Afarak Group — Earnings Release 2018

May 11, 2018

RESILIENT PERFORMANCE DESPITE CHALLENGING BUSINESS CONDITIONS

RESILIENT PERFORMANCE DESPITE CHALLENGING BUSINESS CONDITIONS

15:00 London, 17:00 Helsinki, May 11, 2018 - Afarak Group Plc ("Afarak" or "the
Company")

RESILIENT PERFORMANCE DESPITE CHALLENGING BUSINESS CONDITIONS
HIGHLIGHTS IN THE FIRST QUARTER OF 2018

* Compared to a year earlier, benchmark price fell by 30% leading revenues to
decline by 11.5% to EUR 50.2 (Q1/2017: 56.7) million.
* Processed material sold decreased by 16.6% to 23,284 (Q1/2017: 27,916) tons
* Tonnage mined increased by 63.4% to 139,478 (Q1/2017: 85,352) tons.
* Unfavourable exchange rate movements and a significant increase in raw
material costs, negatively impacted profitability.
* EBITDA was EUR -0.7 (Q1/2017: 12.7) million and the EBITDA margin was -1.4%
(Q1/2017: 22.4%).
* EBIT was EUR -2.4 (Q1/2017: 11.1) million and the EBIT margin was -4.7%
(Q1/2017: 19.6%).
* Profit for the period from continuing operations totalled EUR -1.9 (Q1/2017:
4.2) million, with cash flow from operations standing at EUR 1.2 (Q1/2017:
8.5) million and liquid funds at 31 March were EUR 10.5 (31 March
2017: 16.2) (31 December 2017: 10.7) million. Capital expenditure for the
first quarter of 2018 totalled EUR 1.8 (0.6) million

Key Group figures
    Q1/18 Q1/17 Q4/17 2017

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Revenue EUR million 50.2 56.7 50.6 198.8

EBITDA EUR million -0.7 12.7 2.6 18.0

EBIT EUR million -2.4 11.1 1.2 11.4

Earnings before taxes EUR million -2.5 6.9 1.8 4.2

Profit from continuing operations EUR million -1.9 4.2 3.5 5.2

Profit from discontinued operations EUR million 0.0 0.0 0.0 1.5

Profit EUR million -1.9 4.2 3.5 6.7

Earnings per share EUR -0.01 0.01 0.01 0.02

EBITDA margin % -1.4 22.4 5.2 9.0

EBIT margin % -4.7 19.6 2.3 5.7

Earnings margin % -5.0 12.1 3.5 2.1

Personnel at the end of the period   1,015 906 1,017 1,017

MARKET SENTIMENT FOR THE SECOND QUARTER 2018

The charge chrome benchmark price for quarter two rose by 20% to USD1.42 per
pound. This increase is expected to improve results for quarter two, compared to
the first quarter. Apart from improved prices, the Company is also expected to
experience higher sales volumes throughout the second quarter. For reference,
the exceptionally high benchmark of Q2 2017 was USD1.54 per pound. Despite the
higher benchmark, market prices for the sales of Chrome Ore have come under
pressure during the month of April, confirming the challenging market
conditions.
CEO GUY KONSBRUCK

"Afarak managed to minimise the impact of a number of external factors that
impinged on the sector and company during the first three months of the year.

The charge chrome benchmark price for quarter one 2018 was 30% lower than a year
earlier and 15% less than quarter four 2017. This decline led to lower revenues
and profitability levels. Furthermore, cost pressures also impacted on
profitability as raw materials such as graphite electrodes and ferrosilicon all
increased significantly. Profitability was further impacted by a weakening of
the US dollar and a strengthening of the South African Rand. In addition,
several technical issues, including breakdowns and temporary stoppages of
processing equipment in our South African mining operations, caused lower
production outputs from the previous quarter, ultimately affecting raw material
supply to Mogale, as well as revenues from sales of chrome ore to the market.

Efforts were made to minimise overheads, hedge the foreign exchange exposures
and, where appropriate, postpone the sales of materials. During the quarter, the
Company continued to prove its resilience to weak market conditions primarily
through its cost consciousness and through its lean and effective management
structure.

The benchmark price for quarter two has rebounded and with expected higher sales
volumes, various operational investments are set to materialise. Mining in
Vlakpoort is set to commence in quarter two whilst in Mogale, Afarak will also
start producing foundry grade ore."

The Board of Directors

Afarak Group

For additional information, please contact:

Guy Konsbruck, CEO, +356 2122 1566, guy.konsbruck@afarak.com

Jean Paul Fabri, PR Manager, +356 2122 1566, jp.fabri@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

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