Afarak Group, the ferrochrome and chrome ore producer, reported first-half revenue of EUR 57.1 million, down 25.9% from EUR 77.1 million a year earlier.
The group swung to a loss for the period of EUR 0.7 million, compared with a profit of EUR 2.4 million in the first half of 2025.
Earnings (EBITDA) fell to EUR 1.6 million from EUR 6.9 million, with the EBITDA margin narrowing to 2.8% from 9%.
Processed material sold dropped 25.9% to 11,372 tonnes and tonnage mined declined 12.8% to 130,256 tonnes, though the group said performance improved against the second half of 2025.
Net financial items took a EUR 0.5 million hit from a fair value adjustment on foreign exchange forward contracts.
Cash flow from operations improved to EUR 1.5 million from EUR 0.1 million, while cash and cash equivalents stood at EUR 4.9 million at 30 June, down from EUR 7.3 million at the end of 2025.
Chief executive Guy Konsbruck said market conditions had been "very complicated" through 2026, with steep consumption declines in Europe's automotive and oil and gas sectors compounded by the Iran and Ukraine wars, prompting the group to cut low-carbon ferrochrome production to match demand.
The company expects demand for standard grade low carbon ferrochrome to improve after the summer, citing low industry inventories, while flagging continued pressure from a weak US dollar and cheap imports from Kazakhstan, Turkey, Brazil and India.
Konsbruck said he expects demand to pick up from September, "especially if a resolution of the Iran conflict could be reached quickly."
News Intelligence what this means for the company
Afarak's H1 revenue collapsed 25.9% to EUR 57.1 million as European automotive and oil & gas demand cratered, pushing the company into a EUR 0.7 million loss and compressing EBITDA margin to 2.8% from 9%. The ferrochrome producer is banking on a demand recovery after summer and a potential Iran conflict resolution, but faces structural headwinds: weak dollar, cheap imports from Kazakhstan/Turkey/Brazil/India, and a cash position of EUR 4.9 million that has shrunk 33% since year-end.
The company's margin compression and cash burn—despite operational cash flow improvement—signal that demand destruction, not just cyclical weakness, is the driver. Management's recovery thesis hinges on geopolitical resolution and inventory drawdown, both outside its control; the cash runway at current burn rates is a material constraint on its ability to weather a prolonged downturn.
Insights assembled by AI. Editor-reviewed and grounded in tickstock’s coverage and proprietary knowledge graph.
Content is for informational purposes only, not financial advice.
