particularly in the local Helsinki market, where Afarak is based, the company should offer to buy out its shareholders.

READ: LNS clarifies share buyback proposal

Bosses had previously not been in favour of such a proposal, but a statement on Friday afternoon said it was their “duty” to carry out the wishes of shareholders, whatever that may be.

“If the general meeting decides to authorise the board to execute the proposed transaction with a relevant majority, the board sees that it is the duty of the board to execute the transaction.”

LNS wants Afarak to offer €1.015 in cash for each share and has also asked for the offer to be limited to 28.404mln shares. The company said it would not publish an offer price at this time.

As for timings, should shareholders vote through the proposal, Afarak thinks March 2019 makes the most sense to lodge the offer, as that is when the financial statements for 2018 will be ready by.

The plan at the moment would be for the offer period to open in early March and close towards the end of that month.

Should the offer be executed, LNS, along with fellow shareholder ATKEY, has said it won’t sell any of its shares.

Afarak’s London shares were up 7.1% to 83p in mid-afternoon trade on Friday.

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Fri, 09 Nov 2018 14:35:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/208935/chrome-producer-afarak-bows-to-shareholder-pressure-208935.html