VANCOUVER (miningweekly.com) – US iron-ore company Cleveland-Cliffs has delivered on promises to aggressively drive up growth in its earnings before interest, taxes, depreciation and amortisation (Ebitda) metric, reporting growth greater than 25% for the second consecutive year.
Based in Cleveland, Ohio, the company reported full-year 2017, adjusted Ebitda of $513-million, compared with $374-million in 2016.
"As a consequence of the several successful initiatives implemented in overall strategy, commercial, operations, and finance since I joined this great company in August of 2014, we have delivered in 2017 the second consecutive year of greater than 25% Ebitda growth," said chairperson, president and CEO Lourenco Goncalves in a press statement.
Cleveland-Cliffs reported a fourth-quarter profit of $317.8-million, or $1.05 a share.
Earnings, adjusted for pretax gains, were $0.26 a share, beating analyst estimates for per-share earnings of $0.17.
The company reported revenue of $600.9-million for the quarter, which was below analyst forecasts calling for fourth-quarter revenues of $619-million.
For the year, the company reported profit of $374.9-million, or $1.28 a share. Revenue totalled $2.33-billion.
Cliffs advised that pellet sales for its US Iron Ore business segment in the fourth quarter were 5.4-million long tons, a 22% decrease when compared with 6.9-million long tons sold in the fourth quarter of 2016. The decrease was a result of strong shipping volumes during the first nine months of 2017, leading to lower required fourth-quarter shipments to meet full-year customer nominations.
Meanwhile, fourth-quarter Asia Pacific Iron Ore segment sales volumes of two-million metric tons reflected 30% quarter-on-quarter lower volumes, driven mainly by lower production volumes – a result of operational decisions reflecting current market conditions and quality ore availability.
Cliffs said it would accelerate the closure of mining operations in Australia, which will likely occur this year still as it increasingly focuses on its US operations.
Cliffs expects full-year sales and production volumes of about 20-million long tons from its US Iron Ore business. This compares with 18.7-million long tons sales and 18.8-million long tons of production in 2017. Cliffs' full-year 2018 US Iron Ore cash cost of goods sold and operating expense forecast at $58 to $63 per long ton, compared with $60 a long ton for the full-year 2017. Cliffs expects to realise revenue rates for its US operations in the range of $97 to $102 per long ton.
"2017 was also the year in which the industry finally woke up to the importance of both rational supply behaviour and environmental compliance. This new, more logical approach to business should provide us solid support to deliver even stronger results in 2018," Goncalves said.
Cleveland-Cliffs' NYSE-listed equity has gained about 16% since the start of the year, but on Thursday closed down 5.51% at $7.89 apiece.