Cleveland-Cliffs sees profits rising

Cleveland-Cliffs Inc., a steelmaker that also has iron mining and scrap processing operations, has issued a preliminary first-quarter 2023 financial report indicating it earned about $200 million on approximately $5.2 billion in revenue during the January to March time frame.

In its early release of selected financial results for the first quarter, the Cleveland-based company had steel shipments of 4.1 million net tons, contributing to $5.2 billion in revenue and approximately $200 million in earnings before interest, taxes, depreciation and amortization (EBITDA).

“Confirming our previous guidance, first-quarter EBITDA was significantly higher than fourth-quarter [2022] EBITDA,” Cleveland-Cliffs President and CEO Lourenco Goncalves says. “The increase in profitability in the first quarter was almost entirely driven by the unit cost reductions explained in detail on our last earnings call.”

Looking ahead, Goncalves says, “As we start the second quarter and continue to execute on further cost reductions as planned, we are also enjoying the full benefits of the meaningful price increases Cleveland-Cliffs has implemented for this year, which cover contracts with automotive and non-auto clients, as well as transactional sales. With that, we expect second quarter EBITDA will be multiple times higher than first quarter EBITDA.”

The steel producer will announce its full first-quarter results after the U.S. stock market closes April 24 and will host an earnings conference call the following day.

Cleveland-Cliffs also has announced in April it intends to offer $750 million in senior unsecured guaranteed notes due in 2030 in an offering it says is exempt from the registration requirements of the Securities Act of 1933.  

The company says it intends to use the net proceeds from the notes to “repay a portion of the borrowings under the company’s existing asset-based revolving credit facility.”