UPDATE 1-SGL flags 400 mln euro loss for 2013, scraps dividend

Thu Feb 20, 2014 1:55pm EST

* Says 2013 EBITDA about 60 pct below 2012 level

* Says difficult to match 2013 operating profit this year

* Sees negative trends in graphite electrodes (Adds EBITDA, analyst expectations, industry background)

FRANKFURT, Feb 20 (Reuters) - SGL Group said it expected a loss of almost 400 million euros ($549 million) for 2013 and would not pay a dividend for the year, citing weakness at its main graphite electrodes business.

SGL is the world's biggest supplier of graphite electrodes, used in electric arc furnaces that recycle scrap metal into steel, where it competes with GrafTech of the United States as well as Japan's Tokai Carbon and Nippon Carbon. The company also helps make carbon fibre reinforced parts for BMW's electric cars.

"The negative trends observed in the final quarter 2013 have continued into the first weeks of the new fiscal year 2014, particularly in the main business with graphite electrodes," the German company said in a statement on Thursday.

If that situation does not improve significantly in the course of the year, it will be difficult to achieve the operating earnings level of 2013, it added.

Thomson Reuters data shows that analysts on average had expected a 2013 net loss of 147 million euros for SGL.

SGL last year suffered from harsh competition in Asia and a weak overall demand for graphite electrodes as cheap Chinese blast furnace steel took global market share from electric arc furnaces outside China.

SGL said 2013 earnings before interest, taxes, depreciation and amortisation (EBITDA) would be at the bottom end of its target range, meaning 60 percent below the 2012 level of 240 million euros.

The implied EBITDA of about 96 million euros for 2013 compares with 111 million euros that had been expected by analysts on average.

($1 = 0.7293 euros) (Reporting by Ludwig Burger; editing by Tom Pfeiffer and Jane Merriman)

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