Positive volume development, but raw material prices hurt profitability
Afarak reported their Q3 results on Friday. On topline level Afarak’s development normalized from weak Q3’16 and was slightly above our expectations. However, profitability was burdened by significant adverse development in raw material costs. Higher cost load was more than enough to offset the positive volume development and thus profitability dropped to the negative side. Due to the dispute between Afarak’s shareholders we abstain from giving a target price or a recommendation. However, the share looks overvalued by all metrics on operational perspective.
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Afarak Group
Afarak Group operates in the manufacturing industry. The company specializes in the manufacture and development of specialized alloys and chrome solutions for industrial components. The products are resold worldwide through their own sales and marketing channels, where customers are found in the automotive, aerospace, and nuclear industries. The company is headquartered in Helsinki.
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