• Sales Volume Growth: Increased by 2% year-over-year in Q1 2025.
• US Sales Volume: Grew by nearly 25% year-over-year in Q1 2025.
• Average Selling Price: $4,100 per metric ton, a 20% year-over-year decline.
• Production Volume: 28,000 tons with a capacity utilization rate of 63%.
• Net Loss: $39 million or $0.15 per share for Q1 2025.
• Adjusted EBITDA: Negative $4 million in Q1 2025.
• Cash COGS per Metric Ton: Approximately $3,650 for Q1 2025.
• Cash Used in Operating Activities: $32 million for Q1 2025.
• Adjusted Free Cash Flow: Negative $40 million for Q1 2025.
• Total Liquidity: $421 million at the end of Q1 2025.

• Warning! GuruFocus has detected 3 Warning Signs with EAF.

Release Date: April 25, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• GrafTech International Ltd (NYSE:EAF) reported a 2% year-over-year increase in sales volume for the first quarter, with expectations to achieve low-double-digit percentage growth for the full year 2025.
• The company successfully increased its sales volume in the United States by nearly 25% year-over-year, capitalizing on the higher pricing region.
• GrafTech has implemented significant cost reduction measures, achieving a 23% year-over-year reduction in cash COGS per metric ton in 2024 and is on track for further reductions in 2025.
• The company is strategically shifting its geographical sales mix to regions with higher selling prices, such as the US and Western Europe, to optimize profitability.
• GrafTech's integrated and global production network provides flexibility to mitigate potential impacts from tariffs and trade policy changes, with less than a 1% impact on full-year cash COGS per metric ton expected from tariffs.

Negative Points

• GrafTech International Ltd (NYSE:EAF) reported a net loss of $39 million for the first quarter, with adjusted EBITDA being negative $4 million, reflecting lower average selling prices.
• The average selling price for graphite electrodes declined by 20% year-over-year, largely due to the completion of higher-priced long-term agreements and ongoing pricing challenges.
• The global steel production environment remains challenging, with weak demand and excess capacity leading to unsustainable pricing dynamics for graphite electrodes.
• The company's capacity utilization rate was 63% in the first quarter, indicating underutilization of production capacity.
• GrafTech faces ongoing uncertainty related to global trade policies and tariffs, which could impact its operations and market dynamics.

Q & A Highlights

Q: With Indian material now facing at least 10% tariffs, has that changed the pace of declines in the US market pricing? A: Historically, there hasn't been trade protection for the US market from Indian imports. However, with the new tariffs, the availability of Indian material in the US market will likely decrease due to increased costs and freight disadvantages. This presents an opportunity for GrafTech to capitalize on its proximity and service to US customers. - Timothy Flanagan, CEO

Q: How much of your sales are now coming from the US and Western Europe? A: Combined, sales from the US and Western Europe now account for well over 50% of our volume and revenue. - Timothy Flanagan, CEO

Q: Can you provide an update on the progress of your share recovery and expectations for the next year? A: We expect low-double-digit growth in volume year-over-year. We've grown sales volume in North America and Europe, our two most strategic markets. We anticipate being more heavily weighted towards the Americas, with over 50% of sales, while Europe and the Middle East will hold steady. - Timothy Flanagan, CEO

Q: What is your outlook on steel utilization rates over the next 6 to 12 months? A: While there's uncertainty in global industrial production, we feel confident in our customer demand and have reiterated our sales volume guidance. We see potential opportunities from increased demand or market displacement. - Timothy Flanagan, CEO

Q: How do you view the pricing outlook for graphite electrodes and needle coke? A: Needle coke pricing has been stable for 12-18 months, and any demand increase or market disruption could improve pricing. Graphite electrode pricing declined in 2024 but has stabilized from Q4 to Q1. We are optimistic about driving pricing in the second half of the year. - Timothy Flanagan, CEO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.