GrafTech International (EAF) Q4 2024 earnings summary

Executive summary

• Achieved 13% year-over-year sales volume growth in 2024, with four consecutive quarters of sequential increases, despite flat global steel production and challenging competitive dynamics; launched 800-mm electrode product.

• Reduced cash costs per metric ton by 23% for the full year and 25% in Q4, exceeding cost reduction targets; working capital reduced by $40 million.

• Improved liquidity to $464 million at year-end 2024 and extended nearly all debt maturities to December 2029.

• Announced a 15% price increase for uncommitted 2025 volume and further profitability initiatives, with 60% of 2025 volume already committed.

• Executed cost rationalization, including idling St. Mary's facility and reducing overhead.

Financial highlights

• Q4 2024 net loss was $49 million ($0.19/share), improved from a $217 million loss in Q4 2023; adjusted EBITDA was negative $7 million, up from negative $22 million in Q4 2023.

• Q4 2024 net sales were $134 million, down 2% year-over-year as higher volume was offset by lower prices and a shift from LTA to non-LTA sales.

• Q4 2024 production volume was 25,100 metric tons (55% utilization), sales volume was 27,200 metric tons, up 13% year-over-year.

• Full-year 2024 adjusted free cash flow was negative $56 million, compared to a positive $50 million in 2023.

• Net cash used in operating activities was $26 million in Q4 and $40 million for the year; Q4 adjusted free cash flow was negative $21 million.

Outlook and guidance

• Expects a low double-digit percentage increase in sales volume for 2025, with over 60% of expected volume already committed at fixed price and volume.

• Anticipates a mid-single-digit percentage decline in cash COGS per metric ton in 2025, targeting ~$4,100 per metric ton.

• Plans a 15% price increase on uncommitted 2025 volume and to optimize geographic sales mix.

• Forecasts 2025 capital expenditures of approximately $40 million; working capital expected to remain a cash flow benefit, though less than prior years.

• Interest expense for 2025 projected at ~$90 million.