Cleveland-Cliffs increases income year on year

Cleveland-Cliffs Inc. earned $275 million in net income in this year’s third quarter, marking a 66.7 percent increase from the $165 million in net income it earned in the third quarter of 2022.

The Cleveland-based company, which also mines and processes iron ore and operates the Ferrous Processing & Trading network of scrap yards, increased its income while experiencing a slight decrease in overall revenue.

In this year’s third quarter, Cleveland-Cliffs had revenue of $5.6 billion, a figure down by 1.75 percent from the $5.7 billion in revenue it experienced in the same period last year.

In terms of outbound steel shipments, Cliffs sent out 4.1 million tons of product in the third quarter of 2023, including record automotive shipments, according to the company. That figure is nearly 13 percent higher compared with the 3.63 million tons shipped on year earlier.

The company, one of two remaining blast furnace operators in the United States, also has record liquidity of $4.4 billion at the conclusion of the third quarter.

“[This third quarter] was our third consecutive quarter with steel shipments above 4 million tons,” Cleveland-Cliffs President and CEO Lourenco Goncalves says. “We generated over $600 million in free cash flow in the quarter and, as we had announced we would do, we continued to use this strong cash generation to pay down debt and buy back shares.

"With that, our net debt and diluted share count have reached new record lows since our full transformation from a merchant mining to a steel company. Our liquidity is also now at an all-time high.”

Regarding the most recent quarter, Goncalves adds, “Q3 was specifically highlighted by Cleveland-Cliffs achieving another record in automotive steel shipments. This strength in shipments to our automotive clients has been happening both before and also after the UAW strike affecting three of our clients headquartered in Detroit was announced, with our other major clients outside of Detroit picking up the slack.”

He says steel service centers made fewer purchases in the third quarter but may need to make up the difference in the current one. “With underlying demand that is still strong and depleted inventories among service centers, we were able to successfully bring buyers off the sidelines with our price increase announcements,” Goncalves adds.

“We expect that in Q4 we will see the end of the UAW strike and more normal buying patterns from service centers. That should support us not only in Q4, but into 2024 as well.”