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Dec 31, 2023
GrafTech Q4 2023 Earnings Report
Reported fourth quarter and full year results, reflecting persistent softness in the commercial environment. A cost rationalization and footprint optimization plan was announced.
Key Takeaways
GrafTech International Ltd. reported a challenging year in 2023, with Q4 net loss of $217 million, impacted by a goodwill impairment charge of $171 million and LCM inventory valuation adjustment of $12 million. The company is taking actions to reduce costs and optimize its manufacturing footprint in response to ongoing softness in the commercial environment.
Net loss of $217 million, or $0.85 per share, including a goodwill impairment charge of $171 million and a lower of cost or market ("LCM") inventory valuation adjustment of $12 million.
Adjusted EBITDA of negative $22 million, including the LCM inventory valuation adjustment.
Sales volume of 24 thousand metric tons ("MT").
Net cash provided by operating activities of $9 million.
Adjusted free cash flow of $4 million
Forward Guidance
GrafTech anticipates weak demand for graphite electrodes in the near term due to persistent softness in the commercial environment. They expect a modest year-over-year improvement in sales volume for 2024 and are taking actions to reduce costs and optimize their manufacturing footprint.
Positive Outlook
- Anticipate a modest year-over-year improvement in our sales volume for 2024, most notably in the first quarter of 2024
- Actions to further reduce our cost structure and optimize our manufacturing footprint.
- Benefit of reduced market pricing for certain raw materials and energy
- Anticipated improvement in our sales and production volume levels
- Expected to result in a significant year-over-year decline in our cash cost of goods sold per MT.
Challenges Ahead
- Expect demand for graphite electrodes in the near term will remain weak
- Reflecting persistent softness in the commercial environment
- Steel industry production remains constrained by global economic uncertainty
Historical Earnings Impact
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Avg. Return Before/After Earnings
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