Earning Date, Transcript Summary & Report

Earnings Surprise Report: GrafTech International Ltd. beats earnings expectations with reported EPS of $-0.13, exceeding expectations of $-0.15.

Sales Volume Growth: Sales volume grew by 2% year-over-year in Q1 2025, with expectations to increase by a low-double-digit percentage for the full year, resulting in cumulative growth of approximately 25% since 2023.

Sales Volume Surge: Increased sales volume in the United States by nearly 25% year-over-year in Q1 2025, significantly boosting market share in this key region.

Cost Structure Improvement: Achieved a 23% year-over-year reduction in cash COGS per metric ton in 2024, with a projected mid-single-digit percentage decline for 2025, indicating improved cost structure.

Strong Liquidity Position: Maintained a strong liquidity position with total liquidity of $421 million, including $214 million in cash, supporting the ability to manage through near-term challenges.

Enhanced Safety Performance: Improved safety performance with a continued reduction in total recordable incident rate, reflecting commitment to employee safety.

Geographical Business Strategy: Strategic initiatives to shift geographical mix of business to regions with higher selling prices, enhancing overall financial performance.

EU Market Recovery Potential: Positive outlook for the EU market with potential recovery driven by infrastructure investments and policy support, positioning GrafTech for future growth.

Pricing Challenges in Graphite Electrode: Weak demand and excess capacity have led to challenging pricing dynamics, with current graphite electrode pricing deemed unsustainable.

Average Selling Price Decline: The average selling price for the first quarter was $4,100 per metric ton, representing a 20% year-over-year decline, largely due to the completion of higher-priced long-term agreements (LTAs).

Quarterly Financial Decline: Net loss of $39 million or $0.15 per share for the first quarter, with adjusted EBITDA at negative $4 million, indicating a decline from the previous year.

Cash Flow Decline: Cash used in operating activities was $32 million, and adjusted free cash flow was negative $40 million, reflecting a significant increase in cash outflow compared to the previous year.

Production Capacity Underutilization: Production volume was 28,000 tons with a capacity utilization rate of 63%, indicating underutilization of production capacity despite a planned inventory build.

Global Steel Production Decline: Global steel production outside of China was approximately 209 million tons in the first quarter, which was modestly below the first quarter of last year, reflecting a decline in demand.

EU Steel Production Decline: Steel production in the EU decreased 3% year-to-date, remaining well below historical levels, indicating ongoing challenges in the market.