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Sep 30, 2022
GrafTech Q3 2022 Earnings Report
Third quarter results reflected near-term challenges in the operating environment.
Key Takeaways
GrafTech's third quarter results fell short of expectations due to geopolitical tensions, global economic uncertainty, and the suspension of operations in Mexico. Net sales were $304 million, a 13% decrease compared to the same period in 2021. Net income was $93 million, or $0.36 per share, compared to $120 million, or $0.45 per share, in the third quarter of 2021.
Net income of $93 million
Earnings per share of $0.36 and adjusted EPS of $0.37
Adjusted EBITDA of $129 million, for a 42% adjusted EBITDA margin
Sales volume of 36 thousand metric tons
Forward Guidance
GrafTech expects graphite electrode demand to remain soft in the fourth quarter of 2022 and into 2023, reflecting market dynamics that are dictated by geopolitical conflict and economic uncertainty. The company anticipates sequential cost increases to continue in the fourth quarter of 2022 due to the current inflationary environment.
Positive Outlook
- Steel industry’s accelerating efforts to decarbonize will lead to increased adoption of the electric arc furnace method of steelmaking, driving long-term demand for graphite electrodes.
- Vertical integration into petroleum needle coke production via our Seadrift facility is a critical differentiator from our competitors
- Vertical integration into petroleum needle coke production via our Seadrift facility is foundational for our ability to reliably deliver high-quality graphite electrodes.
Challenges Ahead
- The current environment for the steel industry remains volatile with key markets, such as Europe, continuing to experience weakening demand as broader macroeconomic conditions deteriorate.
- Steel industry trends have also softened somewhat in the U.S.
- Graphite electrode demand to remain soft in the fourth quarter of 2022 and into 2023 reflecting market dynamics, which continue to be dictated by geopolitical conflict and economic uncertainty.
Historical Earnings Impact
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