GrafTech Narrows Loss as Electrode Demand Rebounds
Adjusted EBITDA turned positive at $1.9 million after a $13.6 million loss in the first quarter.
GrafTech International (EAF), the graphite-electrode maker, narrowed its second-quarter net loss as higher production and shipments brought its gross result close to break-even.
Net sales rose 2% sequentially to $127.4 million, extending a rebound from $116.5 million in the fourth quarter of 2024. Revenue remained 3% below a year earlier as weaker pricing offset shipment growth.
Sales volume increased 10% from the first quarter and 8% from a year earlier to 30.8 thousand metric tons. The year-over-year pace slowed from 14% in the first quarter, while U.S. volume growth moderated to 29% from 37%.
The weighted-average realized price held near $3,900 per metric ton sequentially and fell 7% from a year earlier, a steeper decline than the first quarter's 5% drop. Customer commitments secured after price increases announced late in the first quarter carried weighted-average prices more than 15% above comparable commitments entered during that quarter. The increases ranged from $600 to $1,200 per metric ton on uncommitted volume.
Production climbed to 33.4 thousand metric tons from 29.4 thousand metric tons in both the first quarter and the year-earlier period, lifting capacity utilization to 74% from 65%. Cash cost of goods sold declined to $3,517 per metric ton from $3,848 in the first quarter as the company spread roughly flat sequential production costs across greater volume.
Those changes reduced the gross loss to $0.4 million from about $15.0 million in the first quarter. The adjusted net loss narrowed to $38.6 million from $53.5 million sequentially, while the GAAP net loss fell to $40.5 million from $86.9 million a year earlier. The prior-year result included a $43 million noncash deferred-tax valuation-allowance expense.
GrafTech reaffirmed its 2026 outlook for graphite-electrode sales-volume growth of 5% to 10%, a low-single-digit percentage-point decline in cash cost per metric ton and capital spending of about $35 million. Full-year production and sales volumes are expected to balance after producing 33.4 thousand metric tons and shipping 30.8 thousand metric tons in the second quarter as part of a planned inventory build.
Adjusted free cash flow fell to negative $75.5 million, reflecting semiannual interest payments and the inventory build, and the company expects the period to represent its peak quarterly cash requirement for 2026. Liquidity ended the quarter at $253 million after GrafTech drew the remaining $100 million from its delayed-draw term loan, raising long-term debt to $1.199 billion and leaving net debt near $1.080 billion.