CCI reports improved earnings for 2nd quarter
MARQUETTE — Cleveland-Cliffs Inc. announced today the second-quarter results for the period ending June 30, showing improvements over the same period in 2018.
CCI recorded a net income of $161 million, or 57 cents per diluted share. This includes a one-time loss of $18 million on “extinguishment of debt related to the proactive refinancing measures taken by the company,” officials said.
If this non-recurring charge is excluded, the earnings were 63 cents per diluted share, compared to a net income of $165 million or 55 cents per diluted share recorded in the 2018 quarter.
For the six months ending June 30, CCI’s net income was $139 million, an increase of over $50 million compared to the $81 million during the same period in 2018.
Cliffs maintained its full-year sales and production volume expectation of 20 million long tons for 2019, officials said.
The cost of goods sold was $480 million for the second quarter of 2019, an increase of $50 million as compared to the $430 million reported last year.
“The New Normal in the global iron ore market has started to influence our results, offsetting weak steel prices in the United States during the second quarter,” CCI’s Chairman, President and CEO Lourenco Goncalves said in a press release. “While the New Normal in iron ore is here to stay, the absurdly low prices for steel in the United States are just a temporary thing, and we should see higher steel prices going forward. On top of that, our Toledo plant construction is ahead of schedule, and we now expect to be producing (hot briquetted iron) in less than one year.
“It has become abundantly clear that the market advantage has shifted favorably towards responsible producers of environmentally friendly high-grade iron units, and only environmentally responsible players such as Cleveland-Cliffs will be rewarded by investors in the near future,” Goncalves continued. “Knowing that, we will continue to center and expand our proven strategy around this premise.”
The company reported record-high second-quarter sales volume for long tons, a six-year-high in average pellet price realization and an increase in consolidated revenues for 2019’s second quarter as compared to the same period in 2018.
CCI reported consolidated revenues of $743 million, a 4% increase as compared to the previous year’s $714 million.
It also reported a record-high second-quarter sales volume of 6.2 million long tons, a 4% increase from the same time last year due to “strong customer demand,” CCI officials said. Furthermore, the company reached a six-year-high average pellet price realization of $113 per long ton, according to a press release.
Cliffs expects to realize mining and pelletizing revenue rates in the range of $109 to $114 per long ton for the remainder of 2019 — a $1 per long ton increase compared to last quarter — based on assumptions that relevant pricing indicies will be consistent with their respective year-to-date averages for the remainder of the year.
The company also expects to be the sole producer of hot briquetted iron, or HBI by 2020 in the Great Lakes region with the development of its first production plant in Toledo, with 40,000 tons of intercompany sales to the plant recognized in the second quarter of 2019.
Cleveland-Cliffs Inc., founded in 1847, is the largest and oldest independent iron ore mining company in the United States.
For more information, visit www.clevelandcliffs. com.