Steel Markets

GrafTech Q3 loss widens as electrode demand remains soft

November 12, 2024

Third quarter ended Sept. 30	2024	2023	% Change
Net sales	$130.7	$159.0	-17.8%
Net earnings (loss)	$(36.1)	$(22.6)	-59.7%
Per diluted share	$(0.14)	$(0.09)	-55.6%
Nine months ended Sept. 30
Net sales	$404.6	$483.4	-16.3%
Net earnings (loss)	$(81.7)	$(37.8)	-116.1%
Per diluted share	$(0.32)	$(0.15)	-113.3%

(in millions of dollars except per share)

GrafTech International’s third-quarter net loss increased from last year, with the company anticipating continuing weakness in near-term demand for graphite electrodes.

The Brooklyn Heights, Ohio-based electrode producer’s net loss widened to $36.1 million in Q3’24 vs. a loss of $22.6 million a year earlier. Sales dropped nearly 18% to $130.7 million in the same comparison, while sales tonnages grew 9% to 26,400 metric tons (mt).

“We grew volume, cut costs, and generated positive cash flow in the third quarter and we are capitalizing on an opportunity to improve our liquidity position,” President and CEO Timothy Flanagan said in a statement on Tuesday.

Outlook

The company sees near-term demand for graphite electrodes remaining soft.

This reflects “persistent challenges in the commercial environment as steel industry production remains constrained by global economic uncertainty.”

GrafTech also reported that “challenging pricing dynamics” have continued in most regions.

“As a result, we remain selective in the commercial opportunities we choose to pursue,” the company said.

However, despite these headwinds, GrafTech expects a low double-digit percentage point year-over-year jump in sales volumes for full year 2024. It predicts the same for 2025.

Meanwhile, Q4’24 sales volumes are anticipated to be “broadly in line” with the previous quarter.

“This performance reflects our compelling customer value proposition and our ongoing focus on delivering on the needs of our customers,” the company said.

Transactions for new capital

The company also announced transactions for new capital, which are expected to close by the end of this year.

One of the key terms is $175 million of new senior first-lien term loans, funded at transaction closing.

GrafTech said all the transactions “will provide incremental liquidity and extend our current debt maturities as we manage the near-term industry-wide challenges.”

Ethan Bernard

Ethan Bernard is managing editor for Steel Market Update. He previously worked for American Metal Market as a copy editor in the New York office for two years, starting in 2008. Later, he copy edited AMM’s monthly magazine on a freelance basis from 2015 until 2017. With experience in financial copywriting and textbook publishing, he holds a BA in Comparative Literature from UC Berkeley, and an MFA. in Creative Writing from New York University. He can be reached at ethan@steelmarketupdate.com or 724-759-7871.