EAF

GrafTech International Reports Q1 Loss

GrafTech International Ltd. (NYSE: EAF) has reported its unaudited financial results for the first quarter ended March 31, 2024. The company's net sales for the quarter were $136,584 thousand, representing a 2% decrease compared to the first quarter of 2023. The net loss for the first quarter of 2024 was $30,869 thousand, or $0.12 per share, compared to a net loss of $7,369 thousand, or $0.03 per share, in the first quarter of 2023.

Adjusted EBITDA for the first quarter of 2024 was $194 thousand, a significant decrease from $15,115 thousand in the first quarter of 2023. This decline primarily reflected lower weighted-average realized prices and a shift in the mix of business from long-term agreement (LTA) volume to non-LTA volume. However, the company did note an 18% reduction in cash costs per metric ton for the first quarter of 2024 compared to the same period in 2023.

Sales volume for the first quarter of 2024 was 24.1 thousand metric tons, marking a substantial 43% increase from the first quarter of 2023. This consisted of 20.0 thousand metric tons of non-LTA volume and 4.1 thousand metric tons of LTA volume. The weighted-average realized price for non-LTA volume was approximately $4,400 per metric ton, a 27% decrease from the first quarter of 2023. For LTA volume, the weighted-average realized price was approximately $8,700 per metric ton for the first quarter of 2024.

In terms of capital structure and liquidity, as of March 31, 2024, GrafTech had liquidity of $275 million, consisting of cash and cash equivalents of $165 million and $110 million of availability under its revolving credit facility. The company had gross debt of $950 million and net debt of approximately $785 million.

Looking ahead, the company expects demand for graphite electrodes to remain weak in the near term due to challenges in the commercial environment, with steel industry production constrained by global economic uncertainty. GrafTech anticipates sales volume in the second quarter of 2024 to be broadly in line with the first quarter and expects a modest year-over-year improvement in sales volume for the full year.

The company also revised its full-year 2024 cash cost of goods sold per metric ton, now anticipating a mid-teen percentage point decline compared to 2023, reflecting progress in addressing its cost structure. Additionally, GrafTech expects its full-year 2024 capital expenditures to be in the range of $35 million to $40 million.

GrafTech remains confident in the long-term demand growth for graphite electrodes, driven by the steel industry's efforts to decarbonize and the growing electric vehicle market. The company's strategic actions and industry-leading position are aimed at positioning GrafTech to benefit from this long-term growth.

Following these announcements, the company's shares moved -3.1%, and are now trading at a price of $1.56. For more information, read the company's full 8-K submission here.

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