Core Viewpoint - Afarak Group SE has issued a profit warning, indicating a significant decrease in EBITDA for the full year 2025 despite an increase in revenue [1] Group 1: Financial Performance - The company reported revenue of 141.3 million Euro for 2025, but EBITDA is expected to be approximately 0.7 million Euro, a decline from 2.6 million Euro in 2024 [1] - The expected recovery in the stainless steel market did not occur in the second half of 2025, leading to continued pricing pressure and negatively impacting margins in the low carbon ferrochrome business [4] Group 2: Market Outlook - The market for standard grade low carbon ferro-chrome is anticipated to remain stable with modest upward potential, although a weak US dollar and cheap imports from Kazakhstan, Turkey, and India/China may hinder price increases [2] - Demand and prices in the specialty segment may see more substantial improvements [2] Group 3: Chrome Ore Business - The chrome ore business is expected to yield better margins, with plans to increase output of chrome ore concentrates in South Africa [3] - A new wash plant and solar energy plant are set to be commissioned by the end of September 2026, which will enhance production capabilities [3] - Delays in the commissioning of the Vlaakport wash plant and solar plant have been noted, with full capacity utilization expected within Q1 2026 [5]

Financial Performance - Revenue increased by 8% to EUR 77.1 million in H1 2025 compared to EUR 71.4 million in H1 2024 [7] - EBITDA improved to EUR 6.9 million with an EBITDA margin of 9.0%, up from EUR 4.2 million and 5.9% respectively in H1 2024 [7] - EBIT rose to EUR 5.9 million, with an EBIT margin of 7.7%, compared to EUR 3.1 million and 4.3% in H1 2024 [7] - Profit for the period reached EUR 2.4 million, a significant increase from EUR 0.5 million in H1 2024 [7] - Earnings per share improved to EUR 0.01 from EUR 0.00 in H1 2024 [7] Operational Highlights - Processed material sold increased by 28.8% to 15,354 tonnes, up from 11,922 tonnes in H1 2024 [7] - Tonnage mined decreased significantly by 20.5% to 149,410 tonnes, down from 187,958 tonnes in H1 2024 [7] - Cash flow from operations stood at EUR 0.1 million, recovering from a negative EUR 5.4 million in H1 2024 [7] - Interest-bearing debt increased to EUR 4.9 million from EUR 4.6 million as of June 30, 2024 [7] Market Outlook - The market for standard grade low carbon ferro-chrome is expected to remain stable with modest upward potential, although weak US dollar and cheap imports may impact prices [4] - The specialty segment may see more substantial improvements in demand and prices [4] - The chrome ore business is anticipated to produce better margins, with plans for increased output in South Africa [5] Strategic Developments - The company successfully completed the sale of its Ilitha and Zeerust mining assets, generating a gain of EUR 2.4 million [7] - A new wash plant and solar energy plant are planned to be commissioned by the end of September at the Vlaakport mine, enhancing production capabilities [5] - The company aims to focus on increasing output from the Mecklenburg mine following the sale of other assets [5] CEO Commentary - The CEO highlighted the improved EBITDA and profit margins achieved in a challenging market environment, despite geopolitical uncertainties and tariff escalations [6]