Boston, MA 09/24/2014 (wallstreetpr) – Manufacturer of graphite electrodes, GrafTech International Ltd (NYSE:GTI) Chief Executive Officer, Joel Hawthorne, said that the company continues to witness volatile and challenging conditions in both its engineered solutions, as well as, industrial materials segments. Therefore, he expects uncertainty persisting in its end markets and was re-evaluating its guidance. The company also announced a number of other initiatives such as cost cutting measures and management changes.
Cuts Outlook
The company’s CEO said that though it could see demand growing in the U.S. for its industrial materials division, it was not enough to compensate the weaknesses in demand from the rest of the regions, its statement indicated. It estimates 5% – 10% of graphite electrode shipments being shifted to the next year from the remainder period of the current year. Therefore, it plans to cut down its graphite electrode production, which would unfavorably impact its operating margins.
Similarly, its engineered solutions division witnesses continued weak-end markets as shipments remain under pressure. This apart, an unfavorable product mix has resulted in the company revisiting its revenue and margin targets.
GrafTech International Ltd (NYSE:GTI) has cut its EBITDA target to $105 – $115 million from $135 – $150 million for the current year 2014 while operating cash flow guidance was reduced to about $95 – $110 million from $125 – $140 million. Similarly, the company has trimmed its capital expenditures forecast to $80 – $90 million from $85 – $95 million whereas working capital guidance has been reduced to about $70 million from $90 million.
Management Changes
The company has also announced several changes in executive management and eliminated few positions. Accordingly, its Vice President for Global Sales for graphite electrode unit, Darrell Blair, would become President of the Industrial Materials division. Another Vice President for Corporate Research and Development, Julian Norley, was moved to the newly created Technology and Innovation Center.
Its subsidiary, Seadrift Coke LLP, President, Hermanus Pretorius would retire from November 1 in the current year.
Additional Measures
GrafTech International Ltd (NYSE:GTI) said that its planned additional operating and cost structure efforts would provide the company $30 million in annual savings to help improve profitability, as well as, position itself competitively.
