Cliffs Natural Resources Inc. Reports Third-Quarter 2015 Results
10 minutes ago - DJNF
CLEVELAND, Oct. 29, 2015 /PRNewswire/ --
-- Earnings of $0.19 per diluted share from continuing operations driven by
significant year-over-year cost savings
-- U.S. Iron Ore cash production costs3 decrease 16 percent to $49
per ton
-- Asia Pacific Iron Ore cash production costs3 decrease 49 percent
to $27 per ton
-- Capital expenditures decrease 66 percent to $24 million
-- SG&A expense decreases 55 percent to $22 million
Cliffs Natural Resources Inc. (NYSE: CLF) today reported third-quarter results for the period ended September 30, 2015. Third-quarter 2015 consolidated revenues of $593 million decreased 39 percent from the prior year's third-quarter revenues of $980 million. Cost of goods sold decreased by 26 percent to $538 million compared to $724 million reported in the third quarter of 2014.
For the third quarter of 2015, the Company recorded net income of $6 million compared to a net loss of $6.9 billion recorded in the prior-year quarter. The Company recorded a net loss attributable to Cliffs' common shareholders of $15 million, or $0.10 per diluted share, compared to a net loss attributable to Cliffs' common shareholders of $5.9 billion, or $38.49 per diluted share recorded in the third quarter of 2014.
Lourenco Goncalves, Cliffs' Chairman, President and Chief Executive Officer, said, "Our performance this past quarter illustrates how far we have come in our turnaround story. We have been able to deliver significant cost reductions in all areas of the business through disciplined execution of the strategy instituted last year." Mr. Goncalves added, "We expect the domestic steel market to improve in 2016 as trade actions reduce the pressure of imports and firm up steel pricing. Our solid cost position coupled with stronger demand from the mills should drive better profitability for Cliffs."
For the third quarter of 2015, adjusted EBITDA(1) was $60 million. Cliffs noted that this figure includes idle expenses of $33 million related to previously announced production curtailments. Excluding these idle expenses primarily associated with the Empire and United Taconite mines, Cliffs' adjusted EBITDA(1) would have been $93 million.
Adjusted EBITDA(1) by Segment (in millions)
Asia
U.S. Pacific Corporate/
Iron Ore Iron Ore Other Total
Q3 2015
Adjusted
EBITDA(1) (in
millions) $ 72.3 $ 9.7 $ (21.9) $60.1
YTD 2015
Adjusted
EBITDA(1) (in
millions) $ 254.6 $ 32.8 $ (70.4) $217.0
Cliffs' third-quarter 2015 SG&A expenses were $22 million, a 55 percent decrease when compared to the third-quarter 2014 expense of $50 million. Although the decrease is primarily attributable to the previous year's proxy contest as well as change in control and severance-related expenses that were not repeated this year, overall SG&A expenses were further decreased by lower staff costs and reduced external services spending.
Cliffs' third-quarter 2015 interest expense was $62 million, a 35 percent increase when compared to a third-quarter 2014 expense of $46 million. The increase was primarily driven by the issuance of secured notes during the first quarter of 2015. The Company noted that of the $62 million recorded, $53 million is a cash expense and the remaining $9 million is a non-cash expense.
U.S. Iron Ore
Three Months
Ended September Nine Months Ended
30, September 30,
2015 2014 2015 2014
Volumes - In
Thousands of
Long Tons
Total sales
volume 5,600 6,848 12,791 14,022
Total production
volume 4,099 5,814 14,978 16,256
Sales Margin -
In Millions
Revenues from
product sales
and services $471.0 $767.4 $ 1,152.5 $1,643.3
Cost of goods
sold and
operating
expenses 422.3 547.9 974.8 1,181.6
Sales margin $48.7 $219.5 $ 177.7 $461.7
Sales Margin -
Per Long Ton
Revenues from
product sales
and services* $76.52 $100.70 $ 80.85 $104.27
Cash production
cost(3) 48.99 58.38 57.25 65.63
Non-production
cash cost(3) 13.85 6.49 4.11 (0.08)
Cash cost(3) 62.84 64.87 61.36 65.55
Depreciation,
depletion and
amortization 4.98 3.78 5.60 5.79
Cost of goods
sold and
operating
expenses* 67.82 68.65 66.96 71.34
Sales margin $8.70 $32.05 $ 13.89 $32.93
* Excludes revenues and expenses related to domestic
freight, which are offsetting and have no impact on sales
margin. Revenues per ton also exclude venture partner cost
reimbursements.
U.S. Iron Ore pellet sales volume in the third quarter of 2015 was 5.6 million tons, an 18 percent decrease when compared to the third quarter of 2014. The decrease was driven by lower U.S. steel mill demand.
Cash production cost per ton(3) in U.S. Iron Ore was $48.99, down 16 percent from $58.38 in the prior year's third quarter. The decrease was driven by salaried workforce reductions and overall lower employment costs; reduced maintenance and repair costs based on cost reduction and predictive maintenance initiatives; and year-over-year lower energy rates.
Non-production cash cost per ton(3) of $13.85 included $33 million of idle costs.
Asia Pacific Iron Ore
Three Months Ended Nine Months Ended
September 30, September 30,
2015 2014 2015 2014
Volumes - In
Thousands of
Metric Tons
Total sales
volume 2,926 3,075 8,710 8,616
Total production
volume 2,928 2,789 8,655 8,310
Sales Margin -
In Millions
Revenues from
product sales
and services $ 122.2 $212.3 $ 384.8 $699.6
Cost of goods
sold and
operating
expenses 115.8 203.2 369.3 588.2
Sales margin $ 6.4 $9.1 $ 15.5 $111.4
Sales Margin -
Per Metric Ton
Revenues from
product sales
and services* $ 39.00 $69.04 $ 42.01 $81.20
Cash production
cost(3) 26.87 52.58 32.62 51.59
Non-production
cash cost(3) 7.85 (0.22) 5.42 2.33
Cash cost(3) 34.72 52.36 38.04 53.92
Depreciation,
depletion and
amortization 2.08 13.72 2.19 14.35
Cost of goods
sold and
operating
expenses* 36.80 66.08 40.23 68.27
Sales margin $ 2.20 $2.96 $ 1.78 $12.93
*Excludes revenues and expenses related to freight, which
are offsetting and have no impact on sales margin.
Third-quarter 2015 Asia Pacific Iron Ore sales volume decreased 5 percent to 2.9 million tons, from 3.1 million tons in 2014's third quarter. The volume decrease was driven by the timing of shipments related to port maintenance activities.
Cash production cost per ton(3) in Asia Pacific Iron Ore was $26.87, down 49 percent from $52.58 in the prior year's third quarter. The decrease was driven by reduced mining and administrative costs, as well as favorable exchange rate variances, the latter of which was approximately $12 per ton.
Debt and Cash Flow
Total debt at the end of the third quarter of 2015 was $2.7 billion, versus a comparable $3.1 billion at the end of the prior-year quarter. Cash and cash equivalents were $270 million, compared to $244 million at the end of the prior-year quarter.
At the end of the third quarter of 2015, Cliffs had net debt(4) of $2.5 billion, compared to $2.9 billion of net debt(4) at the end of the third quarter of 2014. There were no borrowings on the Company's asset-based lending facility at the end of the third quarter of 2015. The reduction in net debt(4) was a consequence of several actions including asset sales, exchange offers and open-market bond repurchases during the prior twelve months, including $48 million in open market purchases made in July and a $125 million tender offer completed in August 2015, which captured combined discounts totaling $79 million.
Capital expenditures during the quarter, including the discontinued coal operations, were $24 million, which is a 66 percent decrease compared to $69 million in the third quarter of 2014. Cliffs also reported depreciation, depletion and amortization of $36 million in the third quarter of 2015.
Outlook
Cliffs provides full-year expected revenues-per-ton ranges based on different assumptions of seaborne iron ore prices. Cliffs indicated that each different pricing assumption holds all other assumptions constant, including customer mix, as well as industrial commodity prices, freight rates, energy prices, production input costs and/or hot-band steel prices (all factors contained in certain of Cliffs' supply agreements).
The table below provides certain Platts IODEX averages for the remaining three months of 2015 and the corresponding full-year realization for the U.S. Iron Ore and Asia Pacific Iron Ore segments. The estimates consider actual Platts IODEX rates and Cliffs' revenue realizations for the first nine months of 2015. Cliffs previously furnished 2015 pricing expectations on July 29, 2015. Due primarily to improved customer mix partially offset by decreased hot-band steel price assumptions, Cliffs has increased its revenues-per-ton expectations for U.S. Iron Ore. At a fourth-quarter Platts IODEX assumption of $55 - $60 per ton, the full-year expected range of realizations has increased to $80 - $85 per ton from the previous expectation of $75 - $80 per ton.
(MORE TO FOLLOW) Dow Jones Newswires
October 29, 2015 08:00 ET (12:00 GMT)
10 minutes ago - DJNF
CLEVELAND, Oct. 29, 2015 /PRNewswire/ --
-- Earnings of $0.19 per diluted share from continuing operations driven by
significant year-over-year cost savings
-- U.S. Iron Ore cash production costs3 decrease 16 percent to $49
per ton
-- Asia Pacific Iron Ore cash production costs3 decrease 49 percent
to $27 per ton
-- Capital expenditures decrease 66 percent to $24 million
-- SG&A expense decreases 55 percent to $22 million
Cliffs Natural Resources Inc. (NYSE: CLF) today reported third-quarter results for the period ended September 30, 2015. Third-quarter 2015 consolidated revenues of $593 million decreased 39 percent from the prior year's third-quarter revenues of $980 million. Cost of goods sold decreased by 26 percent to $538 million compared to $724 million reported in the third quarter of 2014.
For the third quarter of 2015, the Company recorded net income of $6 million compared to a net loss of $6.9 billion recorded in the prior-year quarter. The Company recorded a net loss attributable to Cliffs' common shareholders of $15 million, or $0.10 per diluted share, compared to a net loss attributable to Cliffs' common shareholders of $5.9 billion, or $38.49 per diluted share recorded in the third quarter of 2014.
Lourenco Goncalves, Cliffs' Chairman, President and Chief Executive Officer, said, "Our performance this past quarter illustrates how far we have come in our turnaround story. We have been able to deliver significant cost reductions in all areas of the business through disciplined execution of the strategy instituted last year." Mr. Goncalves added, "We expect the domestic steel market to improve in 2016 as trade actions reduce the pressure of imports and firm up steel pricing. Our solid cost position coupled with stronger demand from the mills should drive better profitability for Cliffs."
For the third quarter of 2015, adjusted EBITDA(1) was $60 million. Cliffs noted that this figure includes idle expenses of $33 million related to previously announced production curtailments. Excluding these idle expenses primarily associated with the Empire and United Taconite mines, Cliffs' adjusted EBITDA(1) would have been $93 million.
Adjusted EBITDA(1) by Segment (in millions)
Asia
U.S. Pacific Corporate/
Iron Ore Iron Ore Other Total
Q3 2015
Adjusted
EBITDA(1) (in
millions) $ 72.3 $ 9.7 $ (21.9) $60.1
YTD 2015
Adjusted
EBITDA(1) (in
millions) $ 254.6 $ 32.8 $ (70.4) $217.0
Cliffs' third-quarter 2015 SG&A expenses were $22 million, a 55 percent decrease when compared to the third-quarter 2014 expense of $50 million. Although the decrease is primarily attributable to the previous year's proxy contest as well as change in control and severance-related expenses that were not repeated this year, overall SG&A expenses were further decreased by lower staff costs and reduced external services spending.
Cliffs' third-quarter 2015 interest expense was $62 million, a 35 percent increase when compared to a third-quarter 2014 expense of $46 million. The increase was primarily driven by the issuance of secured notes during the first quarter of 2015. The Company noted that of the $62 million recorded, $53 million is a cash expense and the remaining $9 million is a non-cash expense.
U.S. Iron Ore
Three Months
Ended September Nine Months Ended
30, September 30,
2015 2014 2015 2014
Volumes - In
Thousands of
Long Tons
Total sales
volume 5,600 6,848 12,791 14,022
Total production
volume 4,099 5,814 14,978 16,256
Sales Margin -
In Millions
Revenues from
product sales
and services $471.0 $767.4 $ 1,152.5 $1,643.3
Cost of goods
sold and
operating
expenses 422.3 547.9 974.8 1,181.6
Sales margin $48.7 $219.5 $ 177.7 $461.7
Sales Margin -
Per Long Ton
Revenues from
product sales
and services* $76.52 $100.70 $ 80.85 $104.27
Cash production
cost(3) 48.99 58.38 57.25 65.63
Non-production
cash cost(3) 13.85 6.49 4.11 (0.08)
Cash cost(3) 62.84 64.87 61.36 65.55
Depreciation,
depletion and
amortization 4.98 3.78 5.60 5.79
Cost of goods
sold and
operating
expenses* 67.82 68.65 66.96 71.34
Sales margin $8.70 $32.05 $ 13.89 $32.93
* Excludes revenues and expenses related to domestic
freight, which are offsetting and have no impact on sales
margin. Revenues per ton also exclude venture partner cost
reimbursements.
U.S. Iron Ore pellet sales volume in the third quarter of 2015 was 5.6 million tons, an 18 percent decrease when compared to the third quarter of 2014. The decrease was driven by lower U.S. steel mill demand.
Cash production cost per ton(3) in U.S. Iron Ore was $48.99, down 16 percent from $58.38 in the prior year's third quarter. The decrease was driven by salaried workforce reductions and overall lower employment costs; reduced maintenance and repair costs based on cost reduction and predictive maintenance initiatives; and year-over-year lower energy rates.
Non-production cash cost per ton(3) of $13.85 included $33 million of idle costs.
Asia Pacific Iron Ore
Three Months Ended Nine Months Ended
September 30, September 30,
2015 2014 2015 2014
Volumes - In
Thousands of
Metric Tons
Total sales
volume 2,926 3,075 8,710 8,616
Total production
volume 2,928 2,789 8,655 8,310
Sales Margin -
In Millions
Revenues from
product sales
and services $ 122.2 $212.3 $ 384.8 $699.6
Cost of goods
sold and
operating
expenses 115.8 203.2 369.3 588.2
Sales margin $ 6.4 $9.1 $ 15.5 $111.4
Sales Margin -
Per Metric Ton
Revenues from
product sales
and services* $ 39.00 $69.04 $ 42.01 $81.20
Cash production
cost(3) 26.87 52.58 32.62 51.59
Non-production
cash cost(3) 7.85 (0.22) 5.42 2.33
Cash cost(3) 34.72 52.36 38.04 53.92
Depreciation,
depletion and
amortization 2.08 13.72 2.19 14.35
Cost of goods
sold and
operating
expenses* 36.80 66.08 40.23 68.27
Sales margin $ 2.20 $2.96 $ 1.78 $12.93
*Excludes revenues and expenses related to freight, which
are offsetting and have no impact on sales margin.
Third-quarter 2015 Asia Pacific Iron Ore sales volume decreased 5 percent to 2.9 million tons, from 3.1 million tons in 2014's third quarter. The volume decrease was driven by the timing of shipments related to port maintenance activities.
Cash production cost per ton(3) in Asia Pacific Iron Ore was $26.87, down 49 percent from $52.58 in the prior year's third quarter. The decrease was driven by reduced mining and administrative costs, as well as favorable exchange rate variances, the latter of which was approximately $12 per ton.
Debt and Cash Flow
Total debt at the end of the third quarter of 2015 was $2.7 billion, versus a comparable $3.1 billion at the end of the prior-year quarter. Cash and cash equivalents were $270 million, compared to $244 million at the end of the prior-year quarter.
At the end of the third quarter of 2015, Cliffs had net debt(4) of $2.5 billion, compared to $2.9 billion of net debt(4) at the end of the third quarter of 2014. There were no borrowings on the Company's asset-based lending facility at the end of the third quarter of 2015. The reduction in net debt(4) was a consequence of several actions including asset sales, exchange offers and open-market bond repurchases during the prior twelve months, including $48 million in open market purchases made in July and a $125 million tender offer completed in August 2015, which captured combined discounts totaling $79 million.
Capital expenditures during the quarter, including the discontinued coal operations, were $24 million, which is a 66 percent decrease compared to $69 million in the third quarter of 2014. Cliffs also reported depreciation, depletion and amortization of $36 million in the third quarter of 2015.
Outlook
Cliffs provides full-year expected revenues-per-ton ranges based on different assumptions of seaborne iron ore prices. Cliffs indicated that each different pricing assumption holds all other assumptions constant, including customer mix, as well as industrial commodity prices, freight rates, energy prices, production input costs and/or hot-band steel prices (all factors contained in certain of Cliffs' supply agreements).
The table below provides certain Platts IODEX averages for the remaining three months of 2015 and the corresponding full-year realization for the U.S. Iron Ore and Asia Pacific Iron Ore segments. The estimates consider actual Platts IODEX rates and Cliffs' revenue realizations for the first nine months of 2015. Cliffs previously furnished 2015 pricing expectations on July 29, 2015. Due primarily to improved customer mix partially offset by decreased hot-band steel price assumptions, Cliffs has increased its revenues-per-ton expectations for U.S. Iron Ore. At a fourth-quarter Platts IODEX assumption of $55 - $60 per ton, the full-year expected range of realizations has increased to $80 - $85 per ton from the previous expectation of $75 - $80 per ton.
(MORE TO FOLLOW) Dow Jones Newswires
October 29, 2015 08:00 ET (12:00 GMT)
I'm in it to win it!
NASDAQ DIP and RIP
Here is the best word that describes what i do here.
Intuitive;
means having the ability to understand or know something without any direct evidence or reasoning process.
I was born with it, I'm truly blessed!
Alway's searching for winners'
NASDAQ DIP and RIP
Here is the best word that describes what i do here.
Intuitive;
means having the ability to understand or know something without any direct evidence or reasoning process.
I was born with it, I'm truly blessed!
Alway's searching for winners'
