Slide 1: Results Q2 2016 Investor Call Presentation
RESULTS Q2 2016 Welcome Investor Call Presentation 17 August 2016
Slide 2: The external environment in quarter two was one of most challenging ever
The external environment in quarter two was one of most challenging ever.
Slide 3: Market is characterised by plummeting prices
Market is characterised by plummeting prices… 12 • Prices are at their lowest since 2013 10 • Despite the price fall, Afarak did not compromise its selling price in favour 8 of volumes 6 • Speciality alloy sales were particularly effected 4 • Looking ahead, Afarak has a significant 2 upside potentia
Slide 4: …and a rallying ZAR
…and a rallying ZAR. 12 • Exchange rates are at their highest 10 since 2013 8 • This has a direct negative effect on 6 our operations in South Africa through 4 its impact on selling prices 2 • This had a particular strong negative 0 impact on silico manganese Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q
Slide 5: Overview of results
Overview of results € million Q2 2016 Y-o-Y Drivers Lower sales volume & lower Revenue 39.5 prices EBITDA 0.8 Lower sale prices & low EBIT -0.9 volumes of silico manganese, low carbon ferrochrome and special grade ferrochrome Profit -1.0 Depletion of open cast pit at Material mined (tonnes) 56,395 M
Slide 6: Group sales (mt)
Group sales (mt) Mining Processing 40,618 28,214 -55.4% -11.2% • Effected by the depletion of • Increased sales in charge chrome open cast mine at Mecklenburg and medium carbon ferrochrome were outweighed by lower sales of silico manganese, low carbon ferrochrome & special grade ferrochrome
Slide 7: Speciality Alloys Segment
Speciality Alloys Segment Production Performance 22,487 mt +6.8% Revenue €18.4 million (€26.1 million)* Mining Increase in chromite EBITDA €1.5 million due to new plant at TMS (€4.5 million) Processing Weak market EBIT €0.9 million conditions (€3.9 million) Mainly driven by lower sales volumes & pri
Slide 8: FerroAlloys Segment
FerroAlloys Segment Production Performance 60,694 mt Revenue €21.1 million -55.8% (€27 million)* Mining Depletion of open cast EBITDA €0.5 million mine at Mecklenburg (€3.9 million) Processing SiMn furnace at EBIT -€0.5 million Mogale switched to (€2.7 million) ChCr Driven by lower prices & volumes
Slide 9: Safety, Health & Sustainable Development
Safety, Health & Sustainable Development 3 injuries caused loss of time
Slide 10: Looking ahead
Looking ahead • Improved benchmark prices for charge chrome • Switch one of silico manganese furnaces to charge chrome • Increased business from the US with respect to special grade ferrochrome • Evaluation to further streamline internal cost structures and business processes
Slide 11: Concluding remarks
Concluding remarks • The challenging external environment impacted Afarak’s performance • Despite the weak operating environment, EBITDA remained positive at EUR 0.8 million • The Group also managed to reduce its debt by EUR 4.7 million due to its strong cash position and pay out EUR 2.6 million cap
Slide 12: www.afarak.com
www.afarak.com Welcome