Afarak Group — Earnings Release 2017

Feb 23, 2018

STRONG RESULT IN 2017 AS FULL-YEAR EBITDA MORE THAN TRIPLED TO EUR 18.0 MILLION

STRONG RESULT IN 2017 AS FULL-YEAR EBITDA MORE THAN TRIPLED TO EUR 18.0 MILLION

07:00 London, 09:00 Helsinki, 22 February 2018 - Afarak Group Plc ("Afarak" or
"the

Company") (LSE: AFRK, NASDAQ: AFAGR)

STRONG RESULT IN 2017 AS FULL-YEAR EBITDA MORE THAN TRIPLED TO EUR 18.0 MILLION

HIGHLIGHTS IN THE FOURTH QUARTER OF 2017

Afarak's fourth-quarter EBITDA amounted to EUR 2.6 million, compared to the
historically high EUR 4.3 million a year earlier. Despite strong revenue growth
on the back of the improved market conditions, profitability was affected by
mostly non-operational factors.

* Revenue increased strongly by 14.0% to EUR 50.6 (Q4/2016: 44.4) million,
driven by our improved production levels
* Processed material sold increased by 6.1% to 25,371 (Q4/2016: 23,906) tonnes
supported by stronger market demand and higher prices
* Tonnage mined increased significantly to 154,646 (Q4/2016: 114,898) tonnes,
due to increased ore sales activity to China
* Capital expenditure for the fourth quarter of 2017 totalled EUR 3.4 (0.7)
million
* EBITDA stood at EUR 2.6 (Q4/2016: 4.3) million, with the EBITDA margin of
5.2% (Q4/2016: 9.6%) and was negatively impacted by mostly non-operational
factors
* EBIT was EUR 1.2 (Q4/2016: 2.7) million, with the EBIT margin at 2.3%
(Q4/2016: 6.1%)

HIGHLIGHTS FOR THE FULL YEAR OF 2017

2017 was a record year for Afarak. EBITDA more than tripled to EUR 18.0
million, from EUR 5.5 million in 2016. Management's focus on productivity and
efficiency gains throughout the Group, especially in South Africa, supported by
stronger market conditions, resulted in significant operational and financial
gains for the year

* Revenue increased by 29.5% to EUR 198.8 (FY/2016: 153.6) million, reflecting
both higher production and sales volumes as well as prices
* Processed material sold increased by 4.6% to 101,598 (FY/2016: 97,095)
tonnes
* Tonnage mined nearly doubled to 503,914 (FY/2016: 262,266) tonnes, primarily
due to the increased activity and operational efficiency in South Africa
* The Company increased its investment substantially, particularly in South
Africa, with capital expenditure for the full year 2017 standing at EUR 6.9
(2.8) million. This trend is expected to continue over the next two years.
* EBITDA stood at EUR 18.0 (FY/2016: 5.5) million and the EBITDA margin
was        9.0% (FY/2016: 3.6%)
* EBIT was EUR 11.4 (FY/2016: -1.0) million, with the EBIT margin at 5.7%
(FY/2016: -0.7%)

Key Group figures

|  |Q4/17|Q4/16|FY2017|FY2016|
------------------------------------+-----------+-----+-----+------+------+
Revenue |EUR million| 50.6| 44.4| 198.8| 153.6|
| | | | | |
EBITDA |EUR million| 2.6| 4.3| 18.0| 5.5|
| | | | | |
EBIT |EUR million| 1.2| 2.7| 11.4| -1.0|
| | | | | |
Earnings before taxes |EUR million| 1.8| 1.5| 4.2| -3.1|
| | | | | |
Profit from continuing operations |EUR million| 3.5| 1.7| 5.2| -2.8|
| | | | | |
Profit from discontinued operations|EUR million| 0.0| 0.4| 1.5| 1.9|
| | | | | |
Profit |EUR million| 3.5| 2.0| 6.7| -0.9|
| | | | | |
Earnings per share | EUR| 0.01| 0.01| 0.02| 0.00|
| | | | | |
EBITDA margin | %| 5.2| 9.6| 9.0| 3.6|
| | | | | |
EBIT margin | %| 2.3| 6.1| 5.7| -0.7|
| | | | | |
Earnings margin | %| 3.5| 3.4| 2.1| -2.0|
| | | | | |
Personnel (end of period) |  |1,017| 813| 1,017| 813|
------------------------------------+-----------+-----+-----+------+------+

MARKET SENTIMENT FOR THE FIRST QUARTER 2018

The charge chrome benchmark price dropped from USD 1.39/lb in the fourth quarter
2017, to USD 1.18/lb for the first quarter 2018. The current benchmark is
significantly lower than the exceptionally high price registered during the
corresponding quarter in 2017. Additionally, increased raw materials; graphite
electrodes and ferrosilicon; and a weakening of the US dollar combined with a
strengthening of the South African Rand are expected to have a significantly
negative impact on profitability. Recent developments, both in chrome ore and
ferrochrome prices, have been more positive again.

CEO GUY KONSBRUCK

"2017 was a milestone for Afarak both financially and operationally. With
respect to health and safety, we continued implementing various measures and
investments across the Group and it is a satisfaction to note that we
successfully reduced the number of lost days due to injury. In addition, no
fatalities were reported across our operations. We remain committed to continue
improving our safety track record across the Group.

Afarak's full-year EBITDA increased more than three-fold, from EUR 5.5 million
to EUR 18.0 million with sales of EUR 198.8 million. While the robust
performance was supported by improved market conditions, including higher
ferrochrome prices, I am particularly proud of our persistent focus on enhancing
the Company's position as a vertically-integrated producer and on its
transformation to a more resilient and adaptable organisation. Through various
initiatives, the Company weathered the challenges and more importantly, reaped
the benefits of the market upswing.

In the speciality alloys segment, Afarak registered a very strong performance on
the back of increased production, strong market demand and improved prices. The
ferroalloys segment in South Africa, also performed well. In addition, the mines
continued to register positive performance, increasing efficiency and
productivity. The resumption of opencast mining at Mecklenburg played a key role
in the results of the Group. Throughout 2017, Afarak also took initiatives to
extend the opencast mining at Stellite by increasing the high wall. Work has
also started on introducing additional cycles of beneficiation and the expansion
of the product mix through the introduction of higher value-add products. These
projects are still in the initial stages of development and the first production
results could be expected during 2018.

The acquisition of the Zeerust Chrome Mine will further extend Afarak's
production capacity towards the second half of the year and will make it the
only South African producer of high carbon ferrochrome.

On behalf of management, I would like to thank all the teams across our
operations for their important contribution to registering these results. The
adaptability and flexibility of the Group reflects the work ethic of our
employees who rise to the challenges. I am confident that our actions and
interventions to enhance the Company's operations and structures continue to pay
off.

The Company continued to care about community initiatives, particularly in South
Africa. Afarak supports the daily life of various communities close to our
assets and we are committed to continue to improve their quality of life. Apart
from education and social projects, we are also supporting local
entrepreneurship, enhancing water supply and local infrastructure development,
as well as continuing our environmental rehabilitation activity.

We are installing a 2.8 MW heat recovery unit in Mogale. This energy saving
investment will contribute towards a proportional reduction of our CO2 emissions
and a respective increase of our productivity. We look forward to extending our
investment in other sustainability and community initiatives.

Moving forward, the markets remain volatile. The decrease in the first quarter
benchmark is expected to impinge on our results. During the coming year,
management continues to consolidate Afarak's positive performance, while
focusing on capital investments, production capacity growth, specialised
products development and market expansion. We are currently finalising a review
of our resources & reserves statement that will be published in due course.

During 2018, the Board, as instructed by shareholders, will be preparing a plan
for delisting from the Helsinki Stock Exchange. This will develop the need to
increase market liquidity in London and management is working to attract new
institutional and industrial investors who believe in the long-term growth
prospects of the Company."

INVESTOR PRESENTATION

Management will host an investor presentation on Thursday 1(st) March, 2018 at
10.30 am Finnish time at Union Square Auditorium (Floor K1) Unioninkatu
22, 00130 Helsinki, Finland.

FINANCIAL REPORTING IN 2018

The Interim Report for Q1 will be published on Friday 11(th) May, 2018 and the
closed period will be between 11(th) April and 11(th) May 2018.

AFARAK GROUP PLC

Guy Konsbruck

CEO

For additional information, please contact:

Afarak Group Plc

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

Jean Paul Fabri, +356 9940 8746, 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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