Cleveland-Cliffs Inc. (NYSE: CLF) today reported its financial results for the second quarter, which ended on June 30, 2024.
Second-Quarter 2024 Highlights
- Revenues: $5.1 billion
- Steel Shipments: 4.0 million net tons
- Net Income: $9 million
- Adjusted Net Income: $50 million
- Adjusted EPS: $0.11 per diluted share
- Adjusted EBITDA: $323 million
- Net Debt Decrease: $237 million to $3.4 billion
- Cash Flow from Operations: $519 million
- Free Cash Flow: $362 million
- Shares Repurchased: 7.5 million
- Liquidity: $3.7 billion as of June 30, 2024
Second-quarter 2024 revenues were $5.1 billion, compared to $5.2 billion in the first quarter of 2024. The Company recorded GAAP EPS of $0.00 per diluted share to Cliffs shareholders and adjusted EPS of $0.11 per diluted share. The GAAP results included charges and losses totaling $47 million, mainly due to the indefinite idle of the Weirton tinplate facility and loss on extinguishment of debt. Second-quarter GAAP net income was $9 million, compared to a first-quarter 2024 GAAP net loss of $53 million.
Second-quarter 2024 Adjusted EBITDA was $323 million, compared to $414 million in the first quarter of 2024. The Company repurchased 7.5 million CLF common shares under the previously authorized $1.5 billion share repurchase program.
CEO’s Statement
Cliffs’ Chairman, President, and CEO Lourenco Goncalves said: “Our substantial free cash flow generation of $362 million in the second quarter clearly demonstrates Cliffs’ ability to perform through the cycle, even in times of adverse business conditions. Despite a less than ideal steel demand and weak pricing throughout the quarter, Cliffs operated very well. We met our cost reduction target and shipped the tonnage we had planned for. With that, we were able to pay down over $200 million in debt and also return approximately $125 million to our shareholders via share buybacks.”
Mr. Goncalves added: “We also took action on several matters that will lead to further long-term success. We are excited about the acquisition of Stelco that we announced last week. We have long admired Stelco and are eager to incorporate one of the lowest-cost flat-rolled steelmaking assets in North America into our footprint. We have continued to engage with all key stakeholders associated with the transaction, including the USW and high-level government officials. It is clear that they recognize the net benefit we will provide to Canada, Ontario, and the local communities where Stelco operates, particularly on the environmental and social fronts. Our latest scores from ISS reflect this, as in July we achieved a 1 rating on both environmental and social, the best possible score and well ahead of our industry peers.”
Mr. Goncalves continued: “In addition to the acquisition of Stelco, we have shown our ability to identify and pursue downstream opportunities. As we announced today in West Virginia, we are repurposing our Weirton tinplate plant to produce transformers. The transformers we will produce in Weirton will be sold directly to end-users and other players in the electrical sector, supplying a market that desperately needs more transformers, even before AI takes off in the near future and demand for electricity in our country starts to grow exponentially. This project will take advantage of our current under-utilized capacity to produce 30% to 40% more tonnage of American-made Grain Oriented Electrical Steels (GOES), produced exclusively by Cleveland-Cliffs in Butler, Pennsylvania. At the same time, our transformer factory will provide re-employment in West Virginia for 600 USW-represented workers. We are thrilled to bring back to work almost the entire workforce unjustly displaced by foreign-produced tinplate dumped into the United States by countries like China, Japan, South Korea, and the Netherlands.”
Mr. Goncalves concluded: “Looking forward, we expect to benefit in Q3 from another major step down in costs. Our largest end market, the automotive sector, remains in good shape, and orders from service center customers are expected to increase as seaborne steel imports dry up. Our recent growth announcements, both through M&A and downstream expansion, are clear examples that we are still in the early stages of the new Cleveland-Cliffs that was born in 2020 when we became a steel company. We are clearly not finished yet, and the best is yet to come.
