Afarak Group (LSE:AFRK) reported a weaker financial performance for the first half of 2026 as softer demand for specialty alloys, reduced production volumes and geopolitical disruption weighed on its operations.
Revenue declined 25.9% year on year to €57.1 million, reflecting lower sales volumes of refined specialty alloys alongside a reduction in mined tonnage. EBITDA fell to €1.6 million, while the group moved into a €0.7 million loss for the period.
Profitability was also affected by unfavourable fair-value adjustments related to currency forward contracts. Despite the earnings decline, operating cash flow improved and Afarak maintained relatively modest net interest-bearing debt.
European ferrochrome demand remains subdued
Management described the 2026 trading environment as challenging, particularly for low-carbon ferrochrome in Europe. Consumption has been affected by weaker activity in important end markets including the automotive and oil and gas industries.
Geopolitical uncertainty has added further pressure, with conflicts involving Iran and Ukraine contributing to disruption across the wider market.
In response to softer demand, Afarak has reduced ferrochrome production to better align output with current consumption levels and limit the impact of excess supply.
Afarak sees potential recovery after summer
Despite difficult first-half conditions, management expects the market to begin recovering after the summer. Low inventory levels could provide support if demand strengthens, while increasing Chinese demand for chrome ore and higher prices offer another potentially positive factor.
Afarak is also working to diversify its operations and develop additional revenue streams, reducing its reliance on individual markets as it seeks to strengthen the group’s longer-term resilience.
More about Afarak Group SE
Afarak Group SE is a specialty alloys producer focused primarily on low-carbon ferrochrome and other processed alloy products.
The company operates specialty metals businesses in Southern Europe alongside ferroalloy and chrome ore operations in South Africa. Afarak’s shares are listed on Nasdaq Helsinki and the London Stock Exchange.
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