1
AFARAK GROUP SE
The Board of Directors Report 2025 and
the Annual Financial Statements
1 January-31 December 2025
Domicile: Helsinki
Company number: 0618181-8
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
2
Contents
THE BOARD OF DIRECTORS REPORT .................................................................................. 4
Our commitment .............................................................................................................. 4
SUSTAINABILITY, HEALTH AND SAFETY AT AFARAK GROUP ............................................... 4
1. Health and Safety ................................................................................................................. 4
2. Environmental protection, including water management, waste management, land
rehabilitation and emissions reduction. .................................................................................... 5
3. Community engagement and support ................................................................................... 5
ESG GOVERNANCE ............................................................................................................ 5
BUSINESS ETHICS .............................................................................................................. 5
DIVERSITY AND INCLUSION ............................................................................................... 5
CLIMATE-RELATED FINANCIAL DISCLOSURES ..................................................................... 7
GOVERNANCE .......................................................................................................................... 9
RISK MANAGEMENT .............................................................................................................. 10
STRATEGY .............................................................................................................................. 11
RISKS ..................................................................................................................................... 11
OPPORTUNITIES ..................................................................................................................... 14
METRICS AND TARGETS .......................................................................................................... 16
CORPORATE CARBON FOOTPRINT FACTSHEET FOR AFARAK GROUP SE .................................... 18
CONCEPTS RELATED TO WATER AND MARINE RESOURCES ...................................................... 19
THE FERROCHROME AND CHROME ORE MARKET ........................................................... 21
GROUP OPERATIONAL REVIEW ............................................................................................... 21
GROUP FINANCIAL PERFORMANCE ......................................................................................... 22
SEGMENTS REVIEW ........................................................................................................ 23
SPECIALITY ALLOYS SEGMENT ..................................................................................................... 23
FERROALLOYS SEGMENT ............................................................................................................. 24
RISK MANAGEMENT .............................................................................................................. 25
SHARE INFORMATION .................................................................................................... 25
KEY FIGURES ................................................................................................................... 30
SHARE-RELATED KEY INDICATORS ................................................................................... 31
EVENTS AFTER THE REPORTING PERIOD .......................................................................... 33
ANNUAL FINANCIAL STATEMENTS .................................................................................. 34
CONSOLIDATED FINANCIAL STATEMENTS, IFRS ............................................................... 35
CONSOLIDATED INCOME STATEMENT .................................................................................... 35
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME .................................................... 36
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ............................................................ 37
CONSOLIDATED STATEMENT OF CASH FLOWS ........................................................................ 39
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY, ............................................................ 40
1. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ............................................ 41
1.1 COMPANY INFORMATION ................................................................................................ 41
1.2 ACCOUNTING PRINCIPLES ................................................................................................. 41
1.3 GOING CONCERN .............................................................................................................. 53
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
3
1.4 BUSINESS COMBINATIONS AND ACQUISITION OF NON-CONTROLLING INTERESTS ............. 54
1.5 IMPAIRMENT TESTING ...................................................................................................... 54
1.6 OPERATING SEGMENTS .................................................................................................... 57
1.7 NOTES TO THE CONSOLIDATED INCOME STATEMENT ........................................................ 61
1.8 NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION ................................ 65
1.9 RELATED PARTY DISCLOSURES .......................................................................................... 85
1.10 COMMITMENTS AND CONTINGENT LIABILITIES ............................................................... 86
1.11
EVENTS AFTER THE REPORTING PERIOD...................................................................... 87
PARENT COMPANY’S FINANCIAL STATEMENTS (FAS) ...................................................... 88
INCOME STATEMENT (FAS)..................................................................................................... 88
STATEMENT OF FINANCIAL POSITION (FAS) ............................................................................ 89
STATEMENT OF CASH FLOWS (FAS) ......................................................................................... 91
2. NOTES TO THE FINANCIAL STATEMENTS OF THE PARENT COMPANY (FAS) .................. 92
2.1 Accounting Policies ........................................................................................................... 92
2.2 Notes to the income statement ........................................................................................ 93
2.3 Notes to assets ................................................................................................................. 94
2.4 Notes to equity and liabilities ........................................................................................... 96
2.5 Pledges and contingent liabilities ...................................................................................... 98
2.6 Other notes ...................................................................................................................... 98
SIGNATURES TO THE BOARD OF DIRECTORS REPORT AND THE FINANCIAL STATEMENTS101
THE AUDITOR’S NOTE ................................................................................................... 102
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
4
THE BOARD OF DIRECTORS REPORT
Dear Shareholders,
After a brief moderate peak in Q1, the business environment deteriorated again in 2025. The stainless-steel
demand was historically low, especially in Europe. Demand for low carbon ferro-chrome suffered from this fact.
We succeeded to substantially increase our sales, but the generated EBITDA of -0.2 M€ shows that the price
pressure from low-cost imports (India, Kazakhstan, Russia and China) weighed heavily on our margins. This was
further impacted by the weakening of the US Dollar against the Euro, which reduced the Euro-equivalent value
of USD-denominated revenues.
A setback in Cr Ore prices and some unexpected delays caused a below expectation result in our South African
Chrome Ore operation
Guy Konsbruck
CEO
Our commitment
Afarak vows to deliver its contribution to environmental and social sustainability through its production processes.
We believe that our efforts will support several United Nations’ resolutions on sustainability, such as decreasing
poverty and hunger, but also increasing gender equality, education and access to clean water.
Our most significant impact on local host communities lies in providing direct and indirect employment. We
support local communities in their needs related to education and infrastructure whilst supporting social causes.
SUSTAINABILITY, HEALTH AND SAFETY AT AFARAK GROUP
Afarak Group extracts, processes, markets and trades specialised metals and is trusted by a highly diversified
customer base that covers the aviation, nuclear, oil & gas and automotive industries. Our customers are leaders in
their sectors and look to their suppliers to uphold their high standards for ethical conduct, health and safety and
environmental protection. The communities in the regions where we operate also look to us to support their
economic development.
Our sustainability commitments and our work to date is designed to provide all our stakeholders with the assurance
that we are a well-managed business that respects people and the planet. Our programmes are built around three
broad categories:
1. Health and Safety
During 2025, the Group’s employees contributed approximately 1,141,926 working hours during which the
company suffered 46 accidents that caused loss of time. Lost Time Injury (LTI) is defined as any work-related
injury or illness which prevents a person from doing any work the day after the accident. In our factories we
continuously assess, monitor, and control the risks of our workers.
As part of our efforts to continually review and improve addressing the LTIs over the reporting period, we are
reviewing and updating our Health & Safety Policy and Procedures and look forward to reporting this more fully
in our next Annual Report.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
5
We conduct routine health checks on all sites; these checks also include drug and alcohol testing. We are
constantly reviewing the role of organising shifts in the mines to minimise any possible fatigue-related injuries.
2. Environmental protection, including water management, waste management, land
rehabilitation and emissions reduction.
We understand and recognise the critical importance of environmental protection, particularly in the extractives
sector. Our subsidiaries are working hard to introduce programmes to improve the management of water and
waste while also focusing on emissions reduction wherever possible. We started work to establish data collection
processes that will allow us to set our benchmarks and introduce realistic long-term targets to measure our
improved performance.
3. Community engagement and support
Based on the five-year Social and Labour Plan, our subsidiaries in South Africa are developing their relevant
activities. During 2025, the company supported employees through the payment of inflation compensation aids
in Turkey. We have provided social support to all our local communities.
ESG GOVERNANCE
We recognise the importance of robust governance to ensure Afarak manages its ESG-related risks and its
environmental and social impacts. The Board and Executive Committee takes a leading role, overseeing our
sustainability strategies and ensuring alignment with our corporate objectives. We have established clear roles
and responsibilities, to ensure we manage our ESG risks, deliver against our health and safety, environmental and
community goals, and improve our overall sustainability performance.
Afarak operates in highly differentiated national markets with differing national laws, preferences and cultures.
As a result, operational direction and management of sustainability lie primarily with national business managers,
who are best placed to ensure compliance with national legislation and market expectations. The Executive
Committee, which reports to the Board, therefore takes a holistic approach to overseeing the sustainability
initiatives implemented at a national level and take responsibility for ensuring that such initiatives are in line with
investor expectations.
BUSINESS ETHICS
Ensuring Afarak operates to the highest ethical standards is critical to our stakeholders including our employees,
customers, investors and regulators. Our Code of Ethics and policies ensure that standards are upheld by Afarak
and its suppliers. The Code of Ethics state the Group's commitment to ensuring an equitable, diverse and inclusive
workplace.
Additionally, to maintain strong business ethics, the Group has adopted and maintains policies on Human Rights,
Anti-Bribery and Anti-Corruption.
The whistleblowing procedure also lays down the process for making complaints on discrimination in the
workplace. The whistleblowing policy, as well as the contacts are available on the Group’s website
(https://afarak.com/)
DIVERSITY AND INCLUSION
Afarak seeks to build a working environment that enables full and active participation and embraces and
encourages diversity of thought and experience in order to maximise business performance.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
6
The Board is very cognisant of the ongoing desire from stakeholders for greater diversity in senior management
and boards.
The Board continues to seek to achieve greater diversity in the senior management of the Group and throughout
the organisation and continuing assessment of the Group’s diversity and inclusion approach in relevant areas.
Currently, the Group has not adopted a Diversity and Inclusion Policy.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
7
CLIMATE-RELATED FINANCIAL DISCLOSURES
Contents ..................................................................................................................................... 8
Summary ................................................................................................................................................. 8
Governance ................................................................................................................................ 9
Risk Management .................................................................................................................... 10
Strategy .................................................................................................................................... 11
Risks ......................................................................................................................................... 11
Opportunities .............................................................................. Error! Bookmark not defined.
Metrics and targets .................................................................................................................. 16
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
8
Introduction
Afarak demonstrates a strong commitment to environmental responsibility and is actively seeking to reduce its
CO₂ emissions and integrate environmentally sustainable innovation into its production processes. In line with
this ambition, this report covers the Group’s climate change governance, its integration with overall risk
management, the strategy in managing our climate-related issues and opportunities, and the metrics used to
measure progress towards our targets.
In line with UK Listing Rule 6.6.6R(8), the Company has assessed its climate-related disclosures against the
TCFD recommendations and recommended disclosures, as detailed in “Recommendations of the Task Force on
Climate-related Financial Disclosures” (2017) and the additional guidance as set out in the TCFD 2021 Annex,
“Implementing the Recommendations of the Task Force on Climate-related Financial Disclosures” (“TCFD
Annex”) including Section C “Guidance for All Sectors” and Section E “Supplemental Guidance for
Non-Financial Groups”.
The Company’s disclosures are consistent with 9 of the 11 TCFD recommendations. At present, the Group has
not set specific targets to manage climate risks and opportunities or conducted formal resiliency analysis
considering the impact of all climate risks on financial performance or position. The Company is progressing
enhancements in these areas and expects formal targets to be established as part of the transition planning
exercise. The Group has undertaken limited quantification of its risk exposure under different climate scenarios,
which it intends to develop in future reporting cycles.
Figure 1: The table below sets out the 11 TCFD recommendations and where the related information can
be found within this report:
Recommendation
Recommended disclosures
Reference
Governance
Disclose the organisation’s
governance around
climate-related risks and
opportunities
a) Describe the Board’s oversight of climate-related risks
and opportunities
Page (9)
b) Describe management’s role in assessing and managing
climate-related risks and opportunities
Page (9-10)
Strategy
Disclose the actual and
potential impacts of
climate-related risks and
opportunities on the
organisation’s businesses,
strategy, and financial
planning where such
information is material
a) Describe the climate-related risks and opportunities the
organisation has identified over the short, medium, and
long term
Page (11)
b) Describe the impact of climate-related risks and
opportunities on the organisation’s businesses, strategy
and financial planning
Page (11)
c) Describe the resilience of the organisation’s strategy,
taking into consideration different climate-related
scenarios, including a 2°C or lower scenario
N/A
Risk management
Disclose how the organisation
identifies assesses, and
manages climate-related risks
a) Describe the organisation’s processes for identifying
and assessing climate-related risks
Page (10-11)
b) Describe the organisation’s processes for managing
climate-related risks
Page (10-11)
c) Describe how processes for identifying, assessing and
managing climate- related risks are integrated into the
organisation’s overall risk management
Page (10-11)
Metrics and targets
Disclose the metrics and
targets used to assess and
manage relevant
climate-related risks and
a) Disclose the metrics used by the organisation to assess
climate-related risks and opportunities in line with its
strategy and risk management process
Page (16-17)
b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3
Greenhouse Gas (GHG) emissions, and the related risks
Page (16-17)
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
9
opportunities where such
information is material
c) Describe the targets used by the organisation to manage
climate-related risks and opportunities and performance
against targets
N/A
GOVERNANCE
Board level
Board of Directors
The Board of Directors (BoD) bears the highest responsibility for monitoring sustainability-related risks and
ESG issues. Headed by the Chairman, the BoD is responsible for approving and evaluating ESG strategies and
analysing the impacts, risks and opportunities of all sustainability issues affecting the company, including for
climate change management. The Board is supported and informed on climate-related issues via the pathways as
detailed in Figure 2. This structure ensures that any potential impacts of climate change are incorporated into
the review of Group strategy, business plans, and risk management. Specifically, the BoD oversees the
Executive Management Team (EMT) and the Audit Committee to ensure that policies and risk management
processes are implemented appropriately.
Afarak’s BoD holds regular meetings at least four times a year to monitor and manage strategic, financial and
operational issues. Climate risk is a subject of discussion at least twice annually, with continuous discussion at
each Board meeting regarding the various strategic
initiatives underway that reduce the Group’s
emissions footprint and drive greater resource
efficiency. Where required, additional resolutions
may be organised for further discussion on specific
climate-related projects, strategy, and capital
allocation decisions.
In addition, a strategy meeting is held at least once
a year, attended by the BoD, the EMT and the
Corporate Management Team (CMT). The aim of
this meeting is to review and agree strategic
objectives and define the long-term direction of the
company. Although no Board members are
formally designated as climate experts, the Board
as a whole maintains an up-to-date and commercial
level of awareness and understanding of climate
change and related risks and opportunities for the
business, which informs its oversight of climate-
related matters.
In 2025, the Board’s discussions included projects relating to climate change, such as reductions of tailings
volumes in Turkey, the reintegration of slag into other industries under our zero waste project, investment in
renewable energy generation in Germany, and installation of solar panels in South Africa.
From a governance perspective, sustainability and energy efficiency considerations are embedded at Board level
through the Health, Safety and Sustainable Development Committee, ensuring strategic oversight of climate-
related capital allocation and transition planning.
Executive Management Team
The EMT is responsible for implementing ESG strategies, monitoring IROs and risk management. Risk factors,
opportunities, and their impact are regularly reviewed by the EMT to ensure that appropriate management plans
are implemented. The EMT meets at least once a year for a strategy meeting with the CMT and the BoD. The
EMT reports on risk reviews to the BoD on a quarterly basis. In addition, the EMT submits half-yearly interim
financial reports to the BoD.
The EMT acts as a supportive and advisory body that does not make any independent decisions. However, it
provides input and recommendations that are implemented either by the CEO, a responsible EMT member or
the BoD, and is present (either online or in-person) at every board meeting to ensure all climate-related issues
are efficiently reported up to the Board. This model ensures that all decision-making processes remain under the
control of the highest levels of management, in particular the CEO and the BoD.
Figure 2: Afarak Climate Governance diagram
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
10
In particular, the Chief Compliance Officer (CCO) monitors the legal and regulatory requirements in
sustainability, including compliance with the reporting standards. He also acts as ESG manager at Group level.
Afarak’s BoD and EMT take targeted measures to ensure that appropriate skills and expertise are in place at
both operational and strategic levels to monitor and develop sustainability issues. The clear division of tasks
between operational implementation and strategic responsibility aims to ensure that sustainability expertise is
leveraged at a detailed level and feeds into strategic decisions at management level. Members of relevant bodies
regularly take part in training sessions on current sustainability topics. This training covers legal requirements
such as the CSRD and the strategic ESG objectives to ensure that the company is always up to date. For
specific sustainability issues, the bodies call in external consultants or organisations to assist with specific
sustainability issues or with the development of new strategies. The executive bodies regularly review existing
skills and knowledge and continuously adapt their strategies to proactively meet future requirements and
sustainably promote the company’s development.
Management level
Corporate Management Team
The Corporate Management Team (CMT) comprises the national managing directors and senior functions
responsible for compliance with national laws and local ESG requirements in the respective regions in which
Afarak operates. They ensure the direct implementation of the company’s strategic guidelines in the operational
business.
Site managers, via the CMT, report primarily to the EMT which serves as the central interface for the
coordination and monitoring of operational activities. The EMT reviews and consolidates the CMT’s reports
before strategically relevant issues are forwarded. The CMT meets at least once a year for a strategy meeting
with the EMT and the BoD, and receives regular reports on the main sustainability impacts, risks and
opportunities affecting the Group at least every six months and sometimes quarterly.
ESG Team
Afarak’s ESG team was established to meet CSRD reporting requirements and support the company’s ESG
objectives. Led by Dr. Stefano Bonati, CCO and ESG Manager, the team helps to ensure compliance with
international ESG standards and regulatory requirements. The team coordinates strategies in the areas of
environmental, social and governance, including the assessment of risks such as carbon accounting and the
development of climate strategies.
The team forms a central unit for the transparent communication of environmental, social and governance
aspects to internal and external stakeholders. It reports directly and continuously to the EMT on ESG-related
findings; consolidates the ESG data and related climate risk information from all operating locations to forward
on to the BoD; and ensures their compliance with current reporting obligations. A key focus is on developing
strategies that will enable a gradual expansion of reporting in the coming years in order to meet future
regulatory and market-specific requirements.
Afarak works closely with industrial bodies and associations to promote dialogue with political institutions and
member companies about sustainability, climate protection, energy efficiency and responsible production. The
guidelines and insights offered by the International Chromium Development Association (“ICDA”) and
EUROALLIAGES support companies in complying with international standards and further developing their
ESG strategies.
RISK MANAGEMENT
In the 2024 reporting period, Afarak conducted a comprehensive double materiality assessment to identify the
key sustainability issues that are of strategic importance to the company and its stakeholders. The analysis forms
the basis of Afarak’s climate risk assessment, with climate-related risks and opportunities incorporated into the
Group’s overall risk management framework to ensure that their importance is comparable.
The assessment covered all our material operational locations and considered transition risks/opportunities
arising across our value chain. All categories of risks and opportunities from the TCFD guidance were
considered, although not all categories were deemed to be relevant to Afarak. The climate-related risk
assessment will be renewed at least every three years to ensure it is aligned with current and relevant
information.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
11
Within the double materiality assessment, physical climate risks, in particular water stress in certain regions,
were considered at a qualitative level. Potential risks to affected sites were identified using the WRI Water Atlas
and corresponding mitigation measures were described. However, a separate site-specific physical risk
assessment using defined temperature pathways (e.g. 1.5°C or 2°C) has not yet been conducted. We intend to
further develop this approach to assess resilience under different temperature pathways in future reporting
cycles.
Risks and opportunities are assessed according to their probability of occurrence, with a scale from 1 (Rare) to 5
(Almost certain). Potential financial impact is assessed on a scale from 1 (<€200,000) to 5 (>€8 million). Risks
and opportunities are assessed to be material by combining likelihood with financial impact, with both assessed
on a 5-point scale.
Figure 3: Risk Likelihood scale
Risk likelihood
Description
Almost certain
The event is expected to occur in most circumstances
Likely
The event may probably occur in most circumstances
Possible
The event should occur at some time
Unlikely
The event could occur at some time
Rare
The event may occur only in exceptional circumstances
STRATEGY
Time horizons for the climate-risk assessment were determined in line with the time horizons stipulated by
ESRS 1: short- (0-1 year), medium- (2-5 years), and long-term (5+ years). The short-term time horizon covers
our immediate in-year actions, the medium-term includes our near-term business strategy, and the long-term
covers the useful life of the Group’s assets and ensures that the risk assessment allowed proper time for climate-
related risks to manifest.
Afarak recognises that the tangible effects of climate change and increasing demands for sustainable business
practices present both risks and opportunities for the Group. As of 2025, the Group has not yet carried out a
resilience analysis of its strategy and business model in relation to climate change. However, such an analysis is
planned as part of the Climate Change Transition Plan, which is intended to cover the extended, mandatory
regulatory reporting. The plan is scheduled for completion by the end of 2026.
While scenario analysis of different physical risks has not yet been conducted, the Group has undertaken limited
scenario analysis of transition risk exposures where applicable, to understand how different climate outcomes
may affect the behaviour of risks and thereby improve the resilience of the business to climate change. The
following climate scenarios were explored:
•
Net Zero 2050 (NZE): an ambitious scenario which sets out a narrow but achievable pathway for the
global energy sector to achieve net zero CO2 emissions by 2050. This meets the TCFD requirement of
using a “below 2°C” scenario and is included as it informs the decarbonisation pathways used by the
Science Based Targets initiative (SBTi).
•
Stated policies scenario (STEPS): a combination of physical and transitions risk impacts as temperatures
rise by around 2.5°C by 2100 from preindustrial levels, with a 50% probability. This scenario is included
as it represents a base case pathway with a trajectory implied by today’s policy settings.
No effects of climate-related risks are reflected in any judgements and statements applied in the financial
statements. Any mitigation or required investment is currently assumed to be covered and integrated into the
Group’s strategy. We will continue to monitor the climate exposure and action plans through the Group’s risk
management framework, whilst developing our analysis as new data is made available to us.
RISKS
Five key climate-related risks have been identified as follows:
Figures 4-8: Climate-related risks
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
12
Risk 1
High investment costs due to conversion to CO2-neutrality
(buildings, products and processes)
Type
Transition risk – Technology risk
Area
Own operations
Primary potential financial impact
Increased CAPEX
Time horizon
Medium- to long-term
Likelihood
Likely
Impact
Major
Location or service most impacted
Germany, South Africa
Related metric(s)
Scope 1 & 2 emissions; emissions intensity; renewable electricity
share; decarbonisation CAPEX %
Risk 2
Physical climate risks in own operations
Type
Physical risk - Acute
Area
Own operations
Primary potential financial impact
Increased insurance premiums, business interruption, asset damage
Time horizon
Medium- to long-term
Likelihood
Possible to Likely
Impact
Moderate to Major
Location or service most impacted
Turkey, South Africa
Related metric(s)
% assets in high-risk zones; water consumption in high-risk areas; %
recycled water; weather-related claims
Risk 3
Dependence on energy suppliers
Type
Transition risk – Market risk
Area
Own operations
Primary potential financial impact
Increased operating costs
Time horizon
Short- to medium-term
Likelihood
Likely
Impact
Major
Location or service most impacted
Germany
Related metric(s)
Electricity cost; % self-generated
Risk 4
Dependence on market prices
Type
Transition risk – Market risk
Area
Own operations, downstream
Primary potential financial impact
Revenue volatility
Time horizon
Short- to medium-term
Likelihood
Likely
Impact
Moderate to Major
Location or service most impacted
Germany, South Africa
Related metric(s)
Average realised ferrochrome, chrome ore prices; % internally
sourced ore
Risk 5
Increasing demands (customer and regulatory) on products in
terms of sustainability aspects such as recyclability require
considerable investment
Type
Transition risk – Market risk
Area
Own operations, downstream
Primary potential financial impact
Increased R&D and CAPEX
Time horizon
Medium- to long-term
Likelihood
Possible
Impact
Moderate to Major
Location or service most impacted
Downstream markets
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
13
Related metric(s)
Revenue from activities in climate-intensive sectors
1) High investment costs due to conversion to CO2-neutrality (buildings, products and processes)
On the one hand, the expansion of photovoltaic systems requires considerable resources in order to sustainably
support the energy intensive processes. In addition, the buildings at the production site, which are over 100
years old, need to be adapted to current energy standards. Added to this is the lack of industrial electricity in
Germany, which represents another significant challenge. Furthermore, the constant review of new measures to
achieve CO2 neutrality is an important part of the long-term strategy and requires continuous investment.
To address the high capital expenditure associated with decarbonisation, Afarak is pursuing a portfolio of
operational, technological and governance measures. A key initiative is the development of its own solar power
generation capacity in South Africa. At the Vlakpoort site, the planned commissioning of a new wash plant in
combination with a solar energy installation is intended to reduce reliance on the national electricity grid,
mitigate exposure to power supply constraints and lower long-term energy costs and emissions intensity.
In parallel, Afarak continues to make ongoing investments in plant and infrastructure to maintain operational
resilience and progressively modernise its asset base. This includes the gradual electrification of selected
underground mining equipment and continuous optimisation of energy-intensive processes, particularly in
ferrochrome production, to improve energy efficiency and reduce carbon intensity over time.
2) Physical climate risks in own operations
Physical climate risks include extreme weather events such as droughts, floods and heatwaves, which are
exacerbated by climate change. These events can have a significant impact on infrastructure and operational
processes.
To mitigate physical climate risks across its operations, Afarak has implemented targeted environmental and
operational controls, particularly in water-stressed regions. At sites exposed to elevated water scarcity risks,
such as in Turkey, the company has introduced closed-loop water recycling systems. These systems reduce
overall freshwater abstraction, limit dependence on external water sources and enhance operational resilience
during drought conditions.
In addition to water stewardship measures, Afarak applies preventive environmental monitoring and technical
protection measures to safeguard infrastructure and maintain business continuity in the face of extreme weather
events, including floods and heatwaves. These controls are intended to reduce operational disruption and asset
damage arising from climate-related hazards.
3) Dependence on energy suppliers
Ferrochrome production in Germany is the most energy-intensive process in the company and requires the
operation of smelting furnaces with high electricity consumption. This location is particularly dependent on
German electricity market prices on the futures and spot market. Fluctuations in electricity prices can have a
significant impact on production costs and profitability.
To reduce its exposure to energy supplier dependency Afarak is pursuing a combination of diversification,
efficiency and financial risk management measures. Concrete steps are already underway in Germany, where a
photovoltaic system installed on the crushing hall building generated approximately 700 MWh of electricity by
the end of 2025, alongside measures such as LED lighting conversion (approximately 21,000 KWh/year
savings). The company is evaluating the feasibility of additional solar energy projects at selected sites, with the
objective of increasing the share of self-generated renewable electricity and reducing structural reliance on
external grid supply.
At the operational level, Afarak is implementing ongoing optimisation of smelting processes at the German site.
Given that ferrochrome production is highly electricity-intensive, incremental improvements in furnace
efficiency and process control can materially reduce specific energy consumption per tonne of output, thereby
lowering sensitivity to electricity price fluctuations. To support structured energy management, Afarak has also
implemented ISO 50001 compliant energy management software for improved monitoring and optimisation of
plant energy flows.
Additionally, the Group has commissioned a 1.5 MWp solar plant in South Africa with 3.0 MWh battery
storage, which is expected to replace just under 1,000 MWh of grid electricity annually. In addition to two 550
kVA back-up diesel generators, this plant further strengthens the business’s resilience to grid volatility.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
14
From a financial and risk governance perspective, energy price volatility is continuously monitored within the
Group’s broader financial and risk management framework. This includes oversight of exposure to futures and
spot market price movements in the German electricity market, enabling management to assess cost impacts and
adapt procurement or operational strategies accordingly.
4) Dependence on market prices
Dependence on market prices for chrome ore and ferrochrome represents a key risk. Although Afarak supplies
itself with the most important raw material (chrome ore) for ferrochrome production, thereby reducing its
dependence on raw material prices, the volatility of market prices for its own products (chrome ore and
ferrochrome) remains crucial for profitability and competitiveness.
To mitigate its exposure to volatility in chrome ore and ferrochrome market prices, Afarak pursues a vertically
integrated operating model. By supplying its own chrome ore for ferrochrome production, the company reduces
reliance on third-party raw material procurement and limits direct exposure to external ore price fluctuations.
This integration enhances cost control and provides greater visibility over input margins across the value chain.
In addition, Afarak has undertaken portfolio optimisation measures to concentrate on strategically relevant and
higher-performing assets. The divestment of the Ilitha and Zeerust mines in South Africa reflects a deliberate
focus on core operations with stronger operational synergies and margin potential. This streamlined asset base is
intended to improve resilience under adverse market pricing conditions.
The company is also investing in production expansion in South Africa, including increased chrome ore
concentrate output supported by the new wash plant at Vlakpoort. Higher operational efficiency and scale can
contribute to improved unit cost competitiveness, thereby partially offsetting price pressure during market
downturns.
5) Increasing demands (customer and regulatory) on products in terms of sustainability aspects such as
recyclability require considerable investment
The increasing sustainability requirements pose a financial risk for Afarak, as they require considerable
investment and adjustments. At the same time, it is a strategic necessity to meet these requirements to remain
competitive in the long term and take advantage of market opportunities.
To address the financial and strategic implications of increasing sustainability requirements, Afarak has
embedded sustainability considerations within its corporate governance framework. The establishment of a
Health, Safety and Sustainable Development Committee at Board level ensures structured oversight of
environmental, social and governance (ESG) matters, including regulatory developments, stakeholder
expectations and transition-related investments. This governance integration supports alignment between capital
allocation decisions and long-term sustainability objectives.
Operationally, the company undertakes ongoing investments in production facilities aimed at maintaining
efficiency and cost competitiveness. Continuous process optimisation and modernisation of assets contribute to
reduced resource consumption, improved energy performance and lower environmental intensity per unit of
output—thereby supporting compliance with evolving sustainability standards while protecting margins.
In addition, Afarak applies circular economy approaches, including the processing and utilisation of by-products
such as slag. These measures enhance resource efficiency, reduce waste streams and can generate incremental
value from secondary materials, partially offsetting the cost burden associated with stricter environmental
requirements.
OPPORTUNITIES
Four key climate-related opportunities have been identified as follows:
Figures 9-12: Climate-related opportunities
Opportunity 1
Improved profitability through investments in energy efficiency
improvements
Type
Opportunity – Resource efficiency
Area
Own operations
Primary potential financial impact
Lower operating costs
Time horizon
Short- to medium-term
Likelihood
Likely
Impact
Moderate to Major
Location or service most impacted
Germany, South Africa
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
15
Related metric(s)
Energy intensity; energy cost savings; Scope 1 & 2 emissions
intensity; % reduction in electricity per tonne
Opportunity 2
Increased demand for products for the generation of clean
energy technologies
Type
Opportunity – Products & Services
Area
Own operations, downstream
Primary potential financial impact
Revenue growth
Time horizon
Medium- to long-term
Likelihood
Possible to Likely
Impact
Major
Location or service most impacted
Germany, South Africa
Related metric(s)
Revenue from low-carbon ferrochrome; market share in low-carbon
markets; sales to energy transition sectors
Opportunity 3
Lower material costs thanks to improved resource efficiency
Type
Opportunity - Resource efficiency
Area
Own operations
Primary potential financial impact
Reduced material costs
Time horizon
Short- to medium-term
Likelihood
Likely
Impact
Moderate
Location or service most impacted
Germany, South Africa
Related metric(s)
Material cost per tonne; ore recovery; scrap/reject rate
Opportunity 4
Implementation of circular economy concepts can lead to savings
and new sources of income
Type
Opportunity - Resource efficiency
Area
Own operations
Primary potential financial impact
Reduced virgin material costs; new revenue streams
Time horizon
Medium- to long-term
Likelihood
Possible
Impact
Moderate to Major
Location or service most impacted
Germany, Turkey
Related metric(s)
% recycled inputs, revenue from by-products, waste diverted from
landfill; slag utilisation
1) Improved profitability through investments in energy efficiency improvements
Afarak is committed to continuously researching improvements in energy efficiency, not only to strengthen the
Group’s environmental sustainability, but also to promote profitability and competitiveness. Afarak leverages
energy efficiency improvements, production optimisation and its own energy generation as strategic tools to
enhance its cost structure, margin stability and competitiveness. As mentioned earlier, the installation of a
photovoltaic system, LED lighting upgrades, and deployment of ISO 50001 compliant energy management
software at the German EWW facility are already supporting more efficient energy use and improved visibility
of opportunities for optimization.
Operational upgrades in Turkey, including the replacement of diesel and electric engines with lower-impact
equipment and investments to improve mining efficiency have also enabled increased production while keeping
overall energy consumption broadly stable.
2) Increased demand for products for the generation of clean energy technologies
There is increasing demand for raw materials such as chrome ore and low-carbon ferrochrome for clear energy
technologies and essential applications in the energy transition, electromobility and other green technologies.
To capitalise on this demand, Afarak positions itself as a Western producer of Low Carbon Ferrochrome,
differentiating its offering in markets increasingly focused on supply chain security, geopolitical diversification
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
16
and sustainability credentials. As a Western-based supplier of this critical alloy, the company can serve
aerospace, defence, automotive and green energy technology sectors that prioritise reliable, transparent and
regulation-aligned sourcing.
In parallel, Afarak is pursuing expansion of chrome ore production in South Africa, supported by investment
decisions to increase chrome ore concentrate output. By strengthening upstream capacity, the company enhances
its ability to secure feedstock for ferrochrome production and to respond flexibly to rising market demand.
3) Lower material costs thanks to improved resource efficiency
A continuous increase in the efficiency of production processes leads to positive effects in the sustainability
chain. Increasing efficiency can lead to a reduction in electricity consumption and optimal use of raw materials,
resulting in lower material costs for Afarak.
Afarak leverages efficiency improvements in production and raw material utilisation, as well as vertical
integration, to stabilise and reduce material costs over the long term. Recent operational initiatives to support
these efficiency improvements include the renewal of diesel and electric engines in Turkey with lower-impact
equipment and investments to improve mining efficiency, enabling production increases while keeping overall
energy consumption stable. Likewise, implementation of ISO 50001 compliant energy management software in
Germany ensures that the business is better able to visualize plant energy flows and optimise production
processes.
4) Implementation of circular economy concepts can lead to savings and new sources of income
Promoting the circular economy is an opportunity for Afarak not only to achieve economic benefits by
conserving resources and reducing costs, but also to assume its ecological responsibility. This strengthens
competitiveness, fulfils regulatory requirements and creates trust among customers and stakeholders who are
paying more attention to sustainability.
A central lever is the utilisation of FeCr slag generated during ferrochrome production. Rather than treating slag
solely as waste, Afarak processes it for use as a secondary material, for example in road construction. This
approach reintegrates by-products into the economic cycle, reduces disposal requirements and can generate
incremental income streams. It also lowers the overall environmental footprint per tonne of ferrochrome
produced by improving material efficiency.
From a governance perspective, circular economy initiatives fall under the oversight of the Health, Safety and
Sustainable Development Committee at Board level. This ensures that resource efficiency, waste valorisation
and environmental performance are strategically embedded and aligned with broader sustainability objectives.
METRICS AND TARGETS
We monitor and report on relevant cross-industry metrics such as our Scope 1, 2 and 3 greenhouse gas (GHG)
emissions, calculated in line with the GHG protocol. We also track and disclose other key sustainability metrics
relating to water (see Concepts related to water and marine resources section). The metrics used to track our
identified climate-related risks and opportunities are outlined above.
Afarak has not yet adopted any specific measurable and results-oriented targets in connection with climate
change. Nevertheless, the Group intends to develop such targets as part of the planned Climate Change
Transition Plan. Once the transition plan has been finalized, specific measurable targets will also be defined and
evaluated using relevant key figures. The exact reference period from which progress will be measured
systematically and using specific indicators will also be defined. Until then, the assessment will be based on
existing general ESG practices and internal monitoring processes.
Although no formal targets have been set to date, Afarak addresses the effectiveness of the strategies and
measures with regard to the material impacts, risks and opportunities in the context of climate change.
Qualitative indicators are currently used to assess progress, such as internal audits and ESG reports that monitor
the effectiveness of the measures. Quantitative indicators such as emissions data and energy consumption
metrics are also part of the data collection to set benchmarks and support long-term performance targets. In the
manner described below, Afarak ensures that, despite the lack of specifically defined targets, the effectiveness
of environmental measures is always kept in view and continuously adjusted.
Afarak does not currently have an internal carbon pricing system. Instead, the Group focuses on direct measures
to reduce emissions, such as optimising processes and promoting renewable energies as well as the sustainable
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
17
optimisation of business activities. However, Afarak will regularly evaluate whether such a measure can
contribute to supporting its sustainability goals in the future.
As of 2025, the executive remuneration system does not contain any specific sustainability targets or ESG-
related remuneration components.
Scope 1, 2 and 3 GHG emissions, of Afarak Group is disclosed in the following chapter.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
18
CORPORATE CARBON FOOTPRINT FACTSHEET FOR AFARAK GROUP SE
The Corporate Carbon Footprint considered in this factsheet covering the Afarak sites of:
Elektrowerk Weisweiler GmbH (EWW), Germany
Vlakpoort Mine, South Africa
Afarak SA concentrator (Vlakpoort)
Mecklenburg Mine, South Africa
Türk Maadin Sirketi A.S. (TMS), Turkey
This fact sheet describes the Global Warming Potential (Corporate Carbon Footprint) of the annual
production of chrome ore, chrome concentrate and Low Carbon Ferrochrome (LC FeCr).
Figure 2:
Corporate Carbon Footprint for Afarak Group SE in 2025
In the following table the Scope categories are described which are in- and excluded.
Included
Excluded
Scope 1: Direct emissions onsite
Scope 2: Emissions of power purchased
Scope 3:
Category 1: Purchased goods and
services which are consumed in 2025
Category 3: Fuel and energy related
activities
Category 4: Upstream transportation and
distribution
Category 5: Waste generated in operation
Scope 3:
Category 1: the not consumed but
purchased goods
Category 2: Capital goods
Category 6: Business travel
Category 7: Employee
commuting
Category 8: Upstream leased assets
Category 9: Downstream transportation
and distribution
Category 10: Processing of sold
products Category 11: Use of sold
products Category 12: End of Life
Treatment of sold products
Category 13: Downstream leased assets
Category 14: Franchises
Category 15: Investments
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
19
CONCEPTS RELATED TO WATER AND MARINE RESOURCES
Afarak has been implementing site-specific measures to optimizing water consumption and minimizing the
impact on water resources. These activities include the use of modern water recycling systems, the introduction
of efficient wastewater treatment processes and the reduction of water pollution.
The focus will be on the continuation and further development of current measures to promote the sustainable
use and protection of water resources in a targeted and effective manner at the respective locations.
Adoption of general guidelines of the organizations
Afarak follows the general strategic guidelines of the ICDA and EUROALLIAGES to promote sustainable
processes. These guidelines are implemented through technologies for the reuse and recycling of process water.
At Afarak's sites, this is achieved through closed-loop water systems, which significantly reduce both fresh
water consumption and wastewater discharges.
Afarak also attaches great importance to minimizing water pollution. The company's own wastewater treatment
plants and optimized wastewater treatment processes significantly reduce the discharge of pollutants into water
resources. The company recycles up to 95% of the process water at the mine sites, which makes a significant
contribution to conserving resources.
In the spirit of promoting innovative solutions, Afarak uses alternative water sources such as rainwater and well
water to further reduce dependence on fresh water resources - an important factor, especially for mine sites in
water-scarce regions.
Site-specific requirements
Responsibility for the use of water and marine resources lies with the Group's sites in Germany, Turkey and
South Africa. These operate independently in order to take account of the varying legal conditions and
environmental protection requirements in the individual countries.
Location-oriented personal responsibility
At the locations in Germany, Turkey and South Africa, individually adapted water management measures are
implemented independently. This approach has proven to be sufficient to meet all applicable legal requirements
and standards in the area of water resources.
•
Ongoing measures: The activities implemented include water conservation, recycling and the
protection of local water sources, which have been operating successfully for years.
•
Optimizations: These systems are regularly reviewed and improved in order to further increase
efficiency and meet local environmental requirements.
Water consumption
Total water consumption and water intensity
The total water consumption of Afarak amounts to 5,659,047 m³ and is made up of the following sources:
Reporting year
Unit
Total water consumption
5,659,047
Volume (m³)
Total water consumption in water-prone areas, including
areas with high water stress
5,476,195
Volume (m³)
Total amount of water recovered and reused
127,087 Rainwater
5,142,000
95% of the process
water
Volume (m³)
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
20
Total stored water
5,000
Volume (m³)
Changes in water storage
0
Volume (m³)
Water intensity
43,991
Volume (m³) / total turnover
(€ million)
Water quality and water catchment areas
The water quality and the specific catchment areas are regularly monitored at each site. Drinking water is
sourced from local suppliers and meets the regionally defined drinking water standards. Rainwater and well
water are adapted to the conditions at the individual sites and are regularly checked for compliance with local
quality standards. There is a high level of water stress at the mine sites in South Africa and Turkey, as these
regions are characterized by limited water availability. This requires particularly efficient use of water in order
to minimize the impact on local water resources. Measures for water conservation and sustainable use, such as
the reuse of process water and the optimization of water consumption in operating processes, are therefore an
integral part of the operational water strategy.
Data collection and methodology
The water consumption data is based on direct measurements and regular records, using industry-specific factors
to categorize consumption from different sources. Standardized measuring devices and regional legal standards
such as local environmental regulations and ISO standards (where applicable) are used for data collection and
documentation.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
21
THE FERROCHROME AND CHROME ORE MARKET
Afarak Group operates primarily in the chrome market.
Globally, most of the chrome ore is used in metallurgical applications. However, chrome ore is also used, though
to a much lesser extent, in refractories, as foundry sands and as a chemical grade as shown below. Afarak produces
ferrochrome which is the main type of chrome used in metallurgical applications, in turn mainly driven by the
demand for stainless steel.
Therefore, chrome ore and ferrochrome are very much correlated to the developments of the stainless-steel
industry.
2025 Market overview
The expected recovery in the stainless steel market did not materialize in the second half of 2025. Continued
pricing pressure and a weaker US dollar negatively impacted margins in the LC ferrochrome business despite
ongoing cost-optimization measures.
Chrome ore prices decreased in the second half of the year, resulting also in lower margins due to subdued stainless
steel demand. Minor issues in the Vlakpoort wash plant and solar plant commissioning caused some delays, so
that we expect the plant to be at full capacity utilization within Q1/2026 now.
Market sentiment for Q1/2026
Our customer base is suffering
For the fourth year in a row the EU steel industry has contracted in 2025, after a brief increase in Q1. The share
of low priced imported steel in the EU is at a record high of 27%. In the case of stainless steel the share is 25%.
The output of steel in the EU has dropped by 3.4% year on year. Modest recovery is projected for 2026, but high
uncertainty is expected, given:
Global overcapacity of 680 M mt of steel worldwide. Europe is disadvantaged by high energy cost and disrupted
flows created by the 50% USA tariff implemented mid-2025.
Our margins are still under pressure
While the market price for Lc Fe-Cr started to show more sustained improvements in the last quarter 2025, the
falling USD exchange rate has wiped out most of the positive effect. Low Carbon Ferrochrome continues to be a
USD commodity.
CBAM and new EU safeguard measures have started to show some positive effects early 2026, but the cost of
energy and the rise of the carbon compliance cost is going to continue weighing heavily on European producers.
GROUP OPERATIONAL REVIEW
Operationally, 2025 presented higher sales and lower production for the Group.
Sales
The Group sales of processed material increased by 30.6% and stood at 28,407 (2024: 21,759) tonnes.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
22
Group mining
Group mining activity decreased by 31.3% to 251,257 (2024: 365,929) tonnes during the year under review.
Annual mining levels in the Speciality Alloys segment increased by 19.8% to 77,806 (2024: 64,945) tonnes.
Production within the FerroAlloys segment decreased significantly as the output decreased in South African mines
to 173,451 (2024:300,985 tonnes. This is mainly due to the disposal of the Zeerust mine mid-year.
Group processing
Group processing for 2025 increased by 20.3% to 27,626 (2024: 22,963) tonnes on account of higher demand.
Human resources
At the end of the year 2025, Afarak had 626 (602) employees. The average number of employees during the year
2025 was 623 (594).
GROUP FINANCIAL PERFORMANCE
2025 performance
The Group revenue was higher compared to prior year EUR 141.3 (128.6) million. Speciality Alloys Processed
material sold increased by 30.6%, to 28,407 (FY/2024: 21,759) tonnes.
The mining operation decreased by 31.3%, to 251,257 (FY/2024: 365,929) tonnes.
Loss for the year totalled EUR -8.9 (FY/2024:-7.2) million and EBITDA during the year decreased to EUR -0.2
(FY/2024: 2.6) million. EBIT stood at EUR -2.6 (FY/2024: -0.1) million.
EUR million
H1 2025
H2 2025
FY 2025
FY 2024
Revenue
77.1
64.2
141.3
128.6
EBITDA
6.9
-7.1
-0.2
2.6
EBIT
5.9
-8.5
-2.6
-0.1
Profit for the period
2.4
-11.4
-7.5
-7.2
EBITDA margin
9.0%
-11.1%
-0.2%
2%
EBIT margin
7.7%
-13.3%
-1.8%
-0.1%
Balance Sheet, Cash Flow and Financing
The Group’s total assets on 31 December 2025 stood at EUR 148.1 (2024:161.6) million and net assets totalled
EUR 95.8 (2024:112.1) million. During the second half, the translation differences on conversion of foreign
denominated subsidiaries was adjusted by EUR 8.2 million. The Group’s cash and cash equivalents, as at 31
December 2025, totalled EUR 7.3 (2024:4.0) million. Operating cash flow stood at EUR 2.8 (2024: -6.3) million.
The equity ratio stood at 64.7% (2024:69.3%). Afarak’s gearing at the end of the year was –4.1% (2024: -1.2%),
as the company kept low interest-bearing debt of EUR 3.4 (2024:2.6) million.
Investments, Acquisitions and Divestments
Capital expenditure for the full year of 2025 totalled EUR 11.8 (5.8) million. Capital Expenditure was mainly
incurred to sustain Group operations and new investments in renewable energy.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
23
SEGMENTS REVIEW
Financial Development and Assets and Liabilities by Segment
FY 2025
12 months
EUR '000
Speciality
Alloys
Ferro
Alloys
Unallocated
items
Eliminations
Group
total
Revenue
130,892
9,944
2,747
-2,305
141,278
EBITDA
4,314
-1,323
-3,203
0
-212
EBIT
2,325
-1,554
-3,383
0
-2,612
Segment's assets
150,481
42,451
6,114
-50,944
148,102
Segment's liabilities
44,426
44,931
23,780
-60,860
52,277
FY 2024
12 months
EUR '000
Speciality
Alloys
Ferro
Alloys
Unallocated
items
Eliminations
Group
total
Revenue
111,275
16,577
3,284
-2,495
128,641
EBITDA
1,715
4,289
-3,397
0
2,607
EBIT
-448
3,872
-3,570
0
-146
Segment's assets
154,750
49,429
4,630
-47,207
161,602
Segment's liabilities
42,270
42,478
21,034
-56,248
49,534
SPECIALITY ALLOYS SEGMENT
The Speciality Alloys business consists of Türk Maadin Şirketi A.S (“TMS”), the mining and beneficiation
operation in Turkey, and Elektrowerk Weisweiler GmbH (“EWW”), the chromite concentrate processing plant in
Germany. TMS supplies EWW with high quality chromite concentrate which produces speciality products
including specialised low carbon and ultra-low carbon ferrochrome. Chrome ore from TMS that is not utilised for
the production of specialised low carbon ferrochrome is sold to the market.
2025 in Review
Revenue for the year under review increased by 17.6% to EUR 130.9 (2024:111.3) million.
Nevertheless, processing levels increased by 20.3% when compared to last year. The increase in revenue resulted
in a higher EBITDA for the year to EUR 4.3 (2024:1.7) million, and EBIT of EUR 2.3 (2024:-0.4) million.
Revenue
€130.9mln
(2024: €111.3mln)
EBITDA
€4.3mln
(2024: €1.7mln)
EBIT
€2.3mln
(2024: - €0.4mln)
Mining production
77,806mt
(2024: 64,945mt)
Processing production
27,626 mt
(2024: 22,963mt)
Sales of processed material
28,407mt
(2024: 21,759mt)
Personnel
512
(2024: 479)
Production
Total production levels during 2025 increased by 19.9% to 105,432 (2024: 87,907) tonnes. The mining operations
at TMS remained consistent, with a 11.2% increase over last year. Processing levels at the EWW plant in Germany
was 20.3% higher than same period last year.
Sales
Speciality Alloys Processed material sold increased by 30.6%, to 28,407 (2024: 21,759) tonnes.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
24
Financial performance
The increase in sales resulted in a higher EBITDA for the year to EUR 4.3 (2024:1.7) million, and EBIT of EUR
2.3 (2024:-0.4) million.
EUR million
H1 2025
H2 2025
FY 2025
FY 2024
Revenue
72.0
58.9
130.9
111.3
EBITDA
5.9
-1.6
4.3
1.7
EBIT
5
-2.7
2.3
-0.4
EBITDA margin
8.1%
-2.7%
3.3%
1.5%
EBIT margin
6.9%
-4.5%
1.8%
-0.4%
FERROALLOYS SEGMENT
The FerroAlloys business consists of the Vlakpoort mine, Stellite mine, Mecklenburg mine and Zeerust mine in
South Africa. The business produces chrome ore for sale to global markets.
2025 in Review
The Ferro Alloys segment showed a decline in both revenue and mining due to the disposal of a South African
mine halfway through the year. Consequently, the EBITDA was EUR-1.3 (2024:4.3) million.
Revenue
€9.9mln
(2024: €16.6mln)
EBITDA
€-1.3 mln
(2024: €4.3mln)
EBIT
€-1.6mln
(2024: €3.9mln)
Mining production
173,451mt
(2024: 300,985mt)
Processing production
0mt
(2024: 0mt)
Sales of processed material
0mt
(2024: 0mt)
Personnel
97
(2024: 105)
Production
Operationally, the segment registered a decrease of 42.4% with total production falling to 173,451 (2024: 300,985)
tonnes.
Sales
The sales of mining material from the FerroAlloys segment decreased by 40.4% in 2025 to EUR 9.9 million when
compared to 2024 (EUR 16.6) million.
Financial performance
EUR million
H1/25
H2/25
FY25
FY24
Revenue
4.8
5.1
9.9
16.6
EBITDA
2.6
-3.9
-1.3
4.3
EBIT
2.5
-4.1
-1.6
3.9
EBITDA margin
54.7%
-76.3%
-13.3%
25.9%
EBIT margin
52.4%
-78.8%
-15.6%
23.4%
The disposal of the South African mine midyear led production to decrease by 42.4% within the FerroAlloys
segment which led to a decrease in revenue resulting in an EBITDA of EUR -1.3 (2024: 4.3) million during the
reporting period.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
25
RISK MANAGEMENT
Afarak’s prudent approach to risk management is a crucial component of our continued success and is present in
managing all aspects of our performance.
By understanding and managing risk, we provide greater certainty and confidence for our shareholders,
employees, customers, suppliers and host communities. In fact, we believe that successful risk management can
be a source of competitive advantage.
Our risks are viewed and managed on a Group-wide basis. As a truly global operation, managing diversity
in our operations, portfolio of products, geographies, economies and currencies is a key characteristic of our
risk management approach.
Risk management is one of the key responsibilities of the Board and its Audit and Health & Safety Committees.
2025 Developments
Afarak’s processing operations in Germany and South African mines are intensive users of energy, primarily
electricity. Fuel and energy prices globally have been characterised by volatility and cost inflation. In South Africa
the majority of the electricity supply, price and availability are controlled by one entity, Eskom. Increased
electricity prices and/or reduced, or uncertain electricity supply, or allocation may negatively impact Afarak’s
current operations, which could have an impact on the Group’s financial performance.
Management continued to work closely with the Units to provide continuous monitoring and oversight in
accordance with the Group’s risk management policy. Health & safety and the stated aim of ‘Zero-Harm’ will
continue to be a central pillar of the Company’s risk management strategy.
SHARE INFORMATION
On 31 December 2025, the registered number of Afarak Group SE shares was 277,041,814 (277,041,814) and the
share capital was EUR 1,000,000 (23,642,049.60). The EGM resolved on 29 January 2025 to reduce the share
capital of the Company from EUR 23,642,049.60 by EUR 22,642,049.60 in order to transfer funds to the fund for
invested unrestricted equity. After the decision, the share capital of the Company was EUR 1,000,000.00, and the
fund for invested unrestricted equity increased correspondingly by EUR 22,642,049.60.
On 31 December 2025, the Company had 15,641,514 (16,041,514) own shares in treasury, which was equivalent
to 5.65% (5.79%) of the issued shares. The total number of shares outstanding, excluding the treasury shares held
by the Company on 31 December 2025, was 261,400,300 (261,000,300).
Flagging notifications
There were no flagging notifications during 2025.
Trading information
Afarak Group SE’s shares are listed on the main market of the London Stock Exchange and on NASDAQ Helsinki.
Afarak shares are traded on the London Stock Exchange under the trading code AFRK and on the NASDAQ
Helsinki under code AFAGR. The ISIN code is FI0009800098 and the trading takes place in Pound Sterling
(GBP) and in Euros (EUR).
Share performance and Trading
At the beginning of the period under review as at December 2024, the Company’s share price was EUR 0.29 on
NASDAQ Helsinki and GBP 0.20 on the London Stock Exchange. At the end of the review period as at December
2025, the share price was EUR 0.26 and GBP 0.20 respectively. During the second half of 2025, the Company’s
share price on NASDAQ Helsinki ranged from EUR 0.28 to 0.33 per share and the market capitalisation, as at
31 December 2025, was EUR 72.03 (1 January 2025: 80.34) million. For the same period on the London Stock
Exchange, the share remained at GBP 0.20 per share and the market capitalisation was GBP 55.41 (1 January
2025: 55.41) million, as at 31 December 2025.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
26
On 29 January 2025 - an extraordinary general meeting for Afarak Group SE was held whereby it was resolved
to reduce the
a) share capital of the Company from EUR 23,642,049.60 by EUR 22,642,049.60 to transfer funds to the fund
for invested unrestricted equity.
After the measure the share capital of the Company will be EUR 1,000,000.00 and the fund for invested
unrestricted equity will increase correspondingly with EUR 22,642,049.60.
The entry into force of the reduction of the share capital is subject to the completion of the creditor protection
procedure set out in Chapter 14 of the Limited Liability Companies Act.
All practical measures related to the reduction of the share capital shall be decided by the Board of Directors.
b) share premium reserve as evidenced by the Company’s balance sheet as of 31 December 2023 by transferring
all funds recorded therein, i.e. EUR 25,223,189.79 to the Company’s fund for invested unrestricted equity.
The reduction of the share premium reserve is done without remuneration and will not have an effect on the
number of shares, holdings of shares nor rights attached to the shares.
The entry into force of the reduction of the share premium reserve is subject to the completion of the creditor
protection procedure set out in Chapter 14 of the Limited Liability Companies Act.
All practical measures related to the reduction of the share premium reserve shall be decided by the Board of
Directors.
On 31 March 2025 - changes in Afarak Group SE treasury shares took place pursuant to the share issue
authorization granted by the Company's Annual General Meeting held on May 31, 2024, the Board of Directors
has resolved on a directed share issue without payment. Based on the share issue 400,000 of the Company's
treasury shares (“Shares”) have now been transferred to CEO Guy Konsbruck. The Shares form a part of the
remuneration package under the CEO agreement.
After the execution of the share issue 15,641,514 treasury shares shall remain in the possession of Afarak,
representing approximately 5.65 per cent of the total shares and votes of the Company.
On 28 May 2025 - registration in the Finnish Trade register of resolution taken during Afarak SE Extraordinary
General meeting on 29 January 2025 to reduce share capital by EUR 22,642,049.60. The reduced amount has
been transferred to the reserve for invested unrestricted equity in accordance with the resolution. Following the
registration, the Company’s share capital amounts to EUR 1,000,000.
The reduction of share capital has no effect on the number of the Company’s shares.
On 28 May 2025 - registration in the Finnish Trade register of resolution taken during Afarak SE Extraordinary
General meeting on 29 January 2025 to reduce Company’s share premium reserve by EUR 25,223,189.79.
Following the reduction, the amount of the share premium reserve recorded in Afarak’s balance sheet is zero. The
reduced amount has been transferred to the reserve for invested unrestricted equity.
The reduction of the share premium reserve has no effect on the number of shares in the Company.
Shareholders
On 31 December 2025, the Company had a total of 8,587 shareholders (8,436 shareholders on 31 December
2024), of which eight were nominee-registered. The registered number of shares on 31 December 2025 was
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
27
277,041,814 (2024: 277,041,814).
LARGEST SHAREHOLDERS ON 31 DECEMBER 2025
Shareholder
Shares
%
1
Skandinaviska Enskilda Banken AB
150,992,553
54.50
2
Hino Resources Co. Ltd
36,991,903
13.35
3
Afarak Group Plc
15,641,514
5.65
4
Hanwa Company Limited
9,000,000
3.25
5
4capes Oy
5,730,000
2.07
6
Joensuun Kauppa ja Kone Oy
5,160,683
1.86
7
Nieminen Jorma Juhani
4,585,000
1.66
8
Osuusasunnot Oy
3,300,000
1.19
9
Kaikkonen Risto Aleksi
2,235,795
0.81
10
PM Ruukki Oy
2,100,000
0.76
Total
235,737,448
85.09
Other Shareholders
41,304,366
14.91
Total shares registered
277,041,814
100.00
Afarak Group SE’s Board members and Chief Executive Officer owned in total 2,850,000 (2024: 2,450,000)
Afarak Group SE shares on 31 December 2025, including shares owned either directly, through persons closely
associated with them or through controlled companies. This corresponds to 1.03% (2024: 0.9 %) of the total
number of registered shares on 31 December 2025.
SHAREHOLDERS BY CATEGORY 31 DECEMBER 2025
Number of shares
Number of
shareholders
% share of
shareholder
Number of
shares held
% of shares
held
1 - 100
2,678
31.15
106,787
0.04
101 - 1000
3,119
36.28
1,438,169
0.52
1001 - 10000
2,139
24.88
7,856,421
2.84
10001 - 100000
571
6.64
15,805,048
5.71
100001 - 1000000
69
0.80
14,616,602
5.28
1000001 - 10000000
8
0.09
34,488,633
12.45
10000001 & above
3
0.04
202,730,154
73.18
Total
8,587
100%
277,041,814
100.00
of which nominee-registered
8
0.10%
151,902,987
54.83
Total outstanding
261,400,300
94.35
SHAREHOLDERS BY SHAREHOLDER TYPE ON 31 DECEMBER 2025
% of share
Finnish shareholders
28.83
of which:
Non-financial corporations and housing corporations
7.53
Financial and insurance corporations
5.98
Households
15.32
Non-profit institutions serving households
0.00
Foreign shareholders
71.17
Total
100.00
of which nominee-registered
54.83
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
28
RESOLUTIONS OF THE ANNUAL GENERAL MEETING
Afarak Group SE’s Annual General Meeting was held in Helsinki on 3 June 2025.
The AGM adopted the financial statements and the consolidated financial statements and discharged the members
of the Board of Directors and the CEO from liability for the financial period 2024.
The AGM resolved that no dividend would be paid for 2024. However, the AGM authorized the Board of
Directors to resolve in its discretion, to decide on the distribution of an aggregate maximum of EUR 0.005 per
share as dividend from the retained earnings and/or as assets from the reserve for invested unrestricted equity.
The authorization was valid until 31 December 2025. On 24 December 2025, the Board made a separate resolution
to distribute a capital redemption from the reserve for invested unrestricted equity and was paid on 20th February
2026. The Company made a separate announcement of this Board resolution. The AGM also adopted the
Remuneration Report for the Company’s governing bodies.
THE BOARD OF DIRECTORS
The AGM resolved that the Board of Directors would comprise of three (3) members: Dr Jelena Manojlovic (UK
citizen) and Mr. Thorstein Abrahamsen (Norwegian citizen) were re-elected as Board members and Mr. Julien
Duniague (Swiss citizen) was elected as a new Board member.
The AGM resolved that the Non-executive Board Members shall be paid EUR 5,000 per month and the Chairman
of the board shall be paid an additional EUR 1,500 per month. Non-Executive Board Members who serve on the
Board's Committees shall be paid additional EUR 1,500 per month for committee work. Those members of the
Board of Directors that are executives of the Company are not entitled to receive any remuneration for Board
membership. Board Members shall be compensated for travel and accommodation expenses as well as other costs
directly related to Board and Committee work in accordance with the company's travel rules.
THE AUDITOR
The AGM resolved that the Company will pay the fee to the auditor against an invoice that is inspected by the
Company and that according to the recommendation by the Audit Committee, the Authorised Public Accountant
Tietotili Audit Oy was re-elected as the Auditor of the Company. Tietotili Audit Oy has informed the Company
that the individual with the principal responsibility at Tietotili Audit Oy, is Authorised Public Accountant Urpo
Salo.
THE SUSTAINABILITY REPORTING ASSURER
The AGM resolved that the Company will pay the fee to the sustainability reporting assurer against an invoice
that is inspected by the Company and that according to the recommendation by the Audit Committee, Authorized
Sustainability Audit Firm Tietotili Audit Oy was elected as the sustainability reporting assurer of the Company.
Tietotili Audit Oy has informed the Company that the sustainability reporting assurer with the main responsibility
would be authorized sustainability auditor Urpo Salo.
In line with the EU’s simplification to the Corporate Sustainability Reporting Directive (CSRD), the Board of
Directors have decided that no sustainability report will be proposed for the financial year 2025.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
29
Information presented by reference
The Group’s key financial figures, related party disclosures, information on share capital and option rights are
presented in the notes to the consolidated financial statements. The share ownership of the parent company’s
Board members and Chief Executive Officer is presented in the notes to the parent company’s financial statements.
The Corporate Governance Statement and the Remuneration Report are presented as separate reports in this
Annual Report.
For the purposes of United Kingdom Listing Authority listing rules (“LR”) 9.8.4C R, the information required to
be disclosed by LR 9.8.4 R can be found in the following locations:
Sector
Topic
Location
1
Interest capitalised
1.8. Notes to the statement
of financial position, 10.
Property, plant and
equipment.
2
Publication of unaudited financial information
Not applicable
4
Details of long-term incentive schemes
1.8. Notes to the statement
of financial position, 18.
Share-based payments
5
Waiver of emoluments by a director
Not applicable
6
Waiver of future emoluments by a director
Not applicable
7
Non pre-emptive issues of equity for cash
Not applicable
8
Item (7) in relation to major subsidiary undertakings
Not applicable
9
Parent participation in a placing by a listed subsidiary
Not applicable
10
Contracts of significance
1.8. Notes to the statement of
financial position, 1.9.2 Related
party transactions
11
Provision of services by a controlling shareholder
Not applicable
12
Shareholder waivers of dividends
Not applicable
13
Shareholder waivers of future dividends
Not applicable
14
Agreements with controlling shareholders
Not applicable
All the information cross-referenced above is hereby incorporated by reference into this Board of Directors
report.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
30
KEY FIGURES
FINANCIAL INDICATORS
2025
2024
2023
Revenue
EUR '000
141,279
128,641
153,655
EBITDA
EUR '000
-212
2,607
16,594
% of revenue
-0.2%
2.0%
10.8%
Operating profit (EBIT)
EUR '000
-2,612
-146
15,032
% of revenue
-1.8%
-0.1%
9.8%
Profit before taxes
EUR '000
-7,524
-5,297
11,965
% of revenue
-5.3%
-4.1%
7.8%
Return on equity
-8.6%
-6.6%
9.5%
Return on capital employed
3.7%
2.6%
18.8%
Equity ratio
64.7%
69.3%
65.1%
Gearing
-4.1%
-1.2%
-14.1%
Personnel at the end of the accounting
period
626
602
595
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
31
SHARE-RELATED KEY INDICATORS
2025
2024
2023
Earnings per share, basic
EUR
-0.03
-0.03
0.04
Earnings per share, diluted
EUR
-0.03
-0.03
0.04
Equity per share
EUR
0.37
0.43
0.41
Price to earnings
EUR
-8.67
-10.58
11.02
Average number of shares
1,000
261,400
260,972
260,478
Average number of shares, diluted
1,000
261,400
261,472
260,978
Number of shares at the end of the
period
1,000
277,042
277,042
267,042
Share price information (NASDAQ
Helsinki)
Average share price
EUR
0.31
0.31
0.52
Lowest share price
EUR
0.24
0.22
0.35
Highest share price
EUR
0.38
0.42
0.69
Market capitalisation
EUR '000
72.030
80,342
107,885
Share turnover
EUR '000
5,698
7,494
42,513
Share turnover
%
7.01
8.53
30.70
Share price information (London
Stock Exchange)
Average share price
EUR
0.23
0.24
0.23
GBP
0.20
0.20
0.20
Lowest share price
EUR
0.23
0.24
0.24
GBP
0.20
0.20
0.20
Highest share price
EUR
0.23
0.24
0.23
GBP
0.20
0.20
0.20
Market capitalisation
EUR '000
63,498
66,823
61,456
GBP '000
55,408
55,408
53,408
Share turnover
EUR '000
0
212
34
Share turnover
GBP '000
0
176
29
Share turnover
%
0.00
0.00
0.02
The company follows the new dividend policy and the board intends to decide about the actual dividend allocation
at a later stage. The Board of Directors resolved a capital redemption of EUR 0.005 per share on 24 December
2025. The resolution is based on the authorization granted by the Annual General Meeting held on 3 June 2025.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
32
FORMULAS FOR CALCULATION OF INDICATORS
Financial indicators
Return on equity
(Loss) / profit for the period / Total equity (average for the
period) * 100
Return on capital employed
((Loss) / profit before taxes + financing expenses) / (Total
assets – Interest-free liabilities) average * 100
Equity ratio
Total equity / (Total assets - prepayments received) * 100
Gearing
(Interest-bearing debt - liquid funds) / Total equity * 100
EBITDA
Operating (loss) / profit + depreciation + amortisation +
impairment losses
Operating (loss) / profit
Operating (loss) / profit is the net of revenue plus other
operating income, plus gain/loss on finished goods
inventory change, minus employee benefits expense,
minus depreciation, amortisation and impairment and
minus other operating expense. Foreign exchange gains or
losses are included in operating profit when generated
from ordinary activities. Exchange gains or losses related
to financing activities are recognised as financial income
or expense.
Share-related key indicators
Earnings per share, basic
(Loss) / profit attributable to owners of the parent company
/ Average number of shares during the period.
Earnings per share, diluted
(Loss) / profit attributable to owners of the parent company
/ Average number of shares during the period, diluted.
Equity per share
Equity attributable to owners of the parent / Average
number of shares during the period.
Distribution per share
Distribution / Number of shares at the end of the period. In
the attached table of share related key indicators, the
dividend and capital redemptions are presented in that
year's column on which results the pay-out are based; hence
the actual payment takes place during next year.
Price to earnings
Share price at the end of the period / Earnings per share
Average share price
Total value of shares traded in currency / Number of shares
traded during the period.
Market capitalisation
Number of shares * Share price at the end of the period.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
33
EVENTS AFTER THE REPORTING PERIOD
Stock Exchange Releases
On 24 February 2026, the Board of Directors issued a profit warning regarding the decrease of EBITDA for the
financial year 2025.
Flagging notification after the reporting period
On 20 January 2026- Afarak Group SE has issued a flagging notification pursuant to Chapter 9, Section 5 of the
Finnish Securities Markets Act, stating that the combined ownership of Jorma Nieminen and his companies 4capes
Oy and Osuusasunnot Oy in Afarak’s shares has exceeded the 5 percent threshold.
According to the notification, the direct and indirect shareholding of Jorma Nieminen in Afarak has increased to
13,897,071 shares, corresponding to 5.02 percent of Afarak’s total number of shares and voting rights.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
34
ANNUAL FINANCIAL STATEMENTS
1 January-31 December 2025
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
35
CONSOLIDATED FINANCIAL STATEMENTS, IFRS
CONSOLIDATED INCOME STATEMENT
1.1.-31.12.2025
1.1.-31.12.2024
EUR '000
Note
Revenue
1
141,279
128,641
Other operating income
2
8,141
5,405
Materials and supplies
-111,575
-100,205
Employee benefits expense
3
-26,948
-24,344
Depreciation and amortisation
4
-2,400
-2,753
Impairment
4
0
0
Other operating expenses
5
-11,109
-6,890
Operating loss/profit
-2,612
-146
Finance income
6
6,599
3,049
Finance expense
6
-11,511
-8,200
Profit before taxes
-7,524
-5,297
Income taxes
7
-1,415
-1,921
Profit for the year
-8,939
-7,218
Profit attributable to:
Owners of the parent
-8,933
-7,572
Non-controlling interests
-6
354
-8,939
-7,218
Earnings per share (counted from profit attributable
to owners of the parent):
8
basic (EUR), Group total
-0.03
-0.03
diluted (EUR), Group total
-0.03
-0.03
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
36
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
1.1.-31.12.2025
1.1.-31.12.2024
EUR '000
Note
Loss for the year
-8,939
-7,218
Other comprehensive income/(loss)
Items that will not be reclassified to profit and
loss
Remeasurements of defined benefit pension plans
863
1,166
Items that may be reclassified to profit and loss
Exchange differences on translation of foreign
operations - Group
-8,195
4,587
Other comprehensive income/(loss), net of tax
-7,332
5,753
Total comprehensive income/(loss) for the year
-16,271
-1,465
Total comprehensive income/(loss) attributable to:
Owners of the parent
-16,238
-1,796
Non-controlling interests
-33
331
-16,271
-1,465
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
37
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
EUR '000
Note
31.12.2025
31.12.2024
ASSETS
Non-current assets
Property, plant and equipment
9
48,547
46,925
Goodwill
10
45,223
49,779
Other intangible assets
10
5,091
4,942
Other financial assets
12
1,630
1,679
Deferred tax assets
18
980
478
101,471
103,803
Current assets
Inventories
13
18,856
28,829
Trade and other receivables
14
20,450
25,016
Cash and cash equivalents
15
7,325
3,954
46,631
57,799
Total assets
148,102
161,602
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
38
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONT.)
EUR '000
Note
31.12.2025
31.12.2024
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital
16
1,000
23,642
Share premium reserve
105
25,364
Legal Reserve
1,517
-47
Paid-up unrestricted equity fund
263,471
215,556
Translation reserve
-46,241
-38,073
Retained Earnings
-124,017
-114,397
95,836
112,045
Non-controlling interests
-10
23
Total equity
95,826
112,068
Non-current liabilities
Deferred tax liabilities
18
4,825
8,283
Interest-bearing debt
12
559
335
Pension liabilities
20
9,927
11,249
Other non-current debt
21
22
22
Provisions
19
9,574
11,776
24,907
31,665
Current liabilities
Trade and other payables
21
21,526
14,925
Provisions
19
134
167
Tax liabilities
21
2,868
516
Interest-bearing debt
12
2,841
2,260
27,369
17,869
Total liabilities
52,276
49,534
Total equity and liabilities
148,102
161,602
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
39
CONSOLIDATED STATEMENT OF CASH FLOWS
EUR '000
Notes
1.1.-31.12.2025
1.1.-31.12.2024
Operating activities
Loss from continuing operation
-8,939
-7,218
Adjustments to net profit:
Non-cash items
Depreciation, amortisation and impairment
4
2,400
2,753
Finance income and cost
6
5,829
5,718
Income taxes
7
1,415
1,354
Share-based payments
17
8
241
Proceeds from non-current assets
-879
-479
Working capital changes:
Change in trade receivables and other receivables
2,281
-412
Change in inventories
6,618
1,996
Change in trade payables and other debt
8,395
-1,355
Change in provisions
-1,946
-169
Interests paid
-820
-1,130
Interests received
311
702
Other financing items
-4,978
-5,228
Income taxes paid
-1,394
-3,068
Net cash from operating activities
8,301
-6,295
Investing activities
Capital expenditure on non-current assets, net
-5,577
-5,687
Other investments, net
-5
-15
Repayments of loan receivables and loans given net
493
-1,495
Net cash used in investing activities
-5,089
-7,197
Financing activities
Proceeds from borrowings
0
3
Repayments of borrowings
0
-49
Payment of principal portion of lease liabilities
0
0
Movement in short term financing activities
864
-602
Net cash used in financing activities
864
-648
Change in cash and cash equivalents
4,076
-14,140
Cash at beginning of period
3,954
18,032
Exchange rate differences
-705
62
Cash at end of period
7,325
3,954
Change in the statement of financial position
16
4,076
-14,140
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
40
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY,
EUR '000
A = Share capital
B = Share premium reserve
C = Paid-up unrestricted equity reserve
D = Translation reserve
E = Retained earnings
F = Legal reserve
G = Equity attributable to owners of the parent, total
H = Non-controlling interests
I = Total equity
Attributable to owners of the parent
EUR '000
Notes
A
B
C
D
E
F
G
H
I
Equity at 31.12.2023
23,642
25,223 215,359 -42,683 -115,512
18
106,047
-306
105,741
Profit for the period 1-
12/2024 +
comprehensive income
-7572
-7,572
353
-7,218
Other Comprehensive
Income
4,610
1,166
5,776
-23
5,753
Total comprehensive
income
4,610
-6,406
-1,796
330
-1,465
Share-based payments
197
197
197
Acquisition of non-
controlling interest
-9
-9
-99
-108
Hyperinflation
adjustment
(Turkish entities)
141
7,534
7,675
98
7,773
Other changes in equity
-4
-65
-69
-69
Equity at 31.12.2024
23,642
25,364
215,556
-38,073
-114,397
-47
112,045
23
112,068
Profit for the period 1-
12/2025 +
comprehensive income
-8,933
-8,933
-6
-8,939
Other Comprehensive
Income
-8,168
863
-7,305
-27
-7,332
Total comprehensive
income
-8,168
-8,070
-16,238
-33
-16,271
Share-based payments
8
8
8
Acquisition of
subsidiaries
3
3
3
Reduction of Share
Capital and Share
Premium
-22,642
-25,223
47,865
0
0
Reclassification
between reserves
-1,553
1,503
-50
-50
Other changes in equity
-35
42
61
68
68
Equity at 31.12.2025
1,000
105
263,471
-46,241
-124,017
1,517
95,836
-10
95,826
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
41
1. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.1 COMPANY INFORMATION
Afarak Group is a public limited company in Finland. Afarak Group is a chrome mining and minerals producer
focused on delivering sustainable growth with a speciality alloys business in southern Europe and a ferro alloys
business in southern Africa. The Group’s parent company is Afarak Group SE (business ID: 0618181-8)
(previously Afarak Group plc). The parent company is domiciled in Helsinki, Finland, and its registered address
is Kaisaniemenkatu 4, 00100 Helsinki, Finland. Copies of the consolidated financial statements are available at
Afarak Group SE’s head office or at the Company’s website: www.afarak.com.
Afarak Group SE is quoted on the NASDAQ Helsinki Oy (trading code: AFAGR) in the industrials group, in the
small-cap category, and on the main market of the London Stock Exchange (AFRK).
For the purpose of reporting according to ESEF regulations: the company changed name from Afarak Group plc
to Afarak Group SE during 2022. Afarak Group SE is the ultimate parent of the Group and its principal place of
business is Helsinki, Finland. The ESEF financial statements are audited.
1.2 ACCOUNTING PRINCIPLES
Basis of preparation
These consolidated financial statements of Afarak Group have been prepared in accordance with the International
Financial Reporting Standards (IFRS) and in conformity with the IAS and IFRS standards as well as the SIC and
IFRIC interpretations in force on 31 December 2025. In the Finnish Accounting Act and the regulations issued on
the basis thereof, International Financial Reporting Standards refer to the standards and their interpretations that
have been approved for application within the EU in accordance with the procedure prescribed in the EU
regulation (EC) 1606/2002. Notes to the consolidated financial statements also meet the requirements set forth in
the Finnish accounting and company legislation. The consolidated financial statements have been prepared on the
historical cost basis, unless otherwise explicitly stated. All values are rounded to the nearest thousand (€ 000),
unless otherwise explicitly stated.
Afarak Group SE’s Board of Directors resolved on 27 March 2026 that these financial statements are to
be published. According to the Finnish Companies Act, shareholders shall endorse the financial statements
in the Annual General Meeting convening after the financial statements have been published.
Presentation of financial statements
The consolidated financial statements provide comparative information in respect of the previous period. In
addition, the Group presents an additional statement of financial position at the beginning of the earliest period
presented when there is: a retrospective application of an accounting policy; a retrospective restatement; or a
reclassification of items in financial statements that has a material impact on the Group.
Principles of consolidation
The consolidated financial statements include the parent company Afarak Group SE, its subsidiaries, joint
ventures and associated companies. Subsidiaries refer to companies controlled by the Group. The Group gains
control of a company when it holds more than half of the voting rights or otherwise exercises control. The
existence of potential voting rights has been taken into account in assessing the requirements for control in cases
where the instruments entitling their holder to potential voting rights can be exercised at the time of assessment.
Control refers to the right to govern the financial and operating policies of an enterprise so as to obtain benefits
from its activities.
Acquired subsidiaries are consolidated from the time when the Group gained control, and divested subsidiaries
until the time when control ceased. All intra-group transactions, receivables, debts, and unrealised profits, as well
as internal distribution of profits, are eliminated when the consolidated financial statements are prepared. The
distribution of profits between parent company owners and non-controlling owners is shown in the statement of
comprehensive income, and the non-controlling interest of equity is shown as a separate item in the statement of
financial position under shareholders’ equity.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
42
Joint ventures are entities in which each venturer has an interest and there is a contractual arrangement establishing
joint control over the economic activity of the entity.
Associates are companies in which Afarak Group exercises significant influence. The Group exercises significant
influence if it holds more than 20% of the target company’s voting rights, or if the Group in other ways exercises
significant influence but not control. Associates have been consolidated in the Group’s financial statements using
the equity method. If the Group’s share of the associate’s losses exceeds the carrying amount of the investment,
the investment is recognised at zero value on the statement of financial position, and losses exceeding the carrying
amount are not consolidated unless the Group has made a commitment to fulfil the associates’ obligations.
Investment in an associate includes the goodwill arising from its acquisition.
Translation of foreign currency items
Amounts indicating the profit or loss and financial position of Group entities are measured in the currency of each
entity’s main operating environment (‘functional currency’). Figures in the consolidated financial statements are
presented in euro, the functional and presentation currency of the Group’s parent company, Afarak Group SE.
Transactions in foreign currencies have been recorded at the functional currency using the exchange rate on the
date of the transaction or mid reference rates of central banks. Monetary items denominated in foreign currencies
have been translated into the functional currency using the exchange rates at the end of each reporting period.
Exchange rate gains and losses are included in the revenue, operational costs or financial items, corresponding to
their respective origin. Hedge accounting has not been applied.
In the Group accounts, foreign subsidiaries’ income statements and statements of cash flows are converted into
euro by using average exchange rates for the period, and the statement of financial position is converted by using
the period-end exchange rate. The translation differences arising from this are recognised in other comprehensive
income. Translation differences arising from the elimination of the acquisition cost and post-acquisition equity
changes are also recognised in other comprehensive income. If and when the foreign subsidiary is partially or
fully divested, these accrued translation differences will be taken into account in adjusting the sales gain or sales
loss.
Goodwill, other assets and liabilities arising from acquisitions of subsidiaries are recognised in the Group accounts
using the functional currency of each acquired subsidiary. The balances in that functional currency have then been
translated into euro using the exchange rates prevailing at the end of the reporting period.
In accordance with IAS 21, any foreign exchange difference arising from Intra-group loans for which settlement
is neither planned nor likely to occur in the foreseeable future is, in substance, a part of the entity’s net investment
in that foreign operation. This is recognised in the group’s other comprehensive income and reclassified from
equity to profit or loss on disposal of the net investment.
Operating profit
IAS 1 Presentation of financial statements does not define the concept of operating profit. Afarak Group has
defined it as follows: Operating profit is the net amount derived by adding to revenue other operating income, less
materials and supplies, and expenses from work performed by the enterprise and capitalised, less costs from
employee benefits, depreciation and impairment losses, and other expenses. Shares of associated companies’ and
joint venture companies’ profit or loss are included in the operating profit to the extent to which they relate to the
Group’s core businesses. Exchange differences arising from operational transactions with third parties are
included in operating profit; otherwise they are recorded under financial items.
All other items of the income statement are excluded from operating profit.
IAS 1 amendment introduced the requirement for grouping of items presented in Other Comprehensive Income.
Items that are reclassified (or `recycled`) to profit or loss at a future point in time will be presented separately
from items which will never be reclassified. The amendment affected the presentation of Other Comprehensive
Income.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
43
Revenue recognition
The Group applies IFRS 15 Revenue from Contracts with customers standard. Income from the sale of goods is
recognised once the control of goods has been transferred to the buyer. Control is transferred either over time or
at a point in time. The transfer of control depends on, terms of delivery (Incoterms) and some of which have
transfer of risk to the customer before material is delivered to the final customer. The freight in conjunction with
these delivery terms may be regarded as a separate performance obligation, however as they are limited in number,
the Group does not consider the freight as being separate from the sale.
The most often used terms are FCA, CIF or FOB, under which the revenue is recognised when the goods are
assigned to the buyer’s carrier or loaded on board the vessel nominated by the buyer.
Generally, the Group receives short-term advances or cash against documents (CAD) from its customers. The
payment terms are usually up to 60 days from end of month or after consignment report for customers with
consignment agreement. The transaction price is based on official publications with premiums or discounts, while
spot business is done based on negotiations. Performance obligations are satisfied at delivery of the goods and
revenue is recognised based on the incoterms transfer of risk.
As typical in the business, preliminary invoices are issued for the mineral concentrates at the time of delivery.
Final invoices are issued when quantity, mineral content and pricing have been defined for the delivery lot.
Income not generated by the Group’s main businesses is accounted for as other operating income. The expenses
incurred from disposals of non-current assets or a disposal group of assets are deducted from the gain on disposal.
Pension liabilities
Pension arrangements in Afarak Group are classified as defined contribution plans or defined benefit plans
(Germany and Turkey). Payments for defined contribution plans are recognised as expenses for the relevant
period. The present value of obligation for the defined benefit plans has been estimated applying the Projected
Unit Credit Method and recognised as a non-current liability on the statement of financial position. The actuarial
gains and losses are recognised in other comprehensive income when they occur and the net defined benefit
liability or asset are presented in full on the statement of financial position.
Share-based payments
Option rights are measured at fair value at the time they were granted and recorded as expenses on a straight-line
basis during the vesting period. The expenses at the time the options were granted are determined according to
the Group’s estimate of the number of options expected to vest at the end of the vesting period. Fair value is
determined on the basis of an applicable option pricing model (e.g. Black-Scholes). The effects of non-market-
based terms and conditions are not included in the fair value of the option; instead, they are taken into account in
the estimated number of options expected to vest at the end of the vesting period. The Group updates the estimated
final number of options at the end of each reporting period. Changes in the estimates are recorded in the statement
of comprehensive income. When the option rights are exercised, the cash payments received from the
subscriptions adjusted with potential transaction costs are recorded under paid-up unrestricted equity reserve.
The Group from time to time directs free issues of shares to the members of the Board of Directors or key
executives, as approved by the AGM. The compensation is settled in shares and is accordingly recognised as
share-based payment in the Group's financial statements. The fair value of the granted shares is determined based
on the market price of the Afarak Group share at the grant date. The total fair value is therefore the amount of
granted shares multiplied by the share market price at grant date. The cost is recognised as expense in personnel
costs over the vesting periods and credited to equity (retained earnings).
Broad Based Black Economic Empowerment (BBBEE) transactions
The purpose of South African Broad Based Black Economic Empowerment (BBBEE) regulation is to enable
previously disadvantaged people meaningfully to participate in the South African economy. The Group is
committed to making a positive contribution towards the objectives of BBBEE. Where the Group disposes of a
portion of a South African based subsidiary or operation to a BBBEE company at a discount to fair value, the
transaction is considered to be a share-based payment (in line with the principle contained in South Africa
interpretation AC 503 Accounting for Broad Based Black Economic Empowerment (BBBEE) Transactions). The
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
44
discount provided or value given is calculated in accordance with IFRS 2 and recognised as an expense. Where
the BBBEE transaction includes service conditions, the expense is recognised over the vesting period. Otherwise
the expense is recognised immediately on the grant date.
Lease agreements (the Group as the lessee)
Leases of tangible assets where the Group possesses a material portion of the risks and benefits of ownership are
classified as financial leases. An asset acquired through a financial lease agreement is recognised at the fair value
of the leased object at the beginning of the lease period, or at a lower current value of minimum lease. An asset
obtained through a finance lease is depreciated over the useful life of the asset or the lease term, whichever is
shorter. The leases payable are divided into financial expenses and loan repayment during the lease term so that
the interest rate for the remaining loan is roughly the same each financial year. Leasing obligations are included
in interest-bearing liabilities. Lease agreements in which the risks and benefits typical of ownership remain with
the lessor are recognised in the statement of financial position as a right-of-use asset and a corresponding lease
liability at the date at which the lease asset is available for the use by the Group. Each lease payment is allocated
between the liability and finance cost. The finance cost is recognised in the income statement over the lease period.
The right-of-use asset is depreciated over the shorter of the asset’s useful life and the lease term on a straight-line
basis.
Impairment
At the end of each reporting period, the Group makes an assessment of whether there are any indications of asset
impairment. If such indications exist, the recoverable amount of the asset is estimated. In addition, goodwill is
assessed annually for its recoverable amount regardless of whether there are any signs of impairment. Impairment
is examined at the cash-generating unit level; in other words, the lowest level of entity that is primarily
independent of other entities and whose cash flows can be separated from other cash flows. Impairment related to
associates and other assets are tested on a company/asset basis.
The recoverable amount is the fair value of an asset less divestment costs, or the higher value in use. Value in use
means the present value of estimated future cash flows expected to arise from the asset or cash-generating unit.
Value in use is forecast on the basis of circumstances and expectations at the time of testing. The discount rate
takes into account the time value of money as well as the special risks involved for each asset, different industry-
specific capital structures in different lines of business, and the investors’ return expectations for similar
investments. An impairment loss is recorded when the carrying amount of an asset is greater than its recoverable
amount. If the impairment loss is allocable to a cash-flow-generating unit, it is allocated first to reduce the
goodwill of the unit and subsequently to reduce other assets of the unit. An impairment loss is reversed if a change
has occurred in circumstances and the recoverable amount of the asset has changed since the impairment loss was
recognised. An impairment loss recognised for goodwill is not reversed in any circumstances.
Goodwill is tested for impairment annually at year end; for the 2025 financial year, testing took place on 30 June
2025 for the Speciality Alloys business and the South African minerals processing business and on 31 December
2025 for all cash generating units. Impairment testing and the methods used are discussed in more detail in section
1.5 in the ‘Impairment testing’.
Financial income and expense
Interest income and expense is recognised using the effective interest method, and dividends are recognised when
the right to dividends is established. Unrealised changes in value of items measured at fair value are recognised
in the statement of comprehensive income. These items relate to currency forward contracts. Exchange rate gains
or losses that arise from intercompany loans that are considered as part of the net investment in the foreign entity
are included, net of any deferred tax effects, in the translation reserve within the equity. These exchange
differences are recognised in other comprehensive income while accumulated exchange differences are presented
in the translation reserves in the equity.
Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset
forming part of the cost of that asset, are capitalised if it is likely that they will provide future economic benefit
and can be measured in a reliable manner. Other borrowing costs are recognised as an expense in the period in
which they are incurred.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
45
Income taxes
Tax expenses in the statement of comprehensive income consist of the tax based on taxable income for the year
and deferred taxes. Taxes based on taxable income for the year are calculated using the applicable tax rates. Taxes
are adjusted with any taxes arising from previous years. Maltese companies’ income taxes are recognised by
applying the nominal income tax rate which is 35%. Six sevenths of this tax is credited to the shareholder. The
Maltese companies forms a fiscal unit and consequently the effective tax rate is 5%. Taxes arising from items
recognised directly in equity are presented as income tax relating to other comprehensive income.
Deferred taxes have been calculated for all temporary differences between the carrying amount and taxable
amount. Deferred taxes have been calculated using the tax rates set at the end of the reporting period. Deferred
tax assets arising from taxable losses carried forward have been recognised up to the amount for which there is
likely to be taxable income in the future, and against which the temporary difference can be used.
Tangible assets
Tangible assets have been measured at historical cost less accumulated depreciation and impairment losses. The
initial cost of an asset comprises its purchase price, costs directly attributable to bringing the asset into operation
and the initial estimate of the rehabilitation and decommissioning obligation. Heavy production machinery often
contains components with different useful lives, and therefore the component approach is applied. Material
component replacements and repairs are capitalised. The repair and maintenance of lighter machinery and other
intangible items are recognised as an expense when incurred.
Interest expenses are capitalised as part of the tangible asset’s value if and when the Group acquires or constructs
assets that satisfy the required terms and conditions.
Assets are depreciated over their useful lives using the straight-line method, except for the mineral resources and
ore reserves which are depreciated based on estimated or reported consumption. Land areas are not depreciated.
The estimated useful lives of assets are as follows:
Buildings
15–50 years
Machinery and equipment
3–15 years
Other tangible assets
5–10 years
Mines and mineral assets
Units-of-production method
The residual value of assets and their useful life are reviewed in connection with each financial statement and, if
necessary, they will be adjusted to reflect the changes that have occurred in the expected financial benefit. The
sales gains or losses arising from the decommissioning or divestment of tangible assets are included in other
operating income or expenses.
Mines and mineral assets
Measurement of mineral resources and ore reserves in business combinations
Mineral resources and ore reserves acquired in business combinations are recognised as separate assets. In the
recognition and measurement of mineral resources and ore reserves the Group utilises available third party reports
of the quantities, mineral content, estimated production costs and exploitation potential of the resource. The
probability of the ore reserve is also an essential factor. In the mining and minerals business, the probability is
commonly described by classifying a mineral resource into categories such as ‘proven’, ‘probable’, ‘inferred’ and
‘hypothetical’. There are also generally accepted standards for the classification of mineral resources in the
business, such as the standards of the South African Code for the Reporting of Exploration Results, Mineral
Resources and Mineral Reserves (‘SAMREC’). The measurement of ore reserves is based on estimated market
prices, estimated production costs and quantities. In the Group’s statement of financial position, mineral resources
and ore reserves are presented as tangible assets. Rehabilitation liabilities related to mines are included in their
cost of acquisition, and corresponding provision is recognised on the statement of financial position.
Exploration and evaluation expenses of mineral resources
Exploration and evaluation expenditure relates to costs incurred on the exploration and evaluation of potential
mineral reserves and resources when new potential ore reserves are sought, for example by exploratory drilling.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
46
Exploration and evaluation expenditure is carried forward as an asset if the Group expects such costs to be
recouped in full through the successful development of the area of interest; or alternatively by its sale; or if
exploration and evaluation activities in the area of interest have not yet reached a stage which permits the
reasonable assessment of the existence of economically recoverable reserves and active and significant operations
in relation to the area are either continuing or planned for the future. Exploration and evaluation expenditure
includes material and other direct costs incurred, for instance, by exploratory drilling and surveys. Overheads are
included in the exploration and evaluation asset to the degree to which they can be associated with finding and
evaluating a specific mineral resource. Exploration and evaluation assets are measured at cost and are transferred
to mine development assets when utilisation of the mine begins. The asset is then depreciated using the units-of-
production method. Assets are written off when it is determined that the costs will not lead to economic benefits
or expensed when incurred if the outcome is uncertain.
Exploration and evaluation assets are assessed for impairment if and when facts and circumstances suggest that
the carrying amount exceeds its recoverable amount. In particular, the impairment tests are carried out if the period
for which the Group has right to explore the specific area expires or will expire in the near future and future
exploration and evaluation activities are not planned for the area.
Exploration and evaluation assets acquired in conjunction with business combinations are accounted for at fair
value in accordance with the principles of IFRS 3.
Mine establishment costs
Mine establishment costs are capitalised as part of the mine’s acquisition cost and depreciated using the units-of-
production method when the production of the mine begins. The costs arising from changes in mining plan after
the production has begun are expensed as incurred.
Impairment
The value of mineral resources and ore reserves acquired in business combinations is tested for impairment if
there are indications of deterioration in the long-term ability to utilise the asset economically. In the test the cash
flows generated by the asset are assessed based on most recent information on the technical and economic
utilisation of the asset.
Goodwill and intangible assets identified at acquisition
Goodwill represents the portion of acquisition cost that exceeds the Group’s share of the fair value at the time of
acquisition of the net assets of the acquired company. Instead of regular amortisation, goodwill is tested annually
for potential impairment. For this purpose, goodwill has been allocated to cash-generating units or, in the case of
an associated company, is included in the acquisition cost of the associate in question. Goodwill is measured at
original acquisition cost less impairment losses. Changes in purchase considerations, for example due to earn-out
arrangements, relating to acquisitions carried out before 2010 have been recognised against goodwill in
accordance with the earlier IFRS 3.
The net assets of an entity acquired in a business combination are measured at fair value at the date of acquisition.
In connection with business combinations, the Group also identifies intangible assets that are not necessarily
recorded on the statement of financial position of the acquired entity. These assets include, for instance, customer
relationships, trademarks and technology. The assets are recognised at fair value and amortised over their useful
lives on a straight-line basis. The amortisation periods for these intangible assets are as follows:
Customer relationships: 2-5 years depending on contractual circumstances
Technology: 5-15 years
Trademarks: 1 year
Research and development costs
Research costs are always recognised as expenses. Mine development costs are capitalised as part of mining assets
and depreciated on a unit of production basis. The development costs, which primarily relate to the development
of existing products, are expensed as incurred.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
47
Other intangible assets
Other intangible assets are initially recognised on the statement of financial position at cost when the costs can be
reliably determined and it is probable that the expected financial benefits of those assets will be reaped by the
Group. Other intangible assets mainly relate to IT software utilised in support of the Group’s business operations
and they are amortised over 3-5 years on a straight-line basis.
Inventories
Inventories are measured at acquisition cost or a lower probable net realisable value. Acquisition costs are
determined using the average cost method. The cost of finished goods and work in progress comprises raw
materials, direct labour expenses, other direct expenses, and an appropriate share of fixed and variable production
overheads based on the normal capacity of the production facilities. In open pit mining operations, the removal
costs of overburden and waste material (stripping costs) are included in the cost of inventory. The net realisable
value is the estimated selling price that is obtainable, less the estimated costs incurred in completing the product
and the selling expenses.
Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, and subsequently measured at amortised cost, fair value
through other comprehensive income (OCI), and fair value through profit or loss in accordance with IFRS 9:
Financial Instruments.
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow
characteristics and the Group’s business model for managing them. With the exception of trade receivables that
do not contain a significant financing component or for which the Group has applied the practical expedient, the
Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value
through profit or loss, transaction costs. See note 13, in section 1.8. Notes to the Statement Of Financial Position,
for tabular presentation of financial instruments.
Trade receivables that do not contain a significant financing component or for which the Group has applied the
practical expedient are measured at the transaction price determined under IFRS 15: Revenue from Contracts with
Customers.
In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to
give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount
outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level.
The Group’s business model for managing financial assets refers to how it manages its financial assets in order to
generate cash flows. The business model determines whether cash flows will result from collecting contractual
cash flows, selling the financial assets, or both.
Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation
or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Group
commits to purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories: 1.Financial assets at
amortised cost (debt instruments);
2. Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments);
3. Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon
derecognition (equity instruments); and
4. Financial assets at fair value through profit or loss.
There have been no transfers of financial assets between fair value categories during the financial period. Afarak
has not changed its recognition or fair valuation methods during the financial period.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
48
1. Financial assets at amortised cost (debt instruments)
This category financial assets are measured at amortised cost if both of the following conditions are met:
•
The financial asset is held within a business model with the objective to hold financial assets in order to
collect contractual cash flows; and
•
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
For debt instruments at fair value through OCI, interest income, foreign exchange revaluation and impairment
losses or reversals are recognised in the statement of profit or loss and computed in the same manner as for
financial assets measured at amortised cost.
The remaining fair value changes are recognised in OCI. Upon derecognition, the cumulative fair value change
recognised in OCI is recycled to profit or loss.
The Group held loans receivable and trade receivables which were classified as being financial assets at amortised
cost.
2. Financial assets at fair value through OCI (debt instruments)
This category of debt instruments is measured at fair value through OCI if both of the following conditions are
met:
•
The financial asset is held within a business model with the objective of both holding to collect
contractual cash flows and selling; and
•
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
For debt instruments at fair value through OCI, interest income, foreign exchange revaluation and impairment
losses or reversals are recognised in the statement of profit or loss and computed in the same manner as for
financial assets measured at amortised cost. The remaining fair value changes are recognised in OCI.
Upon derecognition, the cumulative fair value change recognised in OCI is recycled to profit or loss.
The Group did not hold any debt instruments classified as being financial assets at fair value through OCI.
3. Financial assets designated at fair value through OCI (equity instruments)
Upon initial recognition, the Group can elect to classify irrevocably its equity investments as equity instruments
designated at fair value through OCI when they meet the definition of equity under IAS 32 Financial Instruments:
Presentation and are not held for trading. The classification is determined on an instrument-by-instrument basis.
Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognised as other
income in the statement of profit or loss when the right of payment has been established, except when the Group
benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are
recorded in OCI. Equity instruments designated at fair value through OCI are not subject to impairment
assessment.
The Group elected to classify irrevocably its non-listed equity investments under this category.
4. Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading, financial assets
designated upon initial recognition at fair value through profit or loss, or financial assets mandatorily required to
be measured at fair value. Financial assets are classified as held for trading if they are acquired for the purpose of
selling or repurchasing in the near term.
Derivatives, including separated embedded derivatives, are also classified as held for trading, hedge accounting
was not applied. Financial assets with cash flows that are not solely payments of principal and interest are
classified and measured at fair value through profit or loss, irrespective of the business model. Notwithstanding
the criteria for debt instruments to be classified at amortised cost or at fair value through OCI, as described above,
debt instruments may be designated at fair value through profit or loss on initial recognition if doing so eliminates,
or significantly reduces, an accounting mismatch.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
49
Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value
with net changes in fair value recognised in the statement of profit or loss.
The Group did not hold any debt instruments classified as being financial assets at fair value through profit or
loss.
Derecognition
A financial asset is primarily derecognised when:
•
The rights to receive cash flows from the asset have expired; or
•
The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to
pay the received cash flows in full without material delay to a third party under a ‘pass-through’
arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset,
or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset,
but has transferred control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered into a passthrough
arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of ownership.
When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred
control of the asset, the Group continues to recognise the transferred asset to the extent of its continuing
involvement. In that case, the Group also recognises an associated liability. The transferred asset and the
associated liability are measured on a basis that reflects the rights and obligations that the Group has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of
the original carrying amount of the asset and the maximum amount of consideration that the Group could be
required to repay.
Impairment of financial assets
Further disclosures relating to impairment of financial assets are also provided in the following notes:
•
Disclosures for significant assumptions
•
Debt instruments at fair value through OCI
•
Trade receivables, including contract assets
The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair
value through profit or loss. ECLs are based on the difference between the contractual cash flows due in
accordance with the contract and all the cash flows that the Group expects to receive, discounted at an
approximation of the original effective interest rate. The expected cash flows will include cash flows from the
sale of collateral held or other credit enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in
credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are
possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a
significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected
over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
For trade receivables and should the Group have any contract assets, the Group applies a simplified approach in
calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognises a loss
allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is
based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the
economic environment.
For debt instruments at fair value through OCI, the Group applies the low credit risk simplification. At every
reporting date, the Group evaluates whether the debt instrument is considered to have low credit risk using all
reasonable and supportable information that is available without undue cost or effort. In making that evaluation,
the Group reassesses the internal credit rating of the debt instrument. In addition, the Group considers that there
has been a significant increase in credit risk when contractual payments are more than 30 days past due.
The Group considers a financial asset in default when contractual payments are 120 days past due. However, in
certain cases, the Group may also consider a financial asset to be in default when internal or external information
indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
50
account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable
expectation of recovering the contractual cash flows.
Derivative financial instruments and hedge accounting
When necessary, the Group utilises derivative financial instruments, such as forward currency contracts to hedge
its foreign currency risks. Such derivative financial instruments are initially recognised at fair value on the date
on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried
as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Any
gains or losses arising from changes in fair value on derivatives are recognised on the income statement. At 31
December 2025, the Group had outstanding forward contracts.
Fair value of financial assets and liabilities
The Group measures fair values in accordance with IFRS 13, which defines fair value as the price that would be
received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date. The Group applies a fair value hierarchy that categorises the inputs used in valuation
techniques into three levels, giving highest priority to quoted prices in active markets.
-
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the
Group can access at the measurement date.
-
Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the
asset or liability, either directly or indirectly. These include, for example, quoted prices for similar
instruments, interest rate yield curves, forward exchange rates and other market-corroborated inputs.
-
Level 3 inputs are unobservable inputs for the asset or liability. Where available, fair value is determined
based on quoted market prices. For financial instruments where quoted prices are not available, such as
over-the-counter (OTC) derivative instruments, the Group determines fair value using valuation
techniques.
The Group’s derivative financial instruments primarily comprise foreign exchange forward contracts entered into
with financial institutions. These instruments are classified as Level 2 in the fair value hierarchy. Their fair values
are determined using valuation techniques based on observable market data, including forward exchange rates
and interest rate yield curves.
The use of observable market inputs reduces the need for management judgement and estimation and decreases
the uncertainty associated with fair value measurements. However, the availability of observable inputs may vary
depending on market conditions.
Treasury shares
Own equity instruments, which are reacquired (treasury shares), are recognised at cost and deducted from the
paid-up unrestricted equity reserve. No gain or loss is recognised on the purchase, sale, issue or cancellation of
the Group’s own equity instruments.
Financial liabilities
Liabilities are classified as current and non-current, and include both interest-bearing and interest-free liabilities.
Interest-bearing liabilities are liabilities that either include a contractual interest component, or are discounted to
reflect the fair value of the liability. In the earlier financial years discounted non-current liabilities have included
acquisition-related deferred conditional and unconditional liabilities. Certain conditional liabilities have included
an earn-out component that needed to be met to make the liability unconditional and fix the amount of the future
payment. Acquisition-related conditional purchase considerations that were payable in the Company’s shares were
presented as interest-free liabilities.
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss,
loans and borrowings, or payables.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
51
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables,
net of directly attributable transaction costs.
The company’s financial liabilities include trade and other payables and loans and borrowings including bank
overdrafts.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial
liabilities designated upon initial recognition as at fair value through profit or loss.
Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the
near term.
Gains or losses on liabilities held for trading are recognised in the statement of profit or loss. Financial liabilities
designated upon initial recognition at fair value through profit or loss are designated at the initial date of
recognition, and only if the criteria in IFRS 9 are satisfied. The company has not designated any financial liability
as at fair value through profit or loss.
Loans and borrowings
This is the category most relevant to the company. After initial recognition, interest-bearing loans and borrowings
are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or
loss when the liabilities are derecognised as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that
are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit or loss.
This category generally applies to interest-bearing loans and borrowings. For more information, refer to note 13,
in 1.8 Notes to the Consolidated Statement of Financial Position.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms,
or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the
derecognition of the original liability and the recognition of a new liability. The difference in the respective
carrying amounts is recognised in the statement of profit or loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of
financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an
intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive), as a result of a past
event and it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation. If the effect of the time value of
money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks
specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is
recognised as a finance cost.
The provision for rehabilitation and decommissioning costs has arisen on operating mines and minerals’
processing facilities. These costs are provided at the present value of expected costs to settle the obligation using
estimated cash flows. The cash flows are discounted at a current pre-tax rate that reflects the risks specific to the
rehabilitation and decommissioning liability. The estimated future costs of decommissioning are reviewed
annually and adjusted as appropriate. Changes in the estimated future costs of or in the discount rate applied to
the rehabilitation obligation are added or deducted from the profit or loss or, respectively, decommissioning
obligation adjusted to the carrying value of the asset dismantled.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
52
Non-current assets held for sale and discontinued operations
The standard IFRS 5 requires that an entity must classify a non-current asset or a disposal group as assets held for
sale if the amount equivalent to its carrying amount is accumulated primarily from the sale of the item rather than
from its continued use. In this case, the asset or disposal group must be available for immediate sale in its present
condition under general and standard terms for the sale of such assets, and the sale must be highly probable.
Discontinued operation is a component of the entity with operations and cash flows that can be clearly
distinguished operationally and for financial reporting purposes, from the rest of the entity, that is either held for
sale or already disposed of; and
•
represents a major line of business or geographical area of operations,
•
is part of a single-coordinated plan to dispose of a separate major line of business or geographical area
of operations, or
•
is a subsidiary acquired exclusively with a view to resale and the disposal involves loss of control.
Accounting policies requiring management discretion and key uncertainty factors for estimates
Preparation of the financial statements requires management to make estimates, assumptions and forecasts
regarding the future. Future developments may deviate significantly from the assumptions made if changes occur
in the business environment and/or business operations. In addition, management is required to use its discretion
in the application of the financial statements’ preparation principles.
The scope of the financial statements
The consolidated financial statements include the parent company Afarak Group SE, its subsidiaries, joint
ventures and associated companies. Subsidiaries refer to companies in which the Group has control. The Group
gains control of a company when it holds more than half of the voting rights or otherwise exercises control. The
assessment of whether control is exercised requires management discretion.
Allocation of the cost of a business combination
In accordance with IFRS 3, the acquisition cost of an acquired company is allocated to the assets of the acquired
company. The management has to use estimates when determining the fair value of identifiable assets and
liabilities. Determining a value for intangible assets, such as trademarks and customer relationships, requires
estimation and discretion because in most cases, no market value can be assigned to these assets. Determining fair
value for tangible assets requires particular judgment as well, since there are seldom active markets for them
where the fair value could be obtained. In these cases, the management has to select an appropriate method for
determining the value and must estimate future cash flows.
Impairment testing
Goodwill is tested annually for impairment, and assessments of whether there are indications of any other asset
impairment are made at end of reporting period, and more often if needed. The recoverable amounts of cash-
generating units have been determined by means of calculations based on value in use. Preparation of these
calculations requires the use of estimates to predict future developments.
The forecasts used in the testing are based on the budgets and projections of the operative units, which strive to
identify any expansion investments and rearrangements. To prepare the estimates, efforts have been made to
collect background information from the operative business area management as well as from different sources
describing general market activity. The risk associated with the estimates is taken into account in the discount rate
used. The definition of components of discount rates applied in impairment testing requires discretion, such as
estimating the asset or business related risk premiums and average capital structure for each business segment.
Tangible and intangible assets
Afarak Group management is required to use its discretion when determining the useful lives of various tangible
and intangible assets, which affects the amount of depreciation and thereby the carrying amount of the assets
concerned. The capitalising of mine development assets and exploration and evaluation expenditure, in particular,
requires the use of discretion. Similarly, management is required to use its discretion in determining the useful
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
53
lives of intangible assets identified in accordance with IFRS 3, and in determining the amortisation period. This
affects the financial result for the period through depreciation and change in deferred taxes.
Measurement of mineral resources and ore reserves
In the Group’s mining operations, estimates have to be applied in recognising mineral resources acquired in
business combinations as assets. In the recognition and measurement of mineral resources and ore reserves, the
Group utilises available third party analyses of the quantities, mineral content, estimated production costs and
exploitation potential of the resource. The probability of the ore reserve is also a key consideration. In the mining
and minerals business, the probability is commonly described by classifying a mineral resource into categories
such as ‘proven’, ‘probable’, ‘inferred’ and ‘hypothetical’. The measurement of ore reserves is based on estimated
market prices, estimated production costs and on the probability classification of the mineral resource and
quantities. Therefore, the Group’s management has to use its discretion in applying recognition and measurement
principles for mineral resources.
Rehabilitation provisions
The Group assesses the rehabilitation liabilities associated with its mines and production facilities annually. The
amount of provision reflects the management’s best estimate of the rehabilitation costs. In determining the fair
value of the provision, assumptions and estimates are made in relation to discount rates, the expected cost to
rehabilitate the area and remove or cover the contaminated soil from the site, the expected timing of those costs,
and whether the obligations stem from past activity. These uncertainties may cause the actual costs to differ from
the provision which has been made.
Standards and interpretations effective and adopted in the current year.
The Group applied for the first time certain standards and amendments, which are effective for annual periods
beginning on or after 1 January 2025. The adoption of these amendments did not have a material impact on the
Group’s consolidated financial statements, unless otherwise stated below.
Standards, amendments and interpretations issued but not yet effective
The following new standards and amendments were issued but are not effective for the financial year beginning
1 January 2025 and have not been early adopted by the Group:
-
Amendments to the Classification and Measurement of Financial Instruments (amendments to IFRS 9
and IFRS 7), effective for annual periods beginning on or after 1 January 2026;
-
Annual Improvements to IFRS Accounting Standards—Volume 11, effective for annual periods
beginning on or after 1 January 2026;
-
Contracts Referencing Nature-dependent Electricity (amendments to IFRS 9 and IFRS 7), effective for
annual periods beginning on or after 1 January 2026;
-
IFRS 18, Presentation and Disclosure in Financial Statements, effective for annual periods beginning on
or after 1 January 2027
The Group is currently assessing the impact of these new standards and amendments on its consolidated financial
statements. Based on the assessment performed to date, except for presentation and disclosure changes expected
on adoption of IFRS 18, the Group does not currently expect any of the other above standards and amendments
to have a material impact on the recognition and measurement of amounts reported in future financial statements.
This assessment may change as the Group completes its implementation work.
1.3 GOING CONCERN
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
54
The company is in sound condition and presents a healthy balance sheet.
1.4 BUSINESS COMBINATIONS AND ACQUISITION OF NON-CONTROLLING INTERESTS
1.4.1 Financial Year 2025
Afarak did not carry out any acquisitions during the financial year 2025.
1.4.2 Financial Year 2024
Afarak acquired shares of non-controlling interest of 1.23% in Türk Maadin Sirketi.
1.5 IMPAIRMENT TESTING
General principles of impairment testing
Afarak Group has carried out impairment testing on goodwill and other assets as of 31 December 2025. The
following cash generating units were defined for the impairment testing:
-
Speciality Alloys business (Türk Maadin Sirketi and Elektrowerk Weisweiler) with a vertically
integrated mining-beneficiation-smelting-sales operation in the specialty grade ferrochrome business;
-
South African mining business (Mecklenburg and Vlakpoort);
The Group assesses at the end of each reporting period whether there is any indication that assets may be impaired.
If any such indication exists, the recoverable amount of these assets is estimated. Moreover, the recoverable
amount of any goodwill and unfinished investment projects will be estimated annually, irrespective of whether
there is an indication of impairment. The South African mining business did not have any goodwill at the end of
the financial year 2025.
During 2025, there were no indication of impairment at both the Speciality Alloys business and the South African
mining business.
The Vlakpoort mine was not tested for impairment as there were no indication of impairment.
Changes in goodwill during 2025
During the financial year 2025, the total goodwill of the Group decreased by EUR 4.6 million to a total of EUR
45.2 million. The decrease was attributable to an exchange rate movement of EUR 4.6 million related to Goodwill.
In 2014, the synergy goodwill identified in the Mogale acquisition, related to Afarak Trading acting as a global
sales entity for the whole Group, was initially allocated to Speciality Alloys segment. Afarak Trading contribution
is divided to both segments to reflect the nature of serving the whole Group. It is allocated to both segments based
on their relative revenue, reflecting the volume of Afarak Trading related benefits enjoyed by the CGU. The
changes are described below:
EUR '000
Speciality Alloys
Business
FerroAlloys
Business
Group Total
Goodwill 1.1.2025
49,779
0
49,779
Exchange rate movement
-4,556
0
-4,556
Goodwill 31.12.2025
45,223
0
45,223
The changes in goodwill during 2024 are presented below:
EUR '000
Speciality Alloys
Business
FerroAlloys
Business
Group Total
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
55
Goodwill 1.1.2024
46,996
0
46,996
Exchange rate movement
2,783
0
2,783
Goodwill 31.12.2024
49,779
0
49,779
Goodwill as a ratio of the Group’s equity on 31 December 2025 and 31 December 2024 was as follows:
EUR '000
31.12.2025
31.12.2024
Goodwill
45,223
49,779
Equity
95,826
112,068
Goodwill/Equity, %
47.2%
44.4%
Impairment on long term assets
In 2025, there were no impairment write down on other long- term assets.
Methodology applied in impairment testing
For the cash generating units that were tested, the test was carried out by calculating their value in use. Value in
use has been calculated by discounting estimated future net cash flows based on the conditions and assumptions
prevailing at the time of the testing. Future cash flows for the Speciality Alloys minerals processing have been
projected for a five-year period, after which a growth rate equaling projected long-term inflation has been applied
(Speciality Alloys: 2%). For the terminal year after the five-year estimation period, the essential assumptions (e.g.
revenue, variable costs and fixed costs) have been based at the estimation period’s previous year’s figures. Future
cash flows for the South African mining business have been projected for the life of mine with a 3.2% growth rate
equaling projected long-term inflation has been applied.
The weighted average cost of capital (WACC) has been calculated separately for each cash generating unit and
assets being tested, taking into account each business’s typical capital structures, investors’ average required rate
of return for similar investments and company size and operational location related factors, as well as risk-free
interest rates and margins for debt financing. The Group has used publicly available information on the peer group
companies’ capital structure, risk premium and other factors. The market interest rates reflect the rates applicable
on 31 December 2025.
The information used in the 31 December 2025 impairment testing is based on business units’ management future
forecasts, on general third-party industry expert or analyst reports where available, and to the extent possible on
the current business and asset base excluding any non-committed expansion plans. Forecasted sales volumes and
profitability are based on the management’s view on future development while also taking past performance into
account. Price forecasts are based on forecasted prices for all cash generating units. The cash flow models have
been prepared at constant foreign exchange rates. The management’s approach in preparing cash flow forecasts
has not changed significantly from the previous impairment testing.
The underground production in the models of the South African mining business does not solely come from
reserves, as some come from resources that are not yet converted to reserves. This increases the risk that some of
the grades may differ, and tonnes could possibly not be economically extractable. There is also the risk that costs
could be different than anticipated even though due care was taken in the cost evaluation.
These pre-tax discount rates applied in 2024 impairment testing were the following:
Cash Generating Unit
Pre-tax discount rate
2025
2024
Speciality Alloys
15.7%
17.6%
South African mine - Mecklenburg mine
14.9%
20.0%
The key reasons for the changes in the discount rates compared to 2025 were the changes in risk-free interest
rates in both cash-generating units.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
56
The cash flows in the Mecklenburg mine impairment test review includes both opencast and underground
operation. The Mecklenburg model has a life of mine of 10 years.
The results of impairment testing have been evaluated by comparing the cash generating units’ recoverable
amount to the corresponding carrying amount based on the following judgment rules:
Recoverable amount divided by the carrying amount:
Conclusion:
< 100%
Impairment
101-120%
Slightly above
121-150%
Clearly above
> 150%
Significantly above
Test results 31 December 2024
The impairment test results were as follows:
Cash generating unit
Goodwill
(MEUR),
pre-testing
Goodwill
(MEUR), post-
testing
Carrying
amount
(MEUR),
pre-
testing
Conclusion
Speciality Alloys
45.2
45.2
68.9
Slightly above
South African Mines
-
Mecklenburg
0.0
0.0
16.0
Clearly above
The testable asset base (carrying amount) includes goodwill, intangible and tangible assets and net working
capital less provisions and deferred tax liabilities (in relation to purchase price allocation entries).
Key background and assumptions used in the cash flow forecasts of the impairment testing process are
summarised in the following table:
Cash generating unit
Sales volume
Sales prices
Costs
Speciality Alloys business
FeCr:
28,000 t/a; from 2026 to 2030
Cr Ore:
11,000 t/a
t/a
LC/ULC
ferrochrome
with
average Cr content of 70 %,
based on forecasted prices
Raw material costs generally change
in line with sales price; other costs
growing at inflation rate
South African mining
business: Mecklenburg
mine
ROM:
Underground mining of
177,000t in 2027; and is
planned to increase to an
average of 538,000t/a as
from 2027 to 2036
SA Concentrate & SA
Lumpy prices are based on
forecasted prices
The costs for underground are
based on past experiences of our
mining team in underground
operations adjusted for inflation
rate. The cost over the life of
mine excluding inflation is
estimated to be ZAR 857 per
saleable ton of chrome.
Moreover, the USD/ZAR foreign exchange rate affects significantly the testing of the South African mining
business. The foreign exchange rate used in the test was 16.00 for the year 2025.
Sensitivity analysis of the impairment tests
The Group has analysed the sensitivity of the impairment test results by estimating how the essential assumptions
should change in order for the recoverable amount to be equal to the carrying amount. The results of this sensitivity
analysis as of 31 December 2025 are given below:
Cash generating unit
Change in pre-tax
discount rate
Change in free cash
flow (annual average)
Change in CGU’s
average EBITDA
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
57
(compared to the level
used in testing)
margin
Speciality Alloys
0.3% - points
-1.9%
-0.1% - points
South African mining
business:
-
Mecklenburg mine
-59.3% - points
-74.2%
-42.5% - points
1.6 OPERATING SEGMENTS
Afarak Group has two operating segments, FerroAlloys and Speciality Alloys, which are also the reporting
segments. The operating segments are organised based on their products and production processes. The current
reporting structure was adopted in 2011. The Group’s executive management reviews the operating results of the
segments for the purpose of making decisions on resource allocation and performance assessment. Segment
performance is measured based on revenue as well as earnings before interest, taxes, depreciation and amortisation
(EBITDA) as included in the internal management reports and defined consistently with the consolidated
EBITDA.
The FerroAlloys business consists of the Vlakpoort mine and Mecklenburg mine in South Africa. It also included
the Zeerust mine but was disposed mid-year. The business produces chrome ore for sale to global markets.
The Speciality Alloys business consists of Türk Maadin Şirketi A.S (“TMS”), the mining and beneficiation
operation in Turkey, and Elektrowerk Weisweiler GmbH (“EWW”), the chromite concentrate processing plant in
Germany. TMS supplies EWW with high quality chromite concentrate which produces speciality products
including specialised low carbon and ultra low carbon ferrochrome. Chrome ore from TMS that is not utilised for
the production of specialised low carbon ferrochrome is sold to the market.
The revenue and costs of the Group’s sales and marketing arm Afarak Trading Ltd (“ATL”) is allocated to the
segments in proportion to their sales. Afarak’s other operations, including the Group’s headquarters and other
Group companies that do not have significant operations, are presented as unallocated items.
Intercompany transactions are carried out on an arm’s length basis. The transactions between the segments have
been limited but the parent company has provided funding and administrative services to the Group’s subsidiaries.
The accounting policies applied in the operating segment information are the same as those in the consolidated
financial statements.
Operating segment information 2025
Year ended
31.12.2025
EUR '000
Speciality
Alloys
Ferro
Alloys
Segments
total
Unallocated
items
Eliminations
Consolidated
Group
External revenue
Rendering of
services
0
5,023
5,023
0
0
5,023
Sale of goods
130,892
4,921
135,813
443
0
136,256
Total external
revenue
130,892
9,944
140,836
443
0
141,279
Inter-segment
revenue
2,305
-2,305 ¹
-
Total revenue
130,892
9,944
140,836
2,748
-2,305
141,279
Segment
EBITDA
4,314
-1,323
2,991
-3,203
0
-212
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
58
Depreciation and
amortisation
-1,989
-231
-2,220
-180
0
-2,400
Impairment
Segment
operating profit /
(loss)
2,325
-1,554
771
-3,383
0
-2,612
Finance income
6,599
Finance cost
-11,511
Income taxes
-1,415
Loss for the
period
-8,939
Segment's assets 2
150,481
42,451
192,932
6,113
-50,943
148,102
Segment's
liabilities 2
44,426
44,931
89,357
23,780
-60,860
52,277
Other disclosures
Capital
expenditure 3
4,204
4,207
8,411
3
-4,210
0
Provisions 4
3,041
6,667
9,708
0
0
9,708
1.
Inter-segment items are eliminated on consolidation.
2.
The assets and liabilities of the segments represent items that these segments use in their activities or that can
be reasonably allocated to them.
3.
Investments consist of increases in tangible and intangible assets whose life is longer than one financial year.
4.
Balance sheet values.
Year ended
31.12.2024
EUR '000
Speciality
Alloys
Ferro
Alloys
Segments
total
Unallocated
items
Eliminations
Consolidated
Group
External revenue
Rendering of
services
0
1,919
1,919
0
0
1,919
Sale of goods
111,275
14,658
125,933
789
0
126,722
Total external
revenue
111,275
16,577
127,852
789
0
128,641
Inter-segment
revenue
2,494
-2,494 ¹
-
Total revenue
111,275
16,577
127,852
3,283
-2,494
128,641
Segment
EBITDA
1,715
4,289
6,004
-3,398
0
2,607
Depreciation and
amortisation
-2,163
-417
-2,580
-173
0
-2,753
Impairment
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
59
Segment
operating profit /
(loss)
-448
3,872
3,424
-3,571
0
-146
Finance income
3,049
Finance cost
-8,199
Income taxes
-1,921
Profit for the
period
-7,218
Segment's assets 2
154,750
49,429
204,179
4,630
-47,207
161,602
Segment's
liabilities 2
42,270
42,478
84,748
21,034
-56,249
49,534
Other disclosures
Capital
expenditure 3
4,523
101
4,624
101
-4,726
0
Provisions 4
2,576
9,368
11,944
0
-447
11,497
1.
Inter-segment items are eliminated on consolidation.
2.
The assets and liabilities of the segments represent items that these segments use in their activities or that can
be reasonably allocated to them.
3.
Investments consist of increases in tangible and intangible assets whose life is longer than one financial year.
4.
Balance sheet values.
Geographical information
Revenues from external customers
EUR '000
2025
2024
Other EU countries
63,342
55,447
United States
55,786
47,988
China
7,992
11,238
Africa
1,952
5,341
Other countries
12,206
8,627
Total revenue
141,278
128,641
Revenue figures are based on the location of the customers.
The largest customer of the Group is in the Speciality Alloys business segment and represents approximately
10.37% (6.88%) of the Group’s revenue in 2025.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
60
Non-current assets
EUR '000
2025
2024
Africa
34,605
30,672
Other EU countries
12,649
11,997
Other countries
6,385
9,197
Total
53,639
51,866
In presenting geographical information, assets are based on the location of the assets. Non-current assets consist
of property, plant and equipment, intangible assets and exclude Goodwill.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
61
1.7 NOTES TO THE CONSOLIDATED INCOME STATEMENT
1. Revenue
EUR '000
2025
2024
Sale of goods
136,256
126,722
Rendering of services
5,023
1,919
Total
141,279
128,641
2. Other operating income
EUR '000
2025
2024
Gain/(loss) on disposal of tangible and intangible assets
1,754
55
Rental income
249
280
Other
6,136
5,070
Total
8,141
5,405
3. Employee benefits
EUR '000
2025
2024
Salaries and wages
-23,595
-21,015
Share-based payments
-8
-197
Pensions costs
-909
-878
Other employee related costs
-2,436
-2,254
Total
-26,948
-24,344
Average personnel during the accounting period
2025
2024
Speciality Alloys business
500
471
FerroAlloys business
105
105
Group Management
3
3
Other operations *
15
15
Total
623
594
Personnel at the end of the accounting period
2025
2024
Speciality Alloys business
512
479
FerroAlloys business
97
105
Group Management
3
3
Other operations *
14
15
Total
626
602
* Other operations mainly relate to Magnohrom doo Kraljevo, in Serbia
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
62
4. Depreciation, amortisation and impairment
EUR '000
2025
2024
Depreciation / amortisation by asset category
Intangible assets
Other intangible assets
-104
-105
Total
-104
-105
Property, plant and equipment
Buildings and constructions
-287
-297
Machinery and equipment
-1,543
-1,518
Other tangible assets
-466
-833
Total
-2,296
-2,648
Impairment by asset category
Machinery and equipment
0
0
Total
0
0
5. Other operating expenses
EUR '000
2025
2024
Loss on disposal of non-current assets
-8
-
Rental costs
-282
-356
External services1
-4,121
-3,717
Travel expenses
-850
-757
Other operating expenses
-5,848
-2,060
Total
-11,109
-6,890
1. Audit fees paid to HLB network audit firms totalled EUR 596 (2024: EUR 585) thousand in the financial
year. The fees for non-audit services totalled EUR57 (2024: EUR 98) thousand.
6. Financial income and expense
EUR '000
2025
2024
Finance income
Interest income on loans and trade receivables
391
450
Foreign exchange gains
5.922
2,512
Other finance income
286
87
Total
6,599
3,049
Finance expense
Interest expense on financial liabilities measured at amortised cost
-349
-10
Impairment losses on receivables
-13
10
Foreign exchange losses
-7,876
-2,474
Hyperinflation adjustment
-0
-1,917
Unwinding of discount, provisions
-472
-1,120
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
63
Other finance expenses
-2,801
-2,689
Total
-11,511
-8,200
Net finance expense
-4,912
-5,151
Hyperinflation
Türkiye has been identified as a hyperinflationary economy for financial period 2024 to which in accordance with
IAS 29 has been applied. The amounts recognized in the 2024 income statement and balance sheet have been
restated using the general price index. As a result of the restatement, an amount of €7.8 million was recognised in
equity. The revaluations have been made using the Türkiye consumer price index. For 2025, IAS 29 has not been
applied. This is in line with a communiqué issued by the legal regulator pursuant to an amendment to the Tax
Procedure Law (VUK) enacted in December 2025, which stipulates that inflation adjustment will not be applied
for the 2025, 2026 and 2027 fiscal years.
7. Income taxes
EUR '000
2025
2024
Income tax for the period
-2016
-1,385
Income tax for previous years
0
0
Deferred taxes
602
-536
Total
-1,415
-1,921
EUR '000
2025
2024
Profit before taxes
-7,524
-5,297
Income tax calculated at parent company income tax rate
1,505
1,059
Difference between domestic and foreign tax rates
269
-2,012
Items recognised only for taxation purposes
117
259
Tax losses not recognised as deferred tax assets
-4,127
-5,354
Non-tax deductible expenses
636
2,773
Previously unrecognised tax losses now recognised
2,081
1,354
Total adjustments
-90
-2,980
Income tax recognised
-1,415
-1,921
On 31 December 2025 the Group companies had unused tax losses totalling EUR 34.2 (2024: 26.2) million for
which the Group has not recognised deferred tax assets.
8. Earnings per share
2025
2024
Profit attributable to owners of the parent
company (EUR '000)
-8,933
-7,572
Weighted average number of shares,
basic (1 000)
261,400
260,972
Basic earnings per share (EUR) total
-0.03
-0.03
2025
2024
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
64
Profit attributable to owners of the parent
company (EUR '000)
-8,933
-7,572
Weighted average number of shares,
basic (1 000)
261,400
260,972
Effect of share options on issue
(1 000)
0
500
Weighted average number of shares,
diluted (1 000)
261,400
261,472
Diluted earnings per share (EUR) total
-0.03
-0.03
Basic earnings per share is calculated by dividing profit attributable to the owners of the parent company by
weighted average number of shares during the financial year.
When calculating the diluted earnings per share, all convertible securities with a potential dilutive effect are
assumed to be converted into shares. Share options have a dilutive effect if the exercise price is lower than the
share price. The diluted number of shares is the number of shares that will be issued free of charge when share
options are exercised since with the funds received from exercising options, the Company is not able to issue the
same number of shares at fair value. The fair value of shares is based on average share price of the period.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
65
1.8 NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION
9. Property, plant and equipment
EUR '000
Land and
water
property
Buildings
and
constructions
Machinery
and
equipment
Mines and
mineral
assets
Other
tangible
assets
Total
Balance at 1.1.2025
1,872
5,839
23,634
49,197
4,131
84,673
Additions
0
20
10,239
1,064
5
11,328
Disposals
0
-4
-4,481
-563
-20
-5,068
Reclass between items
0
0
0
0
-665
-665
Effect of movements in exchange rates
9
1,039
-2,640
544
1
-1,047
Adjustment
0
-62
207
-265
0
-120
Balance at 31.12.2025
1,881
6,832
26,960
49,977
3,452
89,102
Accumulated depreciation and
impairment 1.1.2025
0
-3,318
-10,569
-23,726
-134
-37,748
Depreciation
0
-287
-1,543
-435
-31
-2,296
Business combinations
0
0
1
0
0
1
Disposals
0
4
129
0
10
143
Effect of movements in exchange rates
0
-1,623
1,571
-601
-2
-655
Accumulated depreciation and
impairment at 31.12.2025
0
-5,224
-10,411
-24,762
-157
-40,555
Carrying amount at 1.1.2025
1,872
2,521
13,065
25,469
3,998
46,925
Carrying amount at 31.12.2025
1,881
1,607
16,549
25,215
3,295
48,547
Balance at 1.1.2024
1,830
3,560
13,361
46,258
3,531
68,540
Additions
0
154
4,463
835
120
5,572
Disposals
0
0
-85
0
-27
-113
Reclass between items
0
0
0
0
501
501
Effect of movements in exchange rates
39
-38
464
1,317
7
1,789
Adjustment
3
2,163
5,431
786
0
8,384
Balance at 31.12.2024
1,872
5,839
23,634
49,197
4,131
84,673
Accumulated depreciation and
impairment 1.1.2024
0
-3,047
-5,491
-22,378
-127
-31,043
Depreciation
0
-296
-1,518
-807
-27
-2,648
Impairment
0
0
0
0
0
0
Disposals
0
0
13
0
27
40
Effect of movements in exchange rates
0
25
-3,573
-542
-7
-4,097
Accumulated depreciation and
impairment at 31.12.2024
0
-3,318
-10,569
-23,726
-134
-37,748
Carrying amount at 1.1.2024
1,830
513
7,870
23,880
3,404
37,497
Carrying amount at 31.12.2024
1,872
2,521
13,065
25,469
3,998
46,925
Machinery and equipment include the prepayments made for them.
Property, plant and equipment include right of use asset EUR 0.08 (2024: 0.08) and a depreciation of EUR
0.07(2024: 0.07) million.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
66
10. Intangible assets
EUR '000
Goodwill
Intangible
assets
identified in
acquisitions
Other
intangible
assets
Exploration
and
evaluation
assets
Total
Balance at 1.1.2025
49,780
78,977
6,159
1,258
136,174
Additions
0
0
512
0
512
Disposals
0
0
-320
0
-320
Reclass between items
0
0
-373
0
-373
Adjustment
0
0
0
0
0
Effect of movements in exchange rates
-4,557
-8,503
-142
24
-13,178
Balance at 31.12.2025
45,223
70,474
5,836
1,282
122,815
Accumulated amortisation and
impairment at 1.1.2025
0
-78,977
-2,311
-165
-81,453
Amortisation
0
0
-72
-33
-105
Disposals
0
0
434
0
434
Effect of movements in exchange rates
0
8,503
133
-13
8,623
Accumulated amortisation and
impairment at 31.12.2025
0
-70,474
-1,815
-211
-72,501
Carrying amount at 1.1.2025
49,780
0
3,848
1,093
54,721
Carrying amount at 31.12.2025
45,223
0
4,020
1,071
50,314
Balance at 1.1.2024
46,997
74,585
5,408
1,254
128,244
Additions
0
0
261
0
261
Disposals
0
0
-79
-18
-97
Reclass between items
0
0
391
0
391
Adjustment
0
0
74
-18
56
Effect of movements in exchange rates
2,783
4,392
104
40
7,319
Balance at 31.12.2024
49,780
78,977
6,159
1,258
136,174
Accumulated amortisation and
impairment at 1.1.2024
0
-74,585
-1,880
-140
-76,605
Amortisation
0
0
-85
-20
-105
Disposals
0
0
4
0
4
Effect of movements in exchange rates
0
-4,392
-350
-5
-4,747
Accumulated amortisation and
impairment at 31.12.2024
0
-78,977
-2,311
-165
-81,453
Carrying amount at 1.1.2024
46,997
0
3,528
1,114
51,639
Carrying amount at 31.12.2024
49,780
0
3,848
1,093
54,721
Other intangible assets include the prepayments made for them. Exploration and evaluation assets consist of
mine projects in various mining projects in Turkey and South Africa.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
67
11. Investments in associates
Afarak has an investment of 3.99% (2024: 5.99%) in Valtimo Components Oyj.
During the financial year 2025 and 2024, Afarak did not acquire or dispose holdings in associates.
12. Financial assets and liabilities
31.12.2025, EUR '000
Non-current financial assets
At fair
value
through
profit and
loss
At fair
value
through
other
comprehe
nsive
income
At
amortised
cost
Carrying
value Fair value
Non-current interest-bearing receivables
147
147
147
Trade and other receivables *
1,483
1,483
1,483
Current financial assets
Trade and other receivables *
15,960
15,960
15,960
Other financial assets
1,614
1,614
1,614
Cash and cash equivalents
7,325
7,325
7,325
Total financial assets
26,529
26,529
26,529
Non-current financial liabilities
Non-current interest-bearing liabilities
558
558
558
Other non-current liabilities
22
22
22
Current financial liabilities
Current interest-bearing liabilities
2,841
2,841
2,841
Trade and other payables *
0
0
0
Total financial liabilities
3,421
3,421
3,421
* Non-financial assets and liabilities are not included in the figures.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
68
31.12.2024, EUR '000
Non-current financial assets
At fair
value
through
profit and
loss
At fair
value
through
other
comprehe
nsive
income
At
amortised
cost
Carrying
value Fair value
Non-current interest-bearing receivables
83
83
83
Trade and other receivables *
1,596
1,596
1,596
Current financial assets
Trade and other receivables *
19,804
19,804
19,804
Other financial assets
2,054
2,054
2,054
Cash and cash equivalents
3,954
3,954
3,954
Total financial assets
27,491
27,491
27,491
Non-current financial liabilities
Non-current interest-bearing liabilities
333
333
333
Other non-current liabilities
22
22
22
Current financial liabilities
Current interest-bearing liabilities
2,260
2,260
2,260
Trade and other payables *
0
0
0
Total financial liabilities
2,615
2,615
2,615
* Non-financial assets and liabilities are not included in the figures.
Interest-bearing debt
EUR '000
2025
2024
Non-current
Bank loans
1
1
Acquisition of NCI liability
0
0
Finance lease liabilities
558
333
Other interest-bearing liabilities
0
0
Total
559
334
Current
Bank loans
2,841
2,260
Finance lease liabilities
0
0
Other interest-bearing liabilities (*)
0
0
Total
2,841
2,260
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
69
EUR '000
2025
2024
Finance lease liabilities, minimum lease payments
No later than 1 year
0
0
Later than 1 year and not later than 5 years
558
333
558
333
Finance lease liabilities, present value of minimum lease payments
No later than 1 year
0
0
Later than 1 year and not later than 5 years
558
333
558
333
Future finance charges
0
0
Total minimum lease payments
558
333
* Other interest-bearing liabilities include a short-term commercial debt which has been negotiated into a
longer-term arrangement after the reporting period.
Changes in liabilities arising from financing activities
EUR '000
1 January
2025
Cash flows
Foreign
exchange
movement
Other
31
December
2025
Current borrowings
2,260
864
-283
-
2,841
Lease liabilities
333
225
0
-
558
Total liabilities from financing activities
2,594
1,089
-283
-
3,399
EUR '000
1 January
2024
Cash flows
Foreign
exchange
movement
Other
31
December
2024
Current borrowings
2,766
-349
-156
-
2,260
Lease liabilities
320
13
0
-
333
Total liabilities from financing activities
3,086
-336
-156
-
2,594
Financial risks and risk management
The Board of Directors of Afarak Group SE has outlined the key risks of the Group in the Board of Directors’
Report. In the following section, the financial and commodity risks are presented in more detail with the related
sensitivity analyses.
Summary of financial assets and loan arrangements
Financial assets 31 December 2025
In addition to the operating result and the cash flow generated from it, the factors described below have most
significantly affected the year-on-year change in the Group’s financial assets at the 2025 closing date:
On 31 December 2025, the cash and cash equivalents were invested mainly in interest-bearing EUR, ZAR and
USD denominated bank accounts. Other financial assets comprise interest-bearing loans and other receivables.
One of the Group’s Maltese subsidiaries has been granted a trade finance loan facility amounting to USD 4.0
million during 2022 and the Group has given a corporate guarantee amounting to USD 4.0 as collateral. The
Maltese subsidiary utilized USD 2.6 million as at the end of 2025. During 2025, an additional trade finance loan
facility without recourse amounting to USD 2.0 million has been granted. The Maltese subsidiary utilized USD
0.4 million as at the end of 2025.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
70
The German subsidiary has an overdraft facility to EUR 1.0 million. As at 31 December 2025, the utilised balance
amounted to EUR 0.3 million.
Interest-bearing debt 31 December 2025
-Floating rate loans from financial institutions total EUR 2.8 (2024: 2.3) million. Fixed rate loans total EUR 0.0
(2024: 0.0) million.
-The interest rate of the Maltese bank loan facility is at the rate of 3.75% per annum margin above the Bank’s
Lending Base Rate. The interest rate on 31 December 2025, based Bank’s Lending Base Rate at that date, was
4.65%.
-The interest rate of the German bank overdraft facility is 5.85% per annum.
Capital Management
The Group’s capital management objective is to maintain the ability to continue as a going concern and to optimise
the cost of capital in order to enhance value to shareholders. As part of this objective, the Group seeks to maintain
access to loan and capital markets at all times. The Board of Directors reviews the capital structure of the Group
on a regular basis.
Capital structure and debt capacity are taken into account when deciding on new investments. Practical tools to
manage capital include the application of dividend policy, capital redemption, share buybacks and share issues.
Debt capital is managed considering the requirement to secure liquidity. The Group’s internal capital structure is
reviewed on a regular basis with the aim of optimising the structure by applying measures such as internal
dividends and equity adjustments.
The Group’s long term target for capital structure is to keep the equity ratio above 50%. At the end of the reporting
period, the Group’s equity ratio stood at 64.7% (2024: 69.3%).
Financial Risk Management
In its normal operations, the Group is exposed to various financial risks. The main financial risks are liquidity
risk, foreign exchange rate risk, interest rate risk, credit risk and commodity price risk. The objective of the
Group’s risk management is to identify and, to as far as reasonably possible, mitigate the adverse effects of
changes in the financial markets on the Group’s results. The general risk management principles are accepted by
Afarak Group SE’s Board of Directors and monitored by its Audit and Risk Management Committee. The
managements of the Group and its subsidiaries are responsible for the implementation of risk management policies
and procedures. Group management monitors risk positions and risk management procedures on a regular basis
and supervises that the Group’s policies and risk management principles are followed in all day-to-day operations.
Risks and risk management are regularly reported to the Audit and Risk Management Committee.
The Group’s significant financial instruments comprise bank loans, finance leases, other long-term liabilities, cash
and short-term deposits and money market investments. The main purpose of these financial instruments is to
finance the Group’s acquisitions and ongoing operations. The Group also has various other financial assets and
liabilities such as trade receivables and trade payables, which arise directly from its operations.
(i) Liquidity risk
The Group regularly assesses and monitors its investment and working capital needs and financing, so that it has
enough liquidity to serve and finance its operations and pay back loans. The availability and flexibility of financing
are targeted to be guaranteed by using multiple financial institutions in the financing and financial instruments,
and to agree on financial limit arrangements.
If the liquidity risks were to be realised, it would probably result in overdue interest expenses and damage the
relations with suppliers. Consequently, the pricing and other terms for input goods and services and for financing
could be affected.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
71
The maturity distribution of the Group debt at the end of the financial year was as follows:
31.12.2025 EUR '000
Financial liabilities
Carrying
amount
Contractual
cash flows
6 months
or less
6-12
months
1-2 years
2-5 years
More than
5 years
Secured bank loans
2,841
-2,841
-2,841
0
0
0
0
Finance lease liabilities
558
-558
-102
-102
-56
-298
0
Trade and other payables
22
-22
0
0
-22
0
0
Total
3,421
-3,421
-2,943
-102
-78
-298
0
31.12.2024 EUR '000
Financial liabilities
Carrying
amount
Contractual
cash flows
6 months
or less
6-12
months
1-2 years
2-5 years
More than
5 years
Secured bank loans
2,260
-2,260
-2,260
0
0
0
0
Finance lease liabilities
333
-333
-54
-54
-46
-180
0
Trade and other payables
22
-22
0
0
-22
0
0
Total
2,616
-2,616
-2,314
-54
-68
-180
0
(ii) Foreign exchange rate risk
The Group operates internationally, including in Turkey, Malta and South Africa, and is therefore exposed to
foreign exchange rate risks. The risks arise both directly from the outstanding commercial cash flows and currency
positions, and indirectly from changes in competitiveness between various competitors. The foreign exchange
differences arising from inter-company loans designated as net investments in foreign subsidiaries have been
recognised in the translation reserve in the equity.
The Group is exposed to currency-derived risks that affect its financial results, financial position and cash flows.
In particular, fluctuations in US Dollar and South African Rand against the Euro have a significant impact on the
Euro-denominated profitability of the Group as well as on the Group’s assets and liabilities.
A substantial portion of the Group’s revenues is denominated in US Dollars, while a significant share of its cost
base is denominated in Euros and South African Rand. As a result, the Group is exposed to transactional foreign
exchange risk. In particular, a strengthening of the Euro against the US Dollar has a negative effect on reported
revenue and operating margins, while a weakening of the Euro has a positive effect. During the year, the average
USD/EUR exchange rate increased from 1.08 in the prior period to 1.13 in the current period, representing an
appreciation of approximately 4.6% of the US Dollar against the Euro. This movement had an unfavourable
impact on the Group’s profitability on conversion of USD to Euro.
In its risk management, the Group aims to match its cash inflows and outflows as well as receivables and liabilities
in terms of the currency in which these items are denominated.
The following tables present the currency composition of receivables and debt, and changes thereby relative to
the previous year-end.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
72
31.12.2025, EUR '000
EUR
exchange
rate
1
1.175
0.8726 50.4838 19.4439 0.9314
117.047
EUR
USD
GBP
TRY
ZAR
CHF
RSD
Cash and cash equivalents (EUR)
2,150
1,209
15
2,191
362
0
285
Trade and other receivables (EUR)
801
11,892
0
0
3,565
0
1,009
Loans and other financial assets
(EUR)
1,573
0
0
126
-69
0
0
Trade and other current payables
(EUR)
-4,201
-5,327
0
-744
-4,770
0
-10
Loans and other liabilities (EUR)
-558
-2,533
0
-1
-23
0
0
Currency exposure, net (EUR)
-234
5,241
15
1,572
-933
0
1,284
Currency exposure, net in currency
('000)
-234
6,158
13
79,341 -18,151
0
150,231
31.12.2024, EUR '000
EUR
exchange
rate
1
1.0389 0.82918 36.7372 19.6188
0.941
116.79
EUR
USD
GBP
TRY
ZAR
CHF
RSD
Cash and cash equivalents (EUR)
1,485
1,292
10
599
446
0
117
Trade and other receivables (EUR)
1,624
5,570
0
0
12,991
0
1,505
Loans and other financial assets
(EUR)
1,539
0
0
86
54
0
0
Trade and other current payables
(EUR)
-2,706
-3,843
-1,980
-626
-596
0
-6
Loans and other liabilities (EUR)
-333
-2,260
0
-1
-22
0
0
Currency exposure, net (EUR)
1,608
759
-1,970
57
12,873
0
1,616
Currency exposure, net in currency
('000)
1,608
788
-1,633
2,086 252,558
0
188,753
The effect on the 31 December 2025 currency denominated net assets which would be caused by changes in
foreign exchange rates compared with the rates used in the Group consolidation is presented below. Due to the
high market volatility of the exchange rates, the range of change was kept at +/- 20%.
31 December 2025
USD
GBP
TRY
ZAR
CHF
RSD
20%
strengthening
1,310
4
393
-233
0
321
15%
strengthening
925
3
277
-165
0
227
10%
strengthening
582
2
175
-104
0
143
5%
strengthening
276
1
83
-49
0
68
0%
no change
0
0
0
0
0
0
-5%
weakening
-250
-1
-75
44
0
-61
-10%
weakening
-476
-1
-143
85
0
-117
-15%
weakening
-684
-2
-205
122
0
-167
-20%
weakening
-874
-2
-262
156
0
-214
31 December 2024
USD
GBP
TRY
ZAR
CHF
RSD
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
73
20%
strengthening
190
-492
14
3,218
0
404
15%
strengthening
134
-348
10
2,272
0
285
10%
strengthening
84
-219
6
1,430
0
180
5%
strengthening
40
-104
3
678
0
85
0%
no change
0
0
0
0
0
0
-5%
weakening
-36
94
-3
-613
0
-77
-10%
weakening
-69
179
-5
-1,170
0
-147
-15%
weakening
-99
257
-7
-1,679
0
-211
-20%
weakening
-126
328
-9
-2,146
0
-269
Derivatives
The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating
activities (when revenue or expense is denominated in a foreign currency).
Operative foreign currency derivatives that are valued at fair value on the reporting date cause timing differences
between the changes in the derivative’s fair values and hedged operative transactions. Changes in fair values for
derivatives designated to hedge future cash flow but are not accounted for according to the principles of hedge
accounting impact the Group’s operating profit for the financial year. The underlying foreign currency
transactions will realise in future periods.
Forward foreign exchange contracts not designated in hedge accounting relationships
The Group enters into forward foreign exchange contracts to manage its exposure to foreign currency risk arising
from operational activities. These instruments are not designated in hedge accounting relationships.
The following table presents outstanding forward foreign exchange contracts as at 31 December 2025 and 31
December 2024:
Type Maturity Average exchange rate Foreign currency (USD '000) Fair value (EUR ‘000)
Type
Maturity
Average
Exchange
Foreign
Currency
Fair
Value
rate
(USD'000)
(EUR'000)
31 December 2025
Sell USD/ Buy EUR
Less than 3 months
1.1793
5,800
-14.4
Sell USD/ Buy EUR
3 to 6 months
1.1843
3,500
-32.2
Total 2025
1.1812
9,300
-46.6
31 December 2024
Sell USD/ Buy EUR
Less than 3 months
- - -
Sell USD/ Buy EUR
3 to 6 months
- - -
Total 2024
- - -
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
74
All contracts relate to selling USD and buying EUR.
The fair value represents the mark-to-market valuation based on observable market data, including ECB spot rates
at the reporting date.
The total unrealised loss of EUR 46.6 thousand as at 31 December 2025 has not been recognised in the financial
statements as it is considered immaterial.
Derivative Financial Instruments
Assets
Liabilities
Assets
Liabilities
2025
2025
2024
2024
FX
forwards
- 46.6
- -
Total
- 46.6
- -
(iii) Interest rate risk
The Group is exposed to interest rate risk when Group companies take loans, or make other financing agreements
or deposits and investments related to liquidity management. In addition, changes in interest rates can alter the
fair values of the Group’s assets. The Group’s revenue and operative cash flows are mainly independent of the
changes in market interest rates.
To manage interest rate risks, the Group has used both fixed and floating rate debt instruments and derivative
instruments, such as interest rate swaps, when needed. At the end of 2025, the Group’s interest-bearing debt was
mainly based on floating interest rates; and there were no interest rate swaps in place. The Group aims to match
the loan maturities with the businesses’ needs and to have the maturities spread over various periods so that the
Group’s interest rate risks are somewhat diversified. Floating rate financing is mainly tied to the market rates of
different countries (United Kingdom, South Africa), changes to which will then influence the Group’s total
financing cost and cash flows.
The short-term interest-bearing receivables of the Group are mainly loan receivables and receivables on past asset
disposals. The Group’s interest-bearing liabilities have been discussed above. The effects of credit risks for loan
receivables are explained in more detail in section 1.8. (iv) credit risk.
The split of interest-bearing debt and receivables, also classified into fixed rate and floating rate instruments on
31 December 2025 and 31 December 2024 was as follows:
Interest rate profile of interest-bearing financial instruments
(EUR '000)
Fixed rate instruments
31.12.2025
31.12.2024
Financial assets
0
0
Financial liabilities
0
0
Fixed rate instruments, net
0
0
Variable rate instruments
Financial assets
147
83
Financial liabilities
-2,841
-2,260
Variable rate instruments, net
-2,694
-2,177
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
75
Interest-bearing net debt
-2,694
-2,177
The following table presents the approximate effect of changes in market interest rates on the Group’s income
statement should the deposits’ and loans’ interest rates change. The analysis includes floating rate financial assets
and liabilities. The sensitivity analysis is illustrative in nature and applicable for the forthcoming 12 month period
if the period’s asset and liability structure were to be equal to that of 31 December 2025, and if there were no
changes in exchange rates.
31 December 2025
Interest rate
change
Change in
interest income
Change in
interest
expense
Net effect
-2.00%
-2
57
56
-1.50%
-1
43
42
-1.00%
-1
28
28
-0.50%
0
14
14
0.00%
0
0
0
0.50%
0
-14
-14
1.00%
1
-28
-28
1.50%
1
-43
-42
2.00%
2
-57
-56
31 December 2024
Interest rate
change
Change in
interest income
Change in
interest expense
Net effect
-2.00%
-2
45
44
-1.50%
-1
34
33
-1.00%
-1
23
22
-0.50%
0
11
11
0.00%
0
0
0
0.50%
0
-11
-11
1.00%
1
-23
-22
1.50%
1
-34
-33
2.00%
2
-45
-44
(iv) Credit risk
Credit risk can be realised when the counterparties in commercial, financial or other agreements cannot take care
of their obligations and thus cause financial damage to the Group. The Group’s operational policies define the
creditworthiness requirements for customers and for counterparties in financial and derivative transactions, as
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
76
well as the principles followed when investing liquidity. In the case of major sales agreements, the counterparty’s
credit rating is checked.
The Group’s key customers are major international stainless steel companies, and a number of specialist agents
selling to the steel sector, with typically long and successful business histories. Since the customers represent one
sector of industry, major changes in that industry’s profitability could increase the credit risk. In order to mitigate
credit risk, the Group credit insure its trade receivables.
The trade receivables and loan receivables form a major share of the assets, which are exposed to the credit risk.
Afarak did not present the expected credit losses in tabular format due to minimal credit losses in the historical
data and including the future credit loss expectations. Additionally, the group collect prepayments from sales from
its customers.
As presented in the section 1.8. note 14. The Group’s trade receivables total EUR 12.3 million for year ended 31
December 2025 (2024: 7.5). As a prudent measure, the group provisioned a potential bad debt of EUR 0.9
million. There remains a risk that further losses may arise in respect of the remaining balance.
The Group did not record any loss allowance on trade receivables during the comparative period in 2024. The
portion of prepaid revenues or portion under trade financing amounts to EUR 2.5 million on 31 December 2025
(2024: 2.3). The prepaid portion of the trade receivables does not include any potential losses.
The loan receivables amounted to EUR 1.6 million on 31 December 2025 (2024: 2.0). The total potential credit
risk for the loan receivables is higher than for the trade receivables as the potential risk of default is more
concentrated with only few lenders. The group estimates the potential credit risk in relation to the loan receivables
frequently and reports any changes at each reporting period and estimates the possibility for default on a per lender
basis.
In 2025 and in 2024, the Group did not recognise a provision on other receivables.
The credit risk assessment and the method of calculation has remained the same between the financial period
ending 31.12.2025 and the previous financial period.
The trade receivables do not pose a credit risk due to concentration, as the sales are diversified to several
customers.
Further information about the expected credit loss can be found in the basis of preparation in section 1.2
Accounting Principles under “Financial Assets” and “Impairment of financial assets”.
The Board of Directors of Afarak Group SE has determined a cash management policy for the Group’s parent
company, according to which the excess cash reserves are deposited for a short-term only and with sound financial
institutions with which the Group has established business relations. The credit rating of all significant
counterparties is analysed from time to time.
The maximum credit risk is equal to the carrying value of the receivables as of 31 December, and is split as
follows:
Category
EUR 000’s
31.12.2025
31.12.2024
Interest-bearing
Cash and cash equivalents
7,325
3,954
Other interest bearing receivables
59
83
Interest-bearing, total
7,384
4,037
Interest-free
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
77
Trade receivables
12,084
7,502
Other short-term receivables
5,308
14,356
Long-term receivables
1,571
1,596
Interest-free, total
18,963
23,454
Total
26,347
27,491
(v) Commodity risks
The Group is exposed to price risks on various output and input products, materials and commodities, energy costs
and disruptive availability of electricity. Also, securing the availability of raw materials without any serious
disruptions is vital to its businesses.
The price risks on input materials and commodities are managed by pricing policies so that changes in input
materials and commodities can be moved into sales prices. This, however, is not always possible or there may be
delays as a result of contractual or competitive reasons.
The Group’s units that have production operations are exposed to availability, quality and price fluctuations in
raw materials and commodities. To diminish these risks, the Group’s business units seek to enter into long-term
agreements with known counterparties; although this is not always possible due to the tradition and practice of
the business. For the most part, because it is not possible or economically feasible to hedge commodity price risks
in the Group’s business sectors with derivative contracts, the Group did not have any commodity derivative
contracts in place as of 31 December 2024.
Sensitivity Analysis - Speciality Alloys business
The effect of changes in the sales price of special grade ferrochrome, produced by the Group’s Speciality Alloys
business, to the Group’s operating profit and equity is illustrated below, assuming that the EUR/USD rate were
constant. The analysis is based on December 2025 price level. Since the products are priced in USD, the exchange
rate changes could have a major effect on the Group’s profitability in EUR. Full capacity is of 36,000 t/a, and for
simulation purposes is set at 2025 production of 27,626 t/a. It is also assumed that only one ferrochrome quality
is produced. Various raw materials are used in ferrochrome production, including chrome concentrate and
ferrosilicochrome. The purchase prices of the main raw materials typically move in the same direction as the sales
prices, although the correlation is not perfect and the timing may differ. In practice, therefore the net effect on the
Group’s profitability most probably would be lower than shown below. Electricity usage is also substantial, and
hence changes in electricity prices have a significant effect on profitability; electricity prices do not correlate with
changes in commodity prices.
Financial year 2025
Change in Sales price
(USD / lb Cr)
Change in
Operating Profit
Change in
Group's Equity
EUR 000’s
EUR 000’s
2.90
20%
17,561
16,683
2.78
15%
13,171
12,512
2.66
10%
8,781
8,342
2.54
5%
4,390
4,171
2.42
0%
0
0
2.30
-5%
-4,390
-4,171
2.18
-10%
-8,781
-8,342
2.06
-15%
-13,171
-12,512
1.94
-20%
-17,561
-16,683
Financial year 2024
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
78
Change in Sales price
(USD / lb Cr)
Change in
Operating Profit
Change in
Group's Equity
EUR 000’s
EUR 000’s
2.71
20%
15,384
14,615
2.59
15%
11,538
10,961
2.48
10%
7,692
7,307
2.37
5%
3,846
3,654
2.26
0%
0
0
2.14
-5%
-3,846
-3,654
2.03
-10%
-7,692
-7,307
1.92
-15%
-11,538
-10,961
1.80
-20%
-15,384
-14,615
Sensitivity Analysis – Mining business
As a general rule, the Group sells its concentrate production and chrome ore at market prices and normally does
not enter into forward sales, derivatives or other hedging arrangements to establish a price in advance for the sale
of its future production. The Group is exposed to the risk of fluctuations in prevailing market commodity prices
on the mineral products it produces.
Assuming, for simplicity, an average annual mining activity of 204,163 t/a, and December 2025 price level for
Chrome Ore, the following table represents a rough proxy of the sales price sensitivities. It should also be taken
into account that the profitability of the mining operations can be substantially impacted by changes in the USD
and ZAR exchange rates, electricity prices and availability of electricity, as well as changes in market prices.
In practice, therefore the net effect on the Group’s profitability most probably would be lower than shown below.
Due to the high market volatility the range of change was kept at +/- 20%.
Financial Year 2025
Change in Sales price
(USD/t)
Change in
Operating
Profit
Change in
Group's Equity
291.00
20%
9,902
7,129
278.88
15%
7,426
5,347
266.75
10%
4,951
3,565
254.63
5%
2,475
1,782
242.50
0%
0
0
230.38
-5%
-2,475
-1,782
218.25
-10%
-4,951
-3,565
206.13
-15%
-7,426
-5,347
194.00
-20%
-9,902
-7,129
Financial Year 2024
Change in Sales price
(USD/t)
Change in
Operating
Profit
Change in
Group's Equity
231.00
20%
6,392
4,602
221.38
15%
4,794
3,452
211.75
10%
3,196
2,301
202.13
5%
1,598
1,151
192.50
0%
0
0
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
79
182.88
-5%
-1,598
-1,151
173.25
-10%
-3,196
-2,301
163.63
-15%
-4,794
-3,452
154.00
-20%
-6,392
-4,602
13. Inventories
EUR '000
2025
2024
Goods and supplies
8,612
11,050
Unfinished products
870
387
Unfinished construction projects
0
0
Finished products
9,261
17,159
Prepayments
113
233
Total
18,856
28,829
14. Trade and other current receivables
EUR '000
2025
2024
Trade receivables
12,084
7,502
Loan receivables
1,614
2,054
Prepaid expenses and accrued income
2,837
2,949
Income tax receivables
38
210
Other receivables
3,877
12,301
Total
20,450
25,016
Prepaid expenses and accruals mainly relate to rental contracts, personnel expenses, VAT receivables and accrued
interest for loans. The values of receivables at the end of the reporting period closely correspond to the monetary
value of maximum credit risk in the potential case where the counterparties cannot fulfil their commitments.
The ageing of trade receivables at the end of the reporting period
EUR '000
2025
2024
Not past due
6,131
3,527
Past due 0-30 days
2,839
2,940
Past due 31-60 days
525
272
Past due 61-90 days
1,842
341
Past due more than 90 days
747
422
Trade receivables total
12,084
7,502
The expected credit losses have historically been minimal. Thus the expected credit loss is not material and no
separate credit loss reserve has been recorded.
15. Cash and cash equivalents
EUR '000
2025
2024
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
80
Cash and bank balances
7,276
3,864
Cash and cash equivalents in the consolidated cash flow statement:
EUR '000
2025
2024
Cash and bank balances
7,276
3,864
Short-term money market investments
49
90
Total
7,325
3,954
16. Notes to equity
Number of
registered shares
Number of shares
on issue
Share
capital,
EUR ‘000
31.12.2023
267,041,814
260,500,300
23,642
Share issue
10,000,000
Share based payments (CEO)
500,000
31.12.2024
277,041,814
261,000,300
23,642
Reduction in share capital
-22,642
Share based payments (CEO)
400,000
31.12.2025
277,041,814
261,400,300
1,000
There is no nominal value for the Company’s share.
The equity reserves are described below:
Share premium reserve
Related to the old Finnish Companies Act, the Company has a share premium reserve in relation to old share
issues, where the premium in excess of the par value of the shares subscribed has been recognised in the share
premium reserve.
Paid-up unrestricted equity reserve
Paid-up unrestricted equity reserve comprises other equity investments and subscription price of shares to the
extent that it is not recognised in the share capital based on a specific decision.
Translation reserve
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
81
The translation reserve comprises all foreign currency differences arising from the translation of financial
statements of foreign operations.
Treasury shares
On 31 December 2025, the Company had 15,641,514 (16,041,514) own shares in treasury, which was equivalent
to 5.65% (5.79%) of the issued shares. The total number of shares outstanding, excluding the treasury shares held
by the Company on 31 December 2025, was 261,400,300 (261,000,300).
The Company’s subsidiaries do not hold any of Afarak Group SE’s shares.
Share Issue Authorisations given to the Board of Directors
Based on the resolution at the AGM on 31 May 2024, the Board is authorised to issue shares and stock options
and other special rights that entitle to shares in one or more tranches up to a maximum of 250,000,000 new shares
or shares owned by the Company. This equates to approximately 90.24 % of the Company's currently registered
shares. The authorization may be used among other things to raise additional finance and enabling corporate and
business acquisitions or other arrangements and investments of business activity or for employee incentive and
commitment schemes. By virtue of the authorization, the Board of Directors can decide both on share issues
against payment and on share issues without payment. The payment of the subscription price can also be made
with consideration other than money. The authorization contains the right to decide on derogating from
shareholders' pre-emptive right to share subscriptions provided that the conditions set in the Finnish Companies'
136 Act are fulfilled. The authorization replaces all previous authorizations granted in the Annual General Meeting
in 2023 and is valid two (2) years from the decision of the Annual General Meeting.
17. Share-based payments
As part of the remuneration package under the CEO agreement, the CEO received 500,000 Company shares on
22 January 2024 and 400,000 company shares on 31 March 2025. On 14 August 2025, the Group extended
the CEO’s contract to 30 June 2027 and approved the granting of Company shares as an incentive based on
overall performance KPIs.
These shares have a lock-up period of two years from subscription date. The fair value of the granted shares is
determined based on the market price of Afarak Group share at the grant date which was EUR 0.39 per share. The
expense recognized in the income statement during the year was the remaining EUR 8,000 (2024: EUR 197,260)
relating to the shares transferred in 2025.
18. Deferred tax assets and liabilities
Movements in deferred taxes in 2025
EUR '000
01.01.2025
Exchange
rate
differences
Recognised
in income
statement
Business
combination
and
divestments
31.12.2025
Deferred tax assets:
Unrealised expenses
7
509
448
964
Pension liabilities
69
0
16
85
From translation difference
-69
0
0
-69
Group eliminations
472
-569
98
0
Total
478
-60
562
980
Deferred tax liabilities:
Assets at fair value in
acquisitions
7,710
-7,679
-31
0
Translation difference
80
0
0
80
Business disposals
-3,490
-3,490
Other timing differences
493
7,751
-9
8,235
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
82
Total
8,283
72
-40
-3,490
4,825
Movements in deferred taxes in 2024
EUR '000
01.01.2024
Exchange
rate
differences
Recognised
in income
statement
31.12.2024
Deferred tax assets:
Unrealised expenses
557
1
-551
7
Pension liabilities
13
0
56
69
From translation difference
-69
0
0
-69
Group eliminations
543
26
-98
472
Total
1,044
27
-593
478
Deferred tax liabilities:
Assets at fair value in
acquisitions
7,710
64
-64
7,710
Translation difference
80
0
0
80
Other timing differences
262
224
8
493
Total
8,051
288
-57
8,283
19. Provisions
EUR '000
Environmental
and rehabilitation
provisions
Other
provisions
Total
Balance at 1.1.2025
9,469
2,474
11,943
Additions
688
1,294
1,982
Releases and reversals
-3,951
-247
-4,198
Unwinding of discount
490
0
490
Exchange differences
55
-564
-509
Balance at 31.12.2025
6,751
2,957
9,708
Balance at 1.1.2024
10,107
1,389
11,496
Additions
351
1,476
1,827
Releases and reversals
-2,477
-273
-2,750
Unwinding of discount
1,131
0
1,131
Exchange differences
357
-118
239
Balance at 31.12.2024
9,469
2,474
11,943
EUR '000
2025
2024
Long-term provisions
9,574
11,776
Short-term provisions
134
167
Total
9,708
11,943
The long-term provisions in the statement of financial position relate to environmental and rehabilitation
provisions of the Group’s production facilities and mines. The provisions are based on expected liability.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
83
20. Pension liabilities
Defined benefit pension plans
The majority of the Group’s pension plans are defined contribution plans for which a total expense of EUR 0.6
(2024: 0.6) million has been recognised on the 2025 statement of comprehensive income. In addition, the Group’s
German subsidiary has defined benefit plans. The amount of defined benefit obligations of the plan is based on
actuarial calculations made by authorized actuaries. The pension scheme is arranged by recognising a provision
on the statement of financial position. The present value of the obligation less fair value of plan assets totalled
EUR 9.9 (2024: 11.2) million on 31 December 2025. The Group has considered that the value on 31 December
also corresponds with the amount of net obligation at the end of the reporting period. The assets of the pension
plans are kept separate from the Group’s assets.
Retirement benefit obligation
EUR '000
2025
2024
Present value of funded obligation
18,401
20,397
Fair value of plan assets
-8,474
-9,148
Net liability
9,927
11,249
Movements in defined benefit obligation
EUR '000
2025
2024
Defined benefit obligations at 1.1.
20,397
21,147
Benefits paid
-732
-752
Current service costs
212
243
Interest expense
679
655
Assumption changes
-1,256
-600
Actuarial losses / (gains)
-899
-296
Closing balance at 31.12.
18,401
20,397
Movements in the fair value of the plan assets
EUR '000
2025
2024
Fair value of the plan assets at 1.1.
9,148
8,308
Expected return on plan assets
316
266
Benefits paid by the plan
-209
-227
Return on plan assets greater/(less) than discount rate
-1,293
270
Contributions paid into the plan
512
531
Closing balance at 31.12.
8,474
9,148
The benefits of the defined benefit plan are insured with an insurance company. The corresponding assets are
the responsibility of the insurance company and a part of the insurance company’s investment assets. The
distribution in categories is not possible to provide.
Expense recognised in statement of
comprehensive income
EUR '000
2025
2024
Current service cost
-212
-243
Net interest on net defined benefit liability/(asset)
-363
-389
-575
-632
Expense recognised in other comprehensive
income (OCI)
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
84
EUR '000
2025
2024
Actuarial (gains)/losses due to liability experience
-899
-296
Return on plan assets (greater)/less than discount
rate
1,293
-270
Actuarial (gains)/losses – financial assumptions
-1,257
-600
-863
-1,166
Actual return on plan assets totalled EUR 1.3 (2024: -0.26) million in 2025.
Principal actuarial assumptions
2025
2024
Discount rate
4.14%
3.41%
Expected retirement age
65
65
Expected rate of salary increase
3.00%
3.00%
Inflation
2.25%
2.25%
The expected retirement age has been assumed to be in accordance with German legislation (RVAGAnpG 2007).
Similarly, the expected pension increases have been assumed to be in line with the German legislation, and
mortality expectancy in accordance with the German "Richttafeln 2005 G" has been applied in the valuations.
Provision for retirement pay liability in Turkey
In accordance with existing social legislation in Turkey, the Turkish subsidiary of the Group is required to make
lump-sum payments to employees whose employment is terminated due to retirement or for reasons other than
resignation or misconduct. The computation of the liability was based on the retirement pay ceiling announced by
the Turkish government. On 31 December 2025, the employee severance indemnity recognised in accordance
with IAS 19 totalled EUR 2.8 (2024: 2.1) million.
21. Trade payables and other interest-free liabilities
EUR '000
2025
2024
Non-current
Other liabilities
22
22
Total non-current
22
22
Current
Current liabilities to related parties
6
6
Trade payables
14,274
7,075
Accrued expenses and deferred income
6,474
5,167
Current advances received
3
4
Income tax liability
2,868
516
Other liabilities
769
2,673
Total current
24,394
15,441
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
85
1.9 RELATED PARTY DISCLOSURES
1.9.1 Group structure on 31 December 2025
Subsidiaries
Name
Country of
incorporation
Group's
ownership
and share of
votes (%)
Afarak Group SE's
direct ownership and
share of votes (%)
Afarak doo Belgrade
Serbia
100.00
0.00
Afarak Holdings Ltd
Malta
100.00
0.00
Afarak Investments Ltd
Malta
100.00
100.00
Afarak Mining (Pty) Ltd
South Africa
100.00
0.00
Afarak Mining Investments (Pty) Ltd
South Africa
100.00
0.00
Afarak Platinum (Pty) Ltd
South Africa
100.00
0.00
Afarak Processing Technologies (Pty) Ltd
South Africa
100.00
0.00
Afarak Processing Technologies 2 (Pty) Ltd
South Africa
100.00
0.00
Afarak South Africa (Pty) Ltd
South Africa
100.00
0.00
Afarak Trading Ltd
Malta
100.00
0.00
Auburn Avenue Trading 88 (Pty) Ltd
South Africa
74.00
0.00
Chromex Mining Company (Pty) Ltd
South Africa
94.00
0.00
Chromex Mining Ltd
United Kingdom
100.00
0.00
Destiny Spring Investments 11 (Pty) Ltd
South Africa
73.30
0.00
Destiny Spring Investments 12 (Pty) Ltd
South Africa
100.00
0.00
Duoflex (Pty) Ltd
South Africa
74.00
0,00
Elektrowerk Weisweiler GmbH
Germany
100.00
0.00
Ilitha Mining (Pty) Ltd
South Africa
100.00
0.00
Magnohrom doo Kraljevo
Serbia
100.00
0.00
Synergy Africa Ltd
United Kingdom
100.00
0.00
Türk Maadin Sirketi A.S.
Turkey
99.98
0.00
ZCM Holdco One (Pty) Ltd
South Africa
74.00
23.00
Zeerust Chrome Mine Ltd
South Africa
74.00
0.00
On 11 June 2025, Rekylator Oy was dissolved and removed from Finnish Trade Register.
On 9 December 2025, Intermetal Madencilik ve Ticaret A.S. was merged with Türk Maadin Sirketi A.S. and
struck off
1.9.2 Related party transactions
Afarak Group SE defines the related parties as:
• companies, entities or persons having common control or considerable voting power in Afarak Group
• subsidiaries
• joint ventures
• associates
• Afarak Group SE’s and the above mentioned entities’ top management
Related party transactions with persons belonging to the Group’s Board and management
Finnish accounting legislation, KPA 2:8 § 4 paragraph disclosure requirement
2025
2024
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
86
EUR '000
Salaries
Fees
Share-based
remuneration
Salaries
Fees
Share-based
remuneration
CEO
Konsbruck Guy
Board member 05.2.2018 to 3.6.2025, CEO
15.1.2017 onwards
84
460
8
84
420
197
Board members
Abrahamsen
Thorstein
Board member 23.5.2017 onwards,
Chairman11.11.2019 onwards
96
121
Manojlovic
Jelena
Board member 11.7.2008 onwards,
Chairperson 23.5.2017 – 25.6.2019
78
103
Duniague
Julien
Board member 3.6.2025 onwards,
45
0
Total
84
679
8
84
644
197
As some of the Board members have also had executive management roles, both the Board fees and the salaries
in relation to the executive role have been presented above.
The CEO fees for his service during 2025 were EUR 360,000, a salary of EUR 84,000 and a Company bonus of
EUR 100,000. In addition, EUR 8,000 was recognised as an expense in respect of the remaining share-based
remuneration relating to 2024, in accordance with IFRS 2.
As part of the remuneration packages of its CEOs, Afarak pays a share-based compensation based on the overall
performance KPIs. Guy Konsbruck, received 400,000 Company shares on 31 March 2025. On 14 August 2025,
the Group extended the CEO contract to 30 June 2027.
Management remuneration
EUR '000
2025
2024
Fixed salaries and fees
748
673
Total
748
673
The table includes the Executive Management Team remuneration excluding the CEO for the year 2025. The
CEO and Board members compensation has been presented separately.
Other related party transactions
No dividends were received from associated companies during 2025 and 2024.
1.10 COMMITMENTS AND CONTINGENT LIABILITIES
1.10.1 Mortgages and guarantees pledged as security
On 31 December 2025 the Group had loans from financial institutions totalling EUR 2.8 (2024: 2.3) million. The
Group has provided real estate mortgages and other assets as collaterals for total carrying value of EUR 5.8 (2024:
2.3) million. Moreover, the Group companies have given cash deposits totalling EUR 0.2 (2024: 0.3) million as
security for their commitments. The value of other collaterals totalled EUR 5.6 (2024: 5.6) million as at 31
December 2025.
1.10.2 Covenants included in the Group’s financing agreements
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
87
One of the Group’s Maltese subsidiaries, Afarak Trading Ltd, was granted a loan facility of USD 4.0 million from
a Maltese bank. As at year end 2025 the balance was USD 2.6 (EUR 2.2) million. An additional trade finance
loan facility without recourse amounting to USD 2.0 million was utilised during the year. As at year end 2025,
the balance was USD 0.4 (EUR 0.3) million EUR. The financial covenants attached to both loans were not
breached at the end of the reporting period.
1.10.3 Rental agreements
Liabilities associated with rental and operating lease agreements totaled some EUR 0.6 (2024: 0.4) million for the
period. Typically, the rental agreements maturity varies between two to five years, and normally there is a
possibility to continue these agreements beyond the original maturity date. For these contacts, their price indexing,
renewal and other terms differ contract by contract. As guarantees for these rental agreements, the Group
companies have made cash deposits of approximately EUR 0.0 (0.0) million as at 31 December 2025.
1.11 EVENTS AFTER THE REPORTING PERIOD
Stock Exchange Releases
On 24 February 2026, the Board of Directors issued a profit warning regarding the decrease of EBITDA for the
financial year 2025.
Flagging notification after the reporting period
On 20 January 2026- Afarak Group SE has issued a flagging notification pursuant to Chapter 9, Section 5 of the
Finnish Securities Markets Act, stating that the combined ownership of Jorma Nieminen and his companies 4capes
Oy and Osuusasunnot Oy in Afarak’s shares has exceeded the 5 percent threshold.
According to the notification, the direct and indirect shareholding of Jorma Nieminen in Afarak has increased to
13,897,071 shares, corresponding to 5.02 percent of Afarak’s total number of shares and voting rights.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
88
PARENT COMPANY’S FINANCIAL STATEMENTS (FAS)
INCOME STATEMENT (FAS)
1.1.2025
1.1.2024
- 31.12.2025
- 31.12.2024
EUR '000
Note
Revenue
1
2,305
2,495
Personnel expenses
Salaries and wages
-403
-258
Pension expenses
0
0
Social security expenses total
0
0
Personnel expenses total
-403
-258
Depreciation, amortisation and impairment
2
Impairment of investment in subsidiaries
-0
-0
Depreciation, amortisation and impairment total
-0
-0
Other operating expenses
3
-1,976
-2,176
OPERATING PROFIT
-74
61
Financial income and expenses:
4
Gain on disposal of investment
0
9,651
Reversal of Impairment on receivables
0
8,601
Other financial income
From Group companies
153
156
From others
19
21
Interests and other financial expenses
To Group companies
-412
-1,644
To others
-15
-699
Impairment of intra-group receivable
0
0
Financial income and expenses total
-255
16,086
PROFIT BEFORE TAXES
-329
16,147
Income taxes
5
0
0
PROFIT FOR THE PERIOD
-329
16,147
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
89
STATEMENT OF FINANCIAL POSITION (FAS)
EUR '000
Note
31/12/2025
31/12/2024
ASSETS
NON-CURRENT ASSETS
Investments
6
Shares in Group companies
64,488
64,488
Total investments
64,488
64,488
Non-current receivables
7
Receivables from Group companies
5,252
5,252
Total non-current receivables
5,252
5,252
Total non-current assets
69,740
69,740
CURRENT ASSETS
Current receivables
7
Trade receivables
0
15
Receivables from Group companies
3,705
1,626
Other non interest-bearing receivables
19
28
Prepaid expenses and accrued income
43
38
Total current receivables
3,767
1,707
Cash and cash equivalents
1
1
Total current assets
3,768
1,708
TOTAL ASSETS
73,508
71,448
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
90
STATEMENT OF FINANCIAL POSITION (FAS) (CONT.)
EUR '000
Note
31/12/2025
31/12/2024
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
8
Share capital
1,000
23,642
Share premium reserve
0
25,223
Paid-up unrestricted equity reserve
266,916
219,051
Retained earnings
-213,747
-229,894
Profit for the period
-329
16,147
Total shareholders' equity
53,840
54,169
LIABILITIES
9
Non-current liabilities
Liabilities to Group companies
11,428
11,428
Provisions
0
0
Total non-current liabilities
11,428
11,428
Current liabilities
Liabilities to Group companies
1,530
0
Liabilities to others
0
0
Accounts payable
36
127
Accounts payable to Group companies
6,222
5,278
Other liabilities
0
6
Accrued expenses and deferred income
452
440
Total current liabilities
8,240
5,851
Total liabilities
19,668
17,279
TOTAL EQUITY AND LIABILITIES
73,508
71,448
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
91
STATEMENT OF CASH FLOWS (FAS)
1.1.-31.12.2025
1.1.-31.12.2024
EUR '000
Operating activities
(Loss) / profit for the period
-329
16,147
Adjustments for:
Gain on disposal of investment
0
-9,651
Unrealised foreign exchange gains and losses
18
-112
Financial revenue and expense excluding impairment
229
-6,078
Other adjustments
-442
Cash flow before working capital changes
-82
-136
Working capital changes:
Change in current trade receivables
-1,928
3,752
Change in current trade payables
2,385
2,661
Change in Provisions
0
0
Cash flow before financing items and taxes
375
6,277
Interests received from Group companies
41
-11
Interests received and other financing items
2
-791
Interests paid and other financing items
-412
-1,644
Net cash used in operating activities
6
3,831
Investing activities
Proceeds from sale of tangible and intangible assets
0
0
Net cash from investing activities
0
0
Financing activities
Proceeds from sale of investment
0
9,651
Disposal of asset
0
1,386
Non-current loans from Group companies
0
5
Repayments of current loan receivables
0
0
Proceeds from current borrowings
0
-9,007
Repayment of current borrowings
-6
-5,865
Net cash from financing activities
0
3,830
Change in cash and cash equivalents
0
1
Cash at beginning of period
1
0
Cash at end of period
1
1
Change in the statement of financial position
0
1
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
92
2. NOTES TO THE FINANCIAL STATEMENTS OF THE PARENT COMPANY
(FAS)
2.1 Accounting Policies
Scope of financial statements and accounting policies
The parent company has prepared its separate financial statements in accordance with Finnish Accounting
Standards. Consolidated financial statements have been prepared in accordance with International Financial
Reporting Standards. Consolidated financial statements are presented separately as a part of these financial
statements.
Information on holdings in subsidiaries and associated companies and information on their consolidation is
presented in the notes to the financial statements.
All figures are presented in thousand Euros, unless otherwise explicitly stated.
Valuation principles and methods
Investments in associated companies and debt instruments are valued at acquisition cost, less eventual impairment.
Dividends received from Group companies and associates have been recorded as financial income.
The value of property, plant and equipment in the statement of financial position is stated at acquisition cost, less
accumulated depreciation. Other assets have been stated in the statement of financial position at the lower of
acquisition cost or their likely realisable value. Debt items are valued at acquisition cost. Loan receivables from
subsidiaries and Group companies have been valued at acquisition cost.
Depreciation methods
Acquisition costs of property, plant and equipment are depreciated over their useful lives according to plan.
Depreciation plans have been defined based on practice and experience.
Asset
Depreciation method and period
Intangible rights
5 years straight line
IT equipment
2 years straight line
Other machinery and equipment
5 years straight line
Translations of foreign currency items
Items in the statement of financial position denominated in foreign currency are translated into functional
currency using the exchange rates as at the end of the reporting year. Income statement items are translated
applying the exchange rates prevailing at the date of the transaction.
Comparability of the reported financial year and the previous year
The reported financial year and the previous year were both calendar years and are thus comparable.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
93
2.2 Notes to the income statement
1. Revenue
EUR '000
2025
2024
By business line:
Services
2,305
2,495
Total
2,305
2,495
By geography:
Finland
0
0
EU countries
2,305
1,722
Other countries
0
773
Total
2,305
2,495
2. Depreciation, amortisation and impairment
EUR '000
2025
2024
Impairment
Impairment on investment in subsidiaries
0
0
Total
0
0
3. Other operating expenses
EUR '000
2025
2024
Premise expenses
-20
-17
Machinery and equipment expenses
-106
-43
Travelling expenses
-18
-29
Administration expenses
-772
-1,060
Other operating expenses
-1,060
-1,027
Total
-1,976
-2,176
4. Financial income and expense
EUR '000
2025
2024
Gain on disposal of investment
0
9,651
Reversal of impairment on receivable
8,601
Other financial income
From Group companies
153
156
From others
19
21
Other financial expense
To Group companies
-412
-1,644
To others
-15
-699
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
94
Total
-255
16,086
5. Income taxes
EUR '000
2025
2024
Profit before taxes
-329
16,147
Profit for the period
-329
16,147
2.3 Notes to assets
6. Investments
Shares in Group
companies
Shares in
associated
companies
Receivables
from Group
companies
Total
Acquisition cost 1.1.2024
324,194
8,153
17,614
349,961
Addition of investment
42
0
0
42
Sale of Investment
-1,386
0
0
-1,386
Acquisition cost 31.12.2024
322,850
8,153
17,614
348,617
Accumulated depreciation and
impairment 1.1.2024
-258,362
-8,153
-17,614
-284,129
Impairment of investment in
subsidiaries
0
0
0
0
Accumulated depreciation and
impairment 31.12.2024
-258,362
-8,153
-17,614
-284,129
Book value 31.12.2024
64,488
0
0
64,488
Shares in Group
companies
Shares in
associated
companies
Receivables from
Group companies
Total
Acquisition cost 1.1.2025
322,850
8,153
17,614
348,617
Addition of investment
Sale of Investment
Acquisition cost 31.12.2025
322,850
8,153
17,614
348,617
Accumulated depreciation
and impairment 1.1.2025
-258,362
-8,153
-17,614
-284,129
Impairment of investment in
subsidiaries
0
0
0
0
Accumulated depreciation
and impairment 31.12.2025
-258,362
-8,153
-17,614
-284,129
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
95
Book value 31.12.2025
64,488
0
0
64,488
Holdings in Group and other companies
Name
Country of
incorporation
Group's
ownership
and share of
votes (%)
Afarak Group SE's
direct ownership and
share of votes (%)
Afarak doo Belgrade
Serbia
100.00
0.00
Afarak Holdings Ltd
Malta
100.00
0.00
Afarak Investments Ltd
Malta
100.00
100.00
Afarak Mining (Pty) Ltd
South Africa
100.00
0.00
Afarak Mining Investments (Pty) Ltd
South Africa
100.00
0.00
Afarak Platinum (Pty) Ltd
South Africa
100.00
0.00
Afarak Processing Technologies (Pty) Ltd
South Africa
100.00
0.00
Afarak Processing Technologies 2 (Pty) Ltd
South Africa
100.00
0.00
Afarak South Africa (Pty) Ltd
South Africa
100.00
0.00
Afarak Trading Ltd
Malta
100.00
0.00
Auburn Avenue Trading 88 (Pty) Ltd
South Africa
74.00
0.00
Chromex Mining Company (Pty) Ltd
South Africa
94.00
0.00
Chromex Mining Ltd
United Kingdom
100.00
0.00
Destiny Spring Investments 11 (Pty) Ltd
South Africa
73.30
0.00
Destiny Spring Investments 12 (Pty) Ltd
South Africa
100.00
0.00
Duoflex (Pty) Ltd
South Africa
74.00
0,00
Elektrowerk Weisweiler GmbH
Germany
100.00
0.00
Ilitha Mining (Pty) Ltd
South Africa
100.00
0.00
Magnohrom doo Kraljevo
Serbia
100.00
0.00
Synergy Africa Ltd
United Kingdom
100.00
0.00
Türk Maadin Sirketi A.S.
Turkey
99.98
0.00
ZCM Holdco One (Pty) Ltd
South Africa
74.00
23.00
Zeerust Chrome Mine Ltd
South Africa
74.00
0.00
On 11 June 2025, Rekylator Oy was dissolved and removed from Finnish Trade Register.
On 9 December 2025, Intermetal Madencilik ve Ticaret A.S. was merged with Türk Maadin Sirketi A.S. and
struck off
7. Receivables
EUR '000
2025
2024
Non-current
Loan and other receivables
5,252
5,252
Total
5,252
5,252
Current
Trade receivables
3,197
1,250
Interest receivables
508
376
Prepayments and accrued income
0
0
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
96
Total
3,705
1,626
Other interest-bearing receivables
EUR '000
2025
2024
Current
VAT receivable
15
11
Total
15
11
Other interest-free receivables
EUR '000
2025
2024
Current
Trade receivables
0
15
Other receivables
4
17
Total
4
32
Prepaid expenses and accrued income
2025
2024
Other prepaid expenses and accrued income
43
38
Total
43
38
2.4 Notes to equity and liabilities
8. Shareholders’ equity
EUR '000
Share capital
2025
2024
Share capital 1.1.
23,642
23,642
Transfer to paid up unrestricted equity reserve
-22,642
0
Share capital 31.12.
1,000
23,642
Share premium reserve
2025
2024
Share premium reserve 1.1.
25,223
25,223
Transfer to paid up unrestricted equity reserve
-25,223
0
Share premium reserve 31.12.
0
25,223
Paid-up unrestricted equity reserve
2025
2024
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
97
Paid-up unrestricted equity reserve 1.1.
219,051
219,051
Elimination of Share Premium reserve
25,223
0
Reduction in Share Capital
22,642
0
Paid-up unrestricted equity reserve 31.12.
266,916
219,051
Retained earnings
2025
2024
Retained earnings 1.1.
-213,747
-229,894
Profit for the period
-329
16,147
Retained earnings 31.12.
-214,076
-213,747
Total shareholders' equity
53,840
54,169
Distributable funds
2025
2024
Retained earnings 1.1.
-213,747
-229,894
(Loss) / profit for the period
-329
16,147
Retained earnings 31.12.
-214,076
-213,747
Paid-up unrestricted equity reserve
266,916
219,051
Distributable funds 31.12.
52,840
5,304
9. Liabilities
Non-current liabilities
EUR '000
Non-current interest-bearing debt
2025
2024
Loans from Group companies
11,428
11,428
Total
11,428
11,428
Current liabilities
EUR '000
Current interest-bearing debt
2025
2024
Other debt to Group companies
0
0
Total
0
0
Current interest-free debt
2025
2024
Accounts payable
36
127
Payables to Group companies
6,222
5,278
Other debt
0
6
Other debt to Group companies
1,530
0
Accrued expenses and deferred income
452
440
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
98
Total
8,240
5,851
2.5 Pledges and contingent liabilities
The company did not have any pledges and contingent liabilities as at year end
Pension liabilities
The Company's pension liabilities are directly in accordance with the statutory TyEL-system.
2.6 Other notes
Related party loans
The Company had no loan receivables from the members and past members of the Board.
Information on the personnel
Personnel, annual average
2025
2024
(all employees)
Employees
1
1
Management remuneration (EUR ’000)
2025
2024
Chief Executive Officer
544
504
Board members
219
224
The CEO fees for his service during 2025 were EUR 460,000 and a salary EUR 84,000.
As part of the remuneration packages of its CEOs, Afarak pays a share-based compensation based on the overall
performance KPIs. Guy Konsbruck, received 400,000 Company shares on 31 March 2025. On 14 August 2025,
the Group extended the CEO contract to 30 June 2027.
Information on shares and shareholders
Changes in the number of shares and share capital
On 31 December 2025, the registered number of Afarak Group SE shares was 277,041,814 (277,041,814) and the
share capital was EUR 1,000,000 (23,642,049.60). The EGM resolved on 29 January 2025 to reduce the share
capital of the Company from EUR 23,642,049.60 by EUR 22,642,049.60 in order to transfer funds to the fund for
invested unrestricted equity. After the decision, the share capital of the Company was EUR 1,000,000.00, and the
fund for invested unrestricted equity increased correspondingly by EUR 22,642,049.60.
On 31 December 2025, the Company had 15,641,514 (16,041,514) own shares in treasury, which was equivalent
to 5.65% (5.79%) of the issued shares. The total number of shares outstanding, excluding the treasury shares held
by the Company on 31 December 2025, was 261,400,300 (261,000,300).
On 29 January 2025 - an extraordinary general meeting for Afarak Group SE was held whereby it was
resolved to reduce the
a) share capital of the Company from EUR 23,642,049.60 by EUR 22,642,049.60 to transfer funds to
the fund for invested unrestricted equity.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
99
After the measure the share capital of the Company will be EUR 1,000,000.00 and the fund for invested
unrestricted equity will increase correspondingly with EUR 22,642,049.60.
The entry into force of the reduction of the share capital is subject to the completion of the creditor
protection procedure set out in Chapter 14 of the Limited Liability Companies Act.
All practical measures related to the reduction of the share capital shall be decided by the Board of
Directors.
b) share premium reserve as evidenced by the Company’s balance sheet as of 31 December 2023 by
transferring all funds recorded therein, i.e. EUR 25,223,189.79 to the Company’s fund for invested
unrestricted equity.
The reduction of the share premium reserve is done without remuneration and will not have an effect
on the number of shares, holdings of shares nor rights attached to the shares.
The entry into force of the reduction of the share premium reserve is subject to the completion of the
creditor protection procedure set out in Chapter 14 of the Limited Liability Companies Act.
All practical measures related to the reduction of the share premium reserve shall be decided by the
Board of Directors.
On 31 March 2025 - changes in Afarak Group SE treasury shares took place pursuant to the share issue
authorization granted by the Company's Annual General Meeting held on May 31, 2024, the Board of Directors
has resolved on a directed share issue without payment. Based on the share issue 400,000 of the Company's
treasury shares (“Shares”) have now been transferred to CEO Guy Konsbruck. The Shares form a part of the
remuneration package under the CEO agreement.
After the execution of the share issue 15,641,514 treasury shares shall remain in the possession of Afarak,
representing approximately 5.65 per cent of the total shares and votes of the Company.
On 28 May 2025 - registration in the Finnish Trade register of resolution taken during Afarak SE Extraordinary
General meeting on 29 January 2025 to reduce share capital by EUR 22,642,049.60. The reduced amount has
been transferred to the reserve for invested unrestricted equity in accordance with the resolution. Following the
registration, the Company’s share capital amounts to EUR 1,000,000.
The reduction of share capital has no effect on the number of the Company’s shares.
On 28 May 2025 - registration in the Finnish Trade register of resolution taken during Afarak SE Extraordinary
General meeting on 29 January 2025 to reduce Company’s share premium reserve by EUR 25,223,189.79.
Following the reduction, the amount of the share premium reserve recorded in Afarak’s balance sheet is zero. The
reduced amount has been transferred to the reserve for invested unrestricted equity.
The reduction of the share premium reserve has no effect on the number of shares in the Company.
More information on shares, share capital and shareholders has been presented in the notes to the consolidated
financial statements.
Information obligated to a Group company
The Company is the Group’s parent company.
Afarak Group SE, domicile Helsinki (address: Kaisaniemenkatu 4, 00100 Helsinki, Finland)
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
100
Board members' and Chief Executive Officer's ownership
Afarak Group SE’s Board members and Chief Executive Officer owned in total 2,850,000 (2024: 2,450,000)
Afarak Group SE shares on 31 December 2025 when including shares owned either directly, through persons
closely associated with them or through controlled companies. This corresponds to 1.09% (2024: 0.9%) of all
outstanding shares that were registered in the Trade Register on 31 December 2025.
31.12.2025
shares
options
Board and CEO total:
Thorstein Abrahamsen
Chairman & Independent
Non-Executive Director
0
0
Jelena Manojlovic
Independent Non-Executive
Director
150,000
0
Julien Duniague
Independent Non-Executive
Director
0
0
Guy Konsbruck
Chief Executive Officer &
Executive Director
2,700,000
0
Board and CEO total
2,850,000
0
All shares outstanding
261,400,300
Proportion of all shares
1.09%
On 31 December 2025 the total number of registered shares was 277,041,814 and the Board and CEO's ownership
corresponded to 1.03% of the total number of registered shares.
Auditor’s fees
EUR '000
2025
2024
Tietotili Audit Oy
audit
395
343
other services
58
98
Total
453
441
Board’s dividend proposal
The company will follow the new dividend policy and the board intends to decide about the actual dividend
allocation at a later stage.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
101
SIGNATURES TO THE BOARD OF DIRECTORS REPORT AND THE
FINANCIAL STATEMENTS
1) The financial statements, prepared in accordance with the applicable financial reporting regulations, give
a true and fair view of the assets, liabilities, financial position, and profit or loss of both the company and
the group as a whole comprising the entities included in its consolidated financial statements;
2) The management report provides a true and fair overview of, on the one hand, the development and
performance of the company’s business and, on the other hand, those of the group as a whole comprising
the entities included in its consolidated financial statements, as well as a description of the most
significant risks and uncertainties and other aspects of the company’s situation.
Helsinki 27 March 2026
Thorstein Abrahamsen
Julien Duniague
Chairman
Member of the Board
Jelena Manojlovic
Member of the Board
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
102
THE AUDITOR’S NOTE
Our auditor’s report has been issued today.
Vantaa 27 March 2026
Tietotili Audit Oy
Authorised Public Accountants
Urpo Salo
Authorised Public Accountant
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
Tietotili Audit Oy, 0980209-3
Vanha Kaarelantie 33 A
01610 Vantaa
This document is an English translation of the Finnish auditor’s report. Only the Finnish version of the
report is legally binding.
_______________________________________________________________________________________
Auditor’s Report
To the Annual General Meeting of Afarak SE
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Afarak SE (business identity code 0618181-8) for the year
ended 31 December, 2025. The financial statements comprise the consolidated balance sheet, income
statement, statement of comprehensive income, statement of changes in equity, statement of cash flows
and notes, including material accounting policy information, as well as the parent company’s balance sheet,
income statement, statement of cash flows and notes.
In our opinion
— the consolidated financial statements give a true and fair view of the group’s financial position, financial
performance and cash flows in accordance with IFRS Accounting Standards as adopted by the EU,
— the financial statements give a true and fair view of the parent company’s financial performance and
financial position in accordance with the laws and regulations governing the preparation of financial
statements in Finland and comply with statutory requirements
Our opinion is consistent with the additional report submitted to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with good auditing practice in Finland. Our responsibilities under
good auditing practice are further described in the Auditor’s Responsibilities for the Audit of the Financial
Statements section of our report.
We are independent of the parent company and of the group companies in accordance with the ethical
requirements that are applicable in Finland and are relevant to our audit, and we have fulfilled our other
ethical responsibilities in accordance with these requirements.
In our best knowledge and understanding, the non-audit services that we have provided to the parent
company and group companies are in compliance with laws and regulations applicable in Finland regarding
these services, and we have not provided any prohibited non-audit services referred to in Article 5(1) of
regulation (EU) 537/2014. The non-audit services that we have provided have been disclosed in note 1.7/5
to the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
Tietotili Audit Oy, 0980209-3
Vanha Kaarelantie 33 A
01610 Vantaa
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial statements of the current period. These matters were addressed in the context of our
audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
We have fulfilled the responsibilities described in the Auditors’ Responsibilities for the Audit of the
Financial Statements section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risk of material
misstatement of the financial statements. The results of our audit procedures, including the procedures
performed to address the matters below, provide the basis for our audit opinion on the accompanying
financial statements.
We have also addressed the risk of management override of internal controls. This includes consideration
of whether there was evidence of management bias that represented a risk of material misstatement due
to fraud.
Key Audit Matters
Valuation of intangible and tangible assets, environmental obligations, valuation of inventory and
valuation of goodwill (Accounting principles and notes 1.5, 1.8/9, 1.8/10, 1.8/13 and 1.8/19 for the
consolidated financial statements)
The key audit matter
How the matter was addressed during the audit
— The value of tangible and intangible assets at the
date of the financial statements amounted to 53,6
million euro representing 36,2 % of total assets and
55,9 % of equity. When the underlying assumptions are
changed concerning impairment review this may result
in an impairment of tangible and intangible assets
— This matter is a significant risk of material
misstatement referred to in EU Regulation No
537 / 2014, point (c) of Article 10(2)
— At the balance sheet date 31 December 2025 the
provision for rehabilitation and decommissioning costs
related to mines and processing facilities amounted to
6,8 million euro. The provisions are subject to effects of
any changes in local regulations, management’s
expected approach to decommissioning, underlying
assumptions concerning the calculations along with
effects of changes in exchange rates
— Our audit procedures to address the risk of material
misstatement in respect of valuation included among others
assessment of sensitivity and whether any reasonably possible
change in assumptions could cause the carrying amount to
exceed its recoverable amount. We assessed the Group’s
disclosures in notes 1.5 financial statements about the
assumptions to which the outcome of the impairment tests
were more sensitive
— We carried out audit procedures to address the risk of
material misstatement in respect of valuation of
environmental obligation. We carried out audit procedures
among others to assess the assumptions used by management
in their calculations and reviewed the calculations. We
assessed the Group’s disclosures in the financial statements in
respect of environmental and rehabilitation provisions
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
Tietotili Audit Oy, 0980209-3
Vanha Kaarelantie 33 A
01610 Vantaa
Responsibilities of the Board of Directors and the Managing Director for the Financial Statements
The Board of Directors and the Managing Director are responsible for the preparation of consolidated
financial statements that give a true and fair view in accordance with IFRS Accounting Standards as adopted
by the EU, and of financial statements that give a true and fair view in accordance with the laws and
regulations governing the preparation of financial statements in Finland and comply with statutory
requirements. The Board of Directors and the Managing Director are also responsible for such internal
control as they determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors and the Managing Director are responsible for
assessing the parent company’s and the group’s ability to continue as going concern, disclosing, as
applicable, matters relating to going concern and using the going concern basis of accounting. The financial
statements are prepared using the going concern basis of accounting unless there is an intention to
liquidate the parent company or the group or cease operations, or there is no realistic alternative but to do
so.
— This matter is a significant risk of material
misstatement referred to in EU Regulation No
537 / 2014, point (c) of Article 10(2)
— At the balance sheet date 31 December 2025 the
value of inventory amounted to 18,9 million euro
representing 12,8 % of the total assets. The inventory is
exposed to price and exchange rate fluctuation.
Inventory costing was considered a risk
— This matter is a significant risk of material
misstatement referred to in EU Regulation No
537/2014, point (c) of Article 10(2)
— At the balance sheet date 31 December 2025 the
value of goodwill amounted to 45,2 million euro
representing 30,5 % of total assets and 47,2 % of equity.
Valuation of goodwill and related impairment review is
based on numerous Management estimates and
assumptions. Changes in these estimates and
assumptions may result in an impairment of goodwill
— Our audit procedures to address the risk of material
misstatement in respect of valuation of inventory included
among others assessing the Group’s accounting policies over
recognizing inventory in compliance with applicable
accounting standards. We tested the costing and valuation of
inventory. We performed analytic procedures. We assessed
the Group’s disclosures in the financial statements in respect
of inventory
— We carried out audit procedures to address the risk of
material misstatement in respect of valuation of goodwill. We
carried out audit procedures among others to assess the
assumptions and methodologies used by the Group. We
assessed the sensitivity analysis and underlying assumptions.
We assessed the Group’s disclosures in notes 1.5 in the
financial statements about the assumptions to which the
outcome of the impairment tests were more sensitive
— This matter is a significant risk of material
misstatement referred to in EU Regulation No
537/2014, point (c) of Article 10/2)
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
Tietotili Audit Oy, 0980209-3
Vanha Kaarelantie 33 A
01610 Vantaa
Auditor’s Responsibilities for the Audit of Financial Statements
Our objectives are to obtain reasonable assurance on whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with good auditing practice will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of the financial statements.
As part of an audit in accordance with good auditing practice, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
— Identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
— Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the parent company’s or the group’s internal control.
— Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
— Conclude on the appropriateness of the Board of Directors’ and the Managing Director’s use of the going
concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the parent company’s or the
group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor’s report. However, future events or conditions may cause the parent
company or the group to cease to continue as a going concern.
— Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events so that
the financial statements give a true and fair view.
— Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial
information of the entities or business units within the group as a basis for forming an opinion on the group
financial statements. We are responsible for the direction, supervision and review of the audit work
performed for purposes of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
Tietotili Audit Oy, 0980209-3
Vanha Kaarelantie 33 A
01610 Vantaa
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence and communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the financial statements of the current period and are therefore
the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Other reporting requirements
Information on our audit engagement
We were first appointed as auditors by the Annual General Meeting 30.8.2021 for the financial period
ended 31.12.2021.
Other Information
The Board of Directors and the Managing Director are responsible for the other information. The other
information comprises the report of the Board of Directors but does not include the financial statements
and our auditor’s report thereon. We have obtained the report of the Board of Directors prior to the date
of this auditor’s report. Our opinion on the financial statements does not cover the other information.
In connection with our audit of the financial statements, our responsibility is to read the other information
identified above and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially
misstated. With respect to the report of the Board of Directors, our responsibility also includes considering
whether the report of the Board of Directors has been prepared in accordance with the applicable laws and
regulations.
In our opinion, the information in the report of the Board of Directors is consistent with the information in
the financial statements and the report of the Board of Directors has been prepared in accordance with the
applicable laws and regulations.
If, based on the work we have performed on the other information that we obtained prior to the date of this
auditor’s report, we conclude that there is a material misstatement of this other information, we are required
to report that fact. We have nothing to report in this regard.
As an additional statement, we note that the Company has not presented the information required under
Chapter 7 of the Accounting Act and the sustainability reporting standards, based on Directive (EU) 2026/470
of the European Parliament and of the Council.
Vantaa 27.3.2026
Tietotili Audit Oy, Authorised Public Accountants
Urpo Salo, Authorised Public Accountant, KHT
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
Tietotili Audit Oy, 0980209-3
Vanha Kaarelantie 33 A
01610 Vantaa
INDEPENDENT AUDITOR’S REPORT ON THE ESEF CONSOLIDATED FINANCIAL
STATEMENTS OF AFARAK GROUP SE
To the Board of Directors of Afarak Group SE
We have performed a reasonable assurance engagement on the financial statements Esef-report-
2025-fi.zip of Afarak Group SE (y-identifier: 0618181-8) that have been prepared in accordance
with the Commission’s regulatory technical standard for the financial year ended 31.12.2025.
Responsibilities of the Board of Directors and the Managing Director
The Board of Directors and the Managing Director are responsible for the preparation of the
company’s report of Board of Directors and financial statements (the ESEF financial statements) in
such a way that they comply with the requirements of the Commission’s regulatory technical
standard. This responsibility includes:
-
preparing the ESEF financial statements in XHTML format in accordance with Article 3 of
the Commission’s regulatory technical standard
-
tagging the primary financial statements, notes and company’s identification data in the
consolidated financial statements that are included in the ESEF financial statements with
iXBRL tags in accordance with Article 4 of the Commission’s regulatory technical standard
and
-
ensuring the consistency between the ESEF financial statements and the audited financial
statements
The Board of Directors and the Managing Director are also responsible for such internal control as
they determine is necessary to enable the preparation of ESEF financial statements in accordance
the requirements of the Commission’s regulatory technical standard.
Auditor’s Independence and Quality Management
We are independent of the company in accordance with the ethical requirements that are
applicable in Finland and are relevant to the engagement we have performed, and we have fulfilled
our other ethical responsibilities in accordance with these requirements.
The firm applies International Standard on Quality Management (ISQM) 1, which requires the firm
to design, implement and operate a system of quality management including policies or procedures
regarding compliance with ethical requirements, professional standards and applicable legal and
regulatory requirements.
Auditor’s Responsibilities
Our responsibility is to, in accordance with Chapter 7, Section 8 of the Securities Markets Act,
provide assurance on the financial statements that have been prepared in accordance with the
Commission’s technical regulatory standard. We express an opinion on whether the consolidated
financial statements that are included in the ESEF financial statements have been tagged, in all
material respects, in accordance with the requirements of Article 4 of the Commission’s regulatory
technical standard.
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B
Tietotili Audit Oy, 0980209-3
Vanha Kaarelantie 33 A
01610 Vantaa
Our responsibility is to indicate in our opinion to what extent the assurance has been provided. We
conducted a reasonable assurance engagement in accordance with International Standard on
Assurance Engagements (ISAE) 3000.
The engagement includes procedures to obtain evidence on:
-
whether the primary financial statements in the consolidated financial statements that are
included in the ESEF financial statements have been tagged, in all material respects, with
iXBRL tags in accordance with the requirements of Article 4 of the Commission’s regulatory
technical standard and
-
whether the notes and company’s identification data in the consolidated financial
statements that are included in the ESEF financial statements have been tagged, in all
material respects, with iXBRL tags in accordance with the requirements of Article 4 of the
Commission’s regulatory technical standard and
-
whether there is consistency between the ESEF financial statements and the audited
financial statements.
The nature, timing and extent of the selected procedures depend on the auditor’s judgement. This
includes an assessment of the risk of material deviations due to fraud or error from the
requirements of the Commission’s technical regulatory standard.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Opinion
Our opinion pursuant to Chapter 7, Section 8 of the Securities Markets Act is that the primary
financial statements, notes and company’s identification data in the consolidated financial
statements that are included in the ESEF financial statements of Afarak Group SE Esef-report-
2025-fi.zip for the financial year ended 31.12.2025 have been tagged, in all material respects, in
accordance with the requirements of the Commission’s regulatory technical standard.
Our opinion on the audit of the consolidated financial statements of Afarak Group SE for the
financial year ended 31.12.2025 has been expressed in our auditor’s report 27.3.2026. With this
report we do not express an opinion on the audit of the consolidated financial statements nor
express another assurance conclusion.
Vantaa 27.3.2026
Tietotili Audit Oy
Authorized Public Accountants
Urpo Salo
Authorized Public Accountant
Docusign Envelope ID: 1288D2F6-8A68-4923-847A-3B35B2241B8B