What factors drove EAF's EPS growth in 2024?

GrafTech International's (EAF) EPS growth in 2024 was primarily driven by strategic initiatives focused on cost reduction and improvements in operational efficiency, despite challenging market conditions and weak demand for graphite electrodes.

1. **Cost Reductions**: GrafTech implemented aggressive cost-cutting measures, achieving an 18% reduction in cash costs per metric ton in the first half of 2024 compared to the same period in 2023. This reduction in costs, despite a decline in revenue, significantly impacted the bottom line, influencing the EPS positively.
2. **Increased Sales Volume**: Although there was a decline in weighted average realized prices, GrafTech saw a sequential improvement in sales volume by 6% in the second quarter of 2024 compared to the previous quarter. This increase in volume, especially in the third quarter with a 9% year-over-year growth, contributed to better revenue and potentially improved profitability per share.
3. **Effective Liquidity Management**: GrafTech's liquidity position improved with a total of approximately $254 million at the end of Q3 2024. This financial stability allowed the company to navigate through challenging times and support its operational and strategic initiatives, indirectly supporting EPS growth by ensuring the company could meet its financial obligations and invest in growth areas.
4. **Strategic Financing**: The company's successful financing transactions, including a $275 million delayed draw term loan and an extended revolving credit facility, provided additional liquidity and extended debt maturities. This strategic move not only strengthened the company's financial position but also reduced financial concerns, which could have negatively impacted EPS if left unaddressed.

Despite these positive factors, GrafTech faced significant headwinds in the graphite electrode market, including weak demand, low industry-wide capacity utilization rates, and persistent pricing pressures. However, the company's focused efforts on cost reduction and operational improvements were instrumental in driving EPS growth in 2024.