GrafTech International(EAF)2025-02-07 19:31Financial Data and Key Metrics Changes - In Q4 2024, the company reported a net loss of 0.19 per share, with adjusted EBITDA improving to negative 22 million in Q4 2023 [37] - Cash COGS per metric ton decreased by 23% year-over-year to approximately 464 million, a 3,900 per metric ton, reflecting a 19% year-over-year decline [30] - The company anticipates a low-double-digit percentage increase in sales volume for 2025, building on the 13% increase achieved in 2024 [32] Market Data and Key Metrics Changes - Global steel production outside of China was approximately 207 million tons in Q4 2024, remaining flat compared to Q4 2023 [27] - North American steel production decreased by 4% in 2024, while EU steel output increased by 3% [28] - The company expects demand for graphite electrodes to remain relatively flat in key regions in the near term, despite modest growth projections for global steel demand in 2025 [19][51] Company Strategy and Development Direction - The company is focused on regaining market share through enhanced customer engagement and the introduction of new products, such as the 800-millimeter electrode [10][11] - A price increase of 15% on uncommitted volumes for 2025 has been communicated to customers to restore profitability [23][24] - The company is committed to managing costs while also investing in technical capabilities and customer value propositions to support long-term growth [49][50] Management's Comments on Operating Environment and Future Outlook - Management noted geopolitical uncertainties, particularly regarding potential tariffs impacting the North American supply chain, and is preparing various responses [18][19] - The outlook for 2025 includes modest growth in global steel demand, with expectations of continued decarbonization efforts driving long-term demand for electric arc furnace (EAF) steel production [51][54] - Management remains cautious about near-term industry trends but is optimistic about long-term growth opportunities in the graphite electrode market [51][56] Other Important Information - The company successfully completed a financing transaction that extended debt maturities to December 2029, enhancing its financial foundation [15][47] - The company is actively managing working capital levels, having reduced working capital by 108 million reduction in 2023 [14][43] Q&A Session Summary Question: What was the benefit of the LCM inventory adjustment for the full year? - The full year benefit for 2025 is estimated to be around 17 million, with a fourth quarter benefit of approximately 3 million [62][63] Question: How will potential tariffs impact production and commitments? - The company is prepared to adjust its supply chain and production across various facilities to minimize the impact of tariffs, with flexibility to redirect production as needed [74][75] Question: What has been the customer feedback on the 15% price hike? - Initial customer reactions indicate an understanding of the need for the price increase, recognizing the importance of maintaining a healthy supply chain [94][92] Question: When could the price hikes start to reflect in results? - The first deliveries reflecting the price increase are expected in the second quarter of 2025, as negotiations for uncommitted volumes are ongoing [98] Question: What is the current pricing trend for needle coke? - Needle coke pricing remains largely unchanged, with super premium coke priced between 1,300 per metric ton, but a long-term view anticipates a shortage [99][100] Question: How is market share recovery progressing? - The company has made significant progress in regaining market share, particularly in the U.S., by focusing on customer engagement and value-added services [106][108]