What it does
Headquartered in Helsinki, the group runs the Mogale processing plant, along with the Stellite, Mecklenburg and Vlakpoort mines, gaining full control of the mines in the first half of 2019.
Originally named Ruukki, the Finnish company has been mulling a switch of domicile to the UK to help with share illiquidity.
How it's doing
For 2019, Afarak scaled down mining activity as the industry faced some big bumps in the road, with lower selling prices and a deterioration of the chrome ore and ferrochrome market amid unfavourable operational conditions in South Africa, particularly with power being expensive and irregular.
Mined tonnage was reduced by 34.9% to 357,557 tonnes for the year and sold volumed decreased 18.7% to 81,802 tonnes.
Underlying losses (EBITDA) increased to €23.8mln from €1mln the year before, while an impairment on goodwill and other long-term assets related to the Mogale plant of €32mln led to a full loss for the year of €58.9mln, compared to €18.6mln last time.
The company is also facing a fine from the Finnish regulator relating to disclosure issues.
A buyback of shares listed in Finland is underway, encouraged by major shareholder LNS
What the boss says:
“We can always survive bad markets,” said chief executive Guy Konsbruck in 2019. "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."
But while times continued to be tough in early 2020, with Afarak taking a “conservative view” and preparing for weak market conditions, Konsbruck expected lower losses and a line in the sand drawn over the energy market in South Africa.
“Fortunately, it seems that the South African government has realised the emergency in the meantime, so that swift and concrete counter-measures could be kicked off very soon,” Konsbruck said alongside final reults.
“Together with the industry players, many official bodies are elaborating plans on saving and reinvigorating the industrial activity.”
He added: “The main priorities for Afarak in 2020 are stability and consistency of operational and financial performance,” Konsbruck concluded.
- Recovery in ferrochrome price
- Action taken by South African government to improve energy market
- Remedial action at Mogale starts to improve performance
- Completion of share buyback and switch of listing to London