Last checked at 
LONDON (Alliance News) - Afarak Group PLC Thursday said it swung to a profit in the second quarter on the back of a big rise in revenue and a jump in ferrochrome production, but it warned on its outlook for the remainder of the year due to low ferrochrome prices.
The ferro alloys mining firm said pretax profit in the three months to June 30 was EUR1.9 million, against a EUR2.5 million loss a year ago. That result helped to boost its half-year results too, with pretax profit in the six months to June 30 up to EUR3.1 million against a EUR5.3 million loss last year.
The profit was pushed higher by a 51% rise in revenue in the second quarter, to EUR47.3 million from EUR31.4 million last year. That helped pushed its half-year revenue up to EUR90.5 million against EUR63.0 million in 2013, a 44% rise.
The company was bolstered in the second quarter by a 78% jump in ferrochrome production to 21,854 tonnes, against 12,283 tonnes last year. But the firm said that though it has upped its production, ferroalloy prices have yet to recover to the highs seen last year, despite a rise in demand for speciality alloys in the US market.
As a result, the company said that while it still expects its performance this year to be stronger than in 2013, earnings before interest, taxation, depreciation and amortisation are expected to be lower in the third quarter year-on-year as ferroalloy prices remain under pressure.
The group also said tonnage mined volumes were hit by the suspension of its Mecklenburg mine in South Africa and by the lockout at its Tavas and Kavak mines in Turkey.
"The ferrochrome market remains difficult to predict with signs of recovery during this 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," said Afarak Chief Executive Danko Koncar.
Ararak shares were untraded on Thursday, quoted at 31.5 pence.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
Copyright 2014 Alliance News Limited. All Rights Reserved.
