Afarak - New gear in sight?

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Afarak’s H1/2022 is out. Big changes in revenue and profit.
What are your thoughts? Apparently, the company’s best result ever.

Revenue grew 146.5 percent to EUR 92.1 (H1/2021: 37.3) million.
The Group’s EBITDA was EUR 24.5 (H1/2021: -0.9) million, and the EBITDA margin was 26.7% (H1/2021: -2.4%).
Operating profit was EUR 24.0 (H1/2021: 0.9) million, and the operating profit margin was 26.1 percent (H1/2021: 2.4%).
H1/22 profit from continuing operations was EUR 21.2 (H1/2021: -0.9) million;
Cash flow from operations was EUR 10.1 (H1/2021: -1.9) million;
Interest-bearing net debt less liquid assets was EUR 21.5 (50.3) (31.12.2021: 32.2) million;
Cash and cash equivalents on June 30 were EUR 5.0 (June 30, 2021: 2.9) (Dec 31, 2021: 6.3) million.

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That performance-based valuation is as ridiculous as the company’s and main owner’s reputation :grinning_face:

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Indeed, when you make a comparison, you can only wonder… if you look only and solely at the profit figures, it seems to currently climb clearly into the top 10 of the Finnish stock exchange…

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There’s a bit about the guy there. I think I’ll stay away from Afarak. He can keep his stock.

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:negative_squared_cross_mark: :negative_squared_cross_mark: :negative_squared_cross_mark:

Before making a purchase decision on Monday, it would be good to familiarize oneself with the company’s history so there are no surprises.

(edit: props to the creator, it was about time Afarak got its own thread)

https://www.miningweekly.com/article/finnish-authority-orders-afarak-shareholder-to-pay-110m-fine-2019-06-18/rep_id:3650

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There’s risk involved, but does risk and reward go hand-in-hand…with these numbers, there would already be room to pay dividends…

It seems Danko is already quite old; what happens when he throws in the towel?

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Here’s Gosto’s report from 2017:

@Petri_Gostowski, have you followed what’s been happening with the company since then? :grin:

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So, the estimated EPS (earnings per share) for this year is €0.20, and the stock is trading at €0.44? Is the pressure for a €2.5/redemption still on?

How indebted is that company?

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H1/22 gearing (%): 28,9. (H1/2021: 161,3).

https://dataotp.tf.investis.com/news/omx/175/74770/Afarak%20Group%20Interim%20release%20H1%202022%20EN.com/Resource/Download/b3e4b95e-05b4-42c8-83ac-6b31ba3e9532

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Initially quite a bit, but less so lately :grinning_face:

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Kyösti Kakkonen’s comment that the true value is many times higher.

2022 Profit 40-50 million and market cap around 100 million.

What do you think of Afarak right now and what is your relationship with the company?

“Afarak’s business idea is absolutely excellent at this time. The profit will be 40-50 million this year, and the market value is under 100 million. There’s really no sense in this,” Kakkonen says.

“But the markets are unfortunately pricing in the Danko Koncar risk here. Afarak is an opportunity in the sense that if some kind of ownership arrangements were to emerge there, the company’s share price would naturally multiply.”

These two things Kyösti Kakkonen evaluates in a turnaround company before an investment decision – Kakkonen on a steep share price drop: “It’s starting to be cheap buying opportunities” | Kauppalehti

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With earnings estimates for the second quarter, this year’s P/E (price-to-earnings) would need to be 20-25 for a 10x return, and there would certainly be no Končar risk here :smiley:

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@Divinesia posted a good summary a couple of messages back. You can then read the Wikipedia article below.

In short, when you’re considering investing in Afarak, ask yourself: Would you entrust your money to this guy for safekeeping?

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It surged again today. Who can tell me what the risks are, other than the main owner? There has been profit and revenue, though.

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Last time back in the “sword and shield” era it was quite normal; isn’t the headquarters (= a nameplate, a desk and chair, and a typewriter) still in Helsinki?
I guess Danko is still alive?

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The share price has been drifting ahead of the earnings release, but this is an important message regarding the African operations.

Stock exchange release

Afarak published a stock exchange release on 8 May 2020, according to which Afarak South Africa (PTY) Ltd had filed an application to initiate a Business Rescue process in accordance with Chapter 6 of the South African Companies Act.

Following a successful Business Rescue process, the practitioner has concluded that grounds no longer exist for the company to be considered in financial distress, and as a result, the process has been concluded. Afarak South Africa (PTY) Ltd continues its business operations as normal.

Helsinki, 23 February 2023

Afarak Group SE

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https://www.inderes.fi/fi/tiedotteet/afarak-group-sen-tilinpaatostiedote-2022

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All-time best result and the elite of the Finnish stock market among all companies. Net debt-free, top margins, and market prices at a strong level. Likely the number one grower and earnings improver of the year.

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Today was a down day, why was that when the results were quite good? I’m trying to understand these investor intricacies.

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This is one of the most mysterious stocks in Helsinki. Stock exchange releases are few and far between. The main owner apparently has a criminal background: Tax evasion or something similar. Even though the result for the financial year was good, there is uncertainty regarding dividend payments. It’s not worth putting any borrowed money into this.

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