GrafTech which is one of the largest producers of graphite electrodes producer based in U.S. (which accounts for about 24% of non-Chinese global production capacity) has announced its second-quarter (Apr-Jun) as well as the first half results of 2019. The key highlights of the company’s performance are as follows:
Sales volume up by 5% Y-o-Y basis: GrafTech second-quarter sales volume surged by 5% y-o-y basis from 42,000 tonnes in Q2 2018 to 45,000 tonnes in Q2 2019. There is no change in company’s sales volume against the sales in the first quarter of 2019. The company’s half-yearly sales in 2019 have registered an increase of 7% from 84,000 tonnes in H1 2018 to 90,000 tonnes in H1 2019.
Net sales up by 5% in Q2 2019: The company’s net sales value have been recorded at USD 480 million in Q2 2019 against USD 456 million in Q2 2018. In H1 2019, the same have been receded at USD 995 million against USD 908 million in H1 2018.
Per tonne sales realizations surge by 2% Y-o-Y: In Q2 2019, GrafTech’s average per tonne sales realisations stood at USD 10,014/MT against USD 9,783/MT in Q2 2018. In Q1 2019, the same stood at USD 9,954 tonnes. In H1 2019, the company’s weighted average realized price stood at USD 9,984 tonnes against USD 9,885 tonnes in H1 2018.
Production volume registers a 6% increase Y-o-Y: GrafTech’s production volume in Q2 2019 has been recorded at 48,000 tonnes against 45,000 tonnes in Q2 2018. In H1 2019, the same have been recorded at 95,000 tonnes against 88,000 tonnes in H1 2018. The increase in volumes have been recorded due to completion of debottlenecking projects.
Capacity utilisation drops by 4% in Q2 2019: Amid tepid GE demand, GrafTech’s production capacity utilisation stood at 83% in Q2 2019 against 87% in the corresponding quarter of previous year. In the first half of 2019, the same stood at 82% against 85% in H1 2018.
Capacity utilization reflects production volume as a percentage of production capacity and Includes graphite electrode facilities in Calais, France; Monterrey, Mexico; Pamplona, Spain and St. Marys, Pennsylvania. The St. Marys, Pennsylvania facility was temporarily idled effective the second quarter of 2016 except for the machining of semi-finished products sourced from other plants. In the first quarter of 2018, the company’s St. Marys facility began graphitizing a limited amount of electrodes sourced from its Monterrey, Mexico facility.
EBITDA falls in Q2 2019: GrafTech’s Earnings before Interest Tax and Depreciation (EBITDA) for Q2 FY2019 have been recorded at USD 284 million against USD 292 million in Q2 2018. In H1 2019, the same stood at USD 568 million against USD 602 million in H1 2018.
Other important information:
• GrafTech has entered into long term agreements for 675,000 MT of GE at a weighted average price of USD 9,800 tonnes (2018-2023).
• The company’s highest sales have been dedicated to Western Europe (23%), followed by NAFTA (22%).
• The needle coke has got strong demand from Electric vehicle segment which will result in its tight supplies in the coming quarters.
• The company’s management has estimated that increased third-party needle coke costs will increase company’s Q3 2019 cost of sales by approximately USD 6 million compared to Q2 2019.
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