GrafTech International Ltd. (NYSE:EAF) Q4 2018 Earnings Conference Call Transcript
Feb 08, 2019 • 10:00 am ET
Good morning. My name is Lisa, and I'll be your conference operator today. At this time, I would like to welcome everyone to the GrafTech Full Year and Fourth Quarter 2018 Earnings Conference Call. (Operator Instructions) Thank you.
Meredith Bandy, Vice President of Investor Relations, you may begin your conference.
Hi. Thank you, Lisa. Good morning and welcome to GrafTech's fourth quarter conference call. On the call with me today is Chief Executive Officer, David Rintoul; and Chief Financial Officer, Quinn Coburn.
Turning to our first slide. As a reminder, some of the matters discussed on this call may include forward-looking statements regarding, among other things, results, performance, and strategies. These statements are based on current expectations and are subject to risks and uncertainties. Factors that could cause actual results to differ materially from those indicated by forward-looking statements are shown here.
We will also discuss certain non-GAAP financial measures for which you will find reconciliations in these slides. The slides are posted on our website at graftech.com in the Investor Relations section. For your reference, a replay of the call will also be available on the website.
With that, I'm pleased to turn the call over to Dave.
David J. Rintoul
Thank you, Meredith, and good morning, everyone. I will begin the call with a discussion of our safety performance and 2018 highlights, Quinn Coburn will then cover the financial aspects of our business, I will then conclude our prepared remarks with a discussion on the overall and steel market, after which we will open the call for questions.
Without exception, a safe plant is an efficient plant. We finished 2018 with a total injury rate of 1.49 near GrafTech's all-time lows. We recognize that our focus must remain on continuous improvement of our safety performance to drive toward our ultimate goal of zero injuries. That means every worker going home safely every day. I would like to take this opportunity to thank our team for their focus on our safety mission while attaining excellent 2018 financial results.
Turning over to slide three for an update of our 2018 results and the current business environment. GrafTech delivered record operational and financial results in 2018. Our operations ran at extremely high levels throughout the year, producing 179,000 tonnes of graphite electrodes and 111,000 tonnes of needle coke.
In 2018, GrafTech earned net income of $854 million, adjusted EBITDA from continuing operations of $1.2 billion, and generated free cash flow of $768 million. We also delivered on our promise to return cash to shareholders introducing a quarterly dividend, buying back $225 million of shares, and paying a $204 million special dividend at year-end.
Market fundamentals for our business remain solid. Our Q4 weighted average price was approximately $9,950 per metric ton. During the fourth quarter, we sold spot business at prices that averaged approximately $15,000 per metric ton. Currently, we're seeing spot and short-term contract prices of approximately $12,000 per metric ton. While off recent highs, the market for graphite electrodes remained strong.