AFARAK GROUP PLC'S INTERIM REPORT FOR 1 JANUARY - 31 MARCH

07:00 London, 09:00 Helsinki, 8 May 2014 - Afarak Group Plc ("Afarak" or "the Company") (LSE: AFRK, OMX: AFAGR) Interim Report AFARAK GROUP PLC'S INTERIM REPORT FOR 1 JANUARY - 31 MARCH 2014 Q1 HIGHLIGHTS (January-March 2014): - Positive EBIT and profit for the first time since entering the mineral business in 2008 - Revenue increased by 36.7% to EUR 43.2 (Q1/2013: 31.6) million - Sales from processed products increased by 47.7% to 22,146 (Q1/2013: 14,993) tonnes - EBITDA was EUR 3.0 (Q1/2013: 4.2) million and the EBITDA margin was 7.0% (Q1/2013: 13.2%) - EBIT was EUR 0.9 (Q1/2013: -2.1) million - Profit for the period totalled EUR 0.2 (Q1/2013: 0.0) million - Production increased by 70.5% to 139,084 (Q1/2013: 81,551) tonnes - Cash flow from operations was EUR 2.8 (Q1/2013: 8.1) million and liquid funds at 31 March were   EUR 16.8 (31 March 2013: 17.5) (31 December 2013:13.8) million - Outlook for 2014 remain unchanged +-----+ +------+ KEY FIGURES (EUR million) |Q1/14|Q1/13 Change|FY2013| -------------------------------+-----+------------+------+ Revenue | 43.2| 31.6 36.7%| 135.5| -------------------------------+-----+------------+------+ EBITDA | 3.0| 4.2 -28.0%| 14.0| | | | | EBITDA margin | 7.0%|13.2%  | 10.4%| -------------------------------+-----+------------+------+ EBIT | 0.9| -2.1  | -8.0| | | | | EBIT margin | 2.1%|-6.5%  | -5.9%| -------------------------------+-----+------------+------+ Earnings before taxes | 1.2| -2.7  | -11.2| | | | | Earnings margin | 2.7%|-8.7%  | -8.2%| -------------------------------+-----+------------+------+ Profit | 0.2| 0.0  | -4.4| | | | | Earnings per share, basic, EUR| 0.00| 0.00  | -0.02| -------------------------------+-----+------------+------+ Commenting on the first quarter results, Danko Koncar, CEO, said: "The Group's revenue during the period was strong with a substantial increase of 48% in sales volumes of processed material when compared to the same quarter last year. Despite this increase we have experienced difficult market conditions with lower prices and a weak US dollar impacting conversion of revenue and results from operations. Processing volumes improved in the first quarter when compared to the equivalent period last year as a result of having both EWW and Mogale Alloys in full operation during this period.  Mining sales and production volumes were also higher when compared to the same period last year due to the fact that Mecklenburg was not yet in operation in the first quarter of 2013. The ferrochrome market remains difficult to predict with some signs of recovery during the period. In the longer term we believe that ferrochrome, particularly the speciality and super alloys segment, will again be in high demand. We continue evaluating different initiatives that could strengthen our position and provide new growth opportunities.  Our focus remains on generating cash and increasing profits. Finally, I'm pleased to announce that we have achieved positive EBIT and profit for the first time from the mineral business since entering the sector. 2014 OUTLOOK The global economic outlook is showing signs of recovery with western industrial nations issuing positive economic indicators.  Demand for commodities is also showing recovery with increase in demand for speciality alloys in United States. The ferroalloy market is expected to continue the positive trend of 2013 during which consumption reached record levels. To date, however, pricing has not responded to the increased demand. The Group continues to be prepared for significant price fluctuations and will continue to adapt its production levels accordingly. At Mogale Alloys, part of the FerroAlloys division, the Company expects to start production of medium carbon ferrochrome during the third quarter of 2014, which is expected to have a positive impact on our profit margins. In the Speciality Alloys division we are expecting to see an increase in our raw materials cost due to current market conditions.  As a result the Group expects its financial performance for the full year 2014 to marginally improve compared to 2013. Fluctuations of exchange rates between the Euro, the South African Rand, the Turkish Lira and the US Dollar can significantly impact the Company's financial performance. Disclosure procedure Afarak follows the disclosure procedure enabled by Disclosure obligation of the issuer (7/2013) published by the Finnish Financial Supervision Authority, and hereby publishes its Q1/2014 interim report enclosed to this stock exchange release. The Interim Report is attached to this release and is also available on the Company's website at www.afarakgroup.com. AFARAK GROUP PLC Danko Koncar CEO For additional information, please contact: Afarak Group Plc Danko Koncar, CEO, +44 (0)20 7376 1175, danko.koncar@afarak.com Investec Bank Plc Jeremy Wrathall, +44 (0)20 7597 5970 Financial reports and other investor information are available on the Company's website: www.afarakgroup.com. Afarak Group is a chrome mining and minerals producer focused on delivering sustainable growth with a speciality alloys business in southern Europe and a ferroalloys business in southern Africa. The Company is listed on NASDAQ OMX Helsinki (AFAGR) and the Main Market of the London Stock Exchange (AFRK). www.afarakgroup.com Distribution: NASDAQ OMX Helsinki London Stock Exchange main media www.afarakgroup.com [HUG#1783712]