GrafTech International (EAF) Q1 2025 earnings summary

Executive summary

• Q1 2025 sales volume grew 2% year-over-year, with U.S. sales volume up 25%, reflecting a strategic shift to higher-priced regions despite an 18% decline in net sales due to lower realized prices.

• Net loss was $39 million ($0.15 per share), widening from $31 million ($0.12 per share) in Q1 2024, driven by lower prices and higher interest expense.

• Adjusted EBITDA was negative $4 million, down from $0.2 million in Q1 2024, mainly due to lower prices despite a 21% reduction in cash costs per MT.

• Strategic initiatives focused on cost reduction, market share gains, and shifting geographic mix to higher-priced U.S. and Western Europe markets.

• Total liquidity at quarter-end was $421 million, supporting operations amid industry challenges.

Financial highlights

• Q1 2025 net sales were $112 million, down 18% year-over-year, with a gross loss of $1.7 million and operating loss of $18.2 million.

• Adjusted loss per share was $0.13, consistent with recent quarters.

• Cash cost per metric ton was $3,652 in Q1 2025, down 21% year-over-year and 11% sequentially.

• Net cash used in operating activities was $32 million; adjusted free cash flow was negative $40 million.

• Interest expense rose 91% to $29.8 million, including $5.4 million in debt modification costs.

Outlook and guidance

• Management expects a low double-digit percentage increase in full-year 2025 sales volume, targeting ~25% cumulative growth since 2023, with about 75% of volume already committed.

• Cash cost of goods sold per metric ton is projected to decline by a mid-single digit percentage for 2025, targeting ~$4,100.

• Full-year 2025 capital expenditures are expected to be approximately $40 million.

• Working capital management is expected to be favorable to full-year cash flow.

• Announced a 15% price increase on uncommitted 2025 volumes to restore profitability.