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Cleveland-Cliffs reports record second-quarter 2021 results

Second-quarter 2021 consolidated revenues were $5.0 billion, compared to the prior-year second-quarter revenues of $1.1 billion.
 (Cleveland-Cliffs logo)
(Cleveland-Cliffs logo) (WLUC)
Published: Jul. 22, 2021 at 5:01 PM EDT
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CLEVELAND (WLUC) - Cleveland-Cliffs Inc. Thursday reported second-quarter results for the period ended June 30, 2021.

Second-quarter 2021 consolidated revenues were $5.0 billion, compared to the prior-year second-quarter revenues of $1.1 billion.

For the second quarter of 2021, the Company recorded net income of $795 million, or $1.33 per diluted share. This included the following charges totaling $77 million, or $0.13 per diluted share:

  • Charges of $37 million, or $0.06 per diluted share, of inventory step-up amortization, related to the revaluation of inventory following the acquisition of substantially all of the operations of ArcelorMittal USA
  • Charges of $22 million, or $0.04 per diluted share, for debt extinguishment costs
  • Charges of $18 million, or $0.03 per diluted share, for acquisition-related loss on equity method investment

In the prior-year second quarter, the Company recorded a net loss of $108 million, or a loss of $0.31 per diluted share.

For the first six months of 2021, the Company recorded revenues of $9.1 billion and net income of $852 million, or $1.48 per diluted share. In the first six months of 2020, the Company recorded revenues of $1.5 billion and a net loss of $157 million, or a loss of $0.51 per diluted share.

Second-quarter 2021 adjusted EBITDA 1 was $1.4 billion, compared to an adjusted EBITDA 1 loss of $82 million in the second quarter of 2020.

Outlook

The Company expects third-quarter 2021 adjusted EBITDA2 of approximately $1.8 billion and free cash flow2 generation of $1.4 billion.

Cliffs’ Chairman, President, and CEO Lourenco Goncalves said: “In the second quarter of 2021 we achieved all-time quarterly records in revenue, net income, and adjusted EBITDA. The numbers unequivocally confirm our efficiency in operating the new footprint, resulting from the integration of the two major steel companies acquired in 2020 as a single and indivisible mining and steel company. They also demonstrate our flawless execution in ramping up our state-of-the-art Direct Reduction plant in Toledo to the current level of production above nominal capacity.”

Goncalves added: “This quarter was also a clear illustration of our raw material cost and quality advantage over others in the industry, particularly the ones fully dependent on scarce prime scrap and dirty pig iron imported from polluting countries. The decision we made four years ago to invest $1 billion in our Direct Reduction plant has been proven to be not only right, but also perfectly timed. Our internal use of HBI has minimized our reliance on prime scrap in our BOFs and EAFs, as well as enhanced productivity and reduced emissions in our blast furnaces as demonstrated by our actual CO2 emissions figures.”

Goncalves concluded: “Our team has done a remarkable job in meeting the demand for steel we have been experiencing over the past six months, overcoming the impact of the automotive chip shortage as well as limited rail and truck availability. Steel demand remains excellent and, as we continue to negotiate our contract businesses with several clients in different sectors, it is progressively translating into substantially higher contract prices later this year and into 2022. Ultimately, we are set for a monumental debt reduction during the back half of this year, and the achievement of zero net debt in 2022.”

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