GrafTech Registers 32% Sales Decline In Q4 Due To Higher Costs, Demand Softness, Suspension Of Mexico Operations; Sees Recovery In Second Half - GrafTech International (NYSE:EAF)

GrafTech International Ltd EAF reported a fourth-quarter sales decline of 31.9% year-over-year to $247.52 million, beating the consensus of $221.00 million.
Adjusted EPS of $0.17 missed the consensus of $0.22.
Sales volume of 28 thousand metric tons, a decrease of 37% Y/Y; and Production volume of 29 thousand MT, a decrease of 36% Y/Y.
The weighted average realized price for LTA volume for the quarter was $9,400 per MT.
Gross margin decreased by 1,574 bps to 33.9%. The operating profit fell to $63.89 million (-60.57% Y/Y), and the margin declined by 1,879 bps to 25.81%.
GrafTech generated cash from operating activities of $50.02 million, compared to $100.03 million a year ago. Adjusted free cash flow was $23.14 million.
Adjusted EBITDA decreased by 56.2% Y/Y to $80.1 million, and the margin contracted by 1,796 bps to 32.4%.
GrafTech had cash and equivalents of $135 million and total debt of ~$922 million.
"Our year-over-year performance for the fourth quarter was impacted by higher costs, softer industry demand, and the impact of the temporary suspension of our operations in Mexico," said Marcel Kessler, Chief Executive Officer, and President. "As we announced in November, we are pleased to have reached an agreement that allowed for the restart of our Monterrey, Mexico facility."
Outlook: Graftech estimates sales volume for the first six months of 2023 will halve Y/Y due to headwinds from weak demand for graphite electrodes and the suspension of operations in Monterrey, Mexico. Graftech expects a recovery in the second half.
Price Action: EAF shares are trading lower by 8.19% at $6.05 in the premarket on the last check Friday.

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