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• Sales Volume Growth: Increased 9% year over year in Q3 2024; up 13% year-to-date from the prior year.

• Cash COGS Reduction: Achieved a 28% year over year decrease in cash COGS per metric ton in Q3 2024.

• Free Cash Flow: Generated $20 million in free cash flow during Q3 2024.

• Net Loss: Reported a net loss of $36 million or 14 per share for Q3 2024.

• Adjusted EBITDA: Negative $6 million for Q3 2024, compared to $1 million in Q3 2023.

• Sales Volume: 26,000 metric tons in Q3 2024, with 23,000 metric tons non-LTA sales at $4,100 per metric ton and 3,000 metric tons LTA sales at $7,700 per metric ton.

• Net Sales Decline: Decreased 18% compared to Q3 2023.

• Liquidity: Total liquidity of approximately $254 million at the end of Q3 2024.

• New Financing: Entered into a $275 million delayed draw term loan, with $175 million to be drawn at closing.

• Debt Maturity Extension: Existing $950 million senior notes extended by one year to December 2029.

• Revolving Credit Facility: New $225 million facility maturing in November 2028, replacing the previous $330 million facility.

• Warning! GuruFocus has detected 6 Warning Signs with EAF.

Release Date: November 12, 2024

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 significant increase in sales volume, up 9% year over year and 13% on a year-to-date basis, despite a challenging demand environment.

• The company successfully generated $20 million in free cash flow during the third quarter, demonstrating strong cash flow performance.

• GrafTech International Ltd (NYSE:EAF) achieved a 28% year-over-year decrease in cash COGS per metric ton, exceeding expectations and leading to an updated full-year guidance for cost improvements.

• The company announced a new financing transaction to improve liquidity and extend debt maturities, providing strategic flexibility for future growth opportunities.

• GrafTech International Ltd (NYSE:EAF) is making progress in regaining lost market share and has entered into new strategic multiyear electrode sales agreements, reflecting customer confidence in their products and services.

Negative Points

• The company reported a net loss of $36 million for the third quarter, with adjusted EBITDA at negative $6 million, reflecting lower pricing and a shift towards non-LTA volumes.

• The global steel industry remains constrained by economic uncertainty and geopolitical conflict, leading to a weak demand environment for graphite electrodes.

• GrafTech International Ltd (NYSE:EAF) experienced a 24% year-over-year decline in weighted average price for non-LTA sales, contributing to an 18% decrease in net sales compared to the third quarter of 2023.

• The company's production volume was down to 19,000 metric tons, resulting in a capacity utilization rate of 46%, impacted by planned maintenance shutdowns at European facilities.

• The graphite electrode industry continues to face low capacity utilization and weak pricing dynamics, with ongoing competitive pressures from increased electrode exports from countries like India and China.