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Mar 31, 2021
Cleveland-Cliffs Q1 2021 Earnings Report
Cleveland-Cliffs reported a strong first quarter, marked by significant revenue growth and a return to profitability following strategic acquisitions.
Key Takeaways
Cleveland-Cliffs reported first-quarter 2021 consolidated revenues of $4.0 billion, a significant increase from the prior-year's $359 million. The company recorded a net income of $41 million, or $0.07 per diluted share, a substantial improvement compared to the prior-year's net loss of $52 million, or $0.18 per diluted share. Adjusted EBITDA for the quarter was $513 million, compared to $23 million in the first quarter of 2020. The company has increased its full-year 2021 adjusted EBITDA guidance to approximately $4.0 billion.
Consolidated revenues reached $4.0 billion, significantly up from $359 million year-over-year.
Net income was $41 million, or $0.07 per diluted share, a turnaround from the previous year's net loss.
Adjusted EBITDA surged to $513 million, compared to $23 million in the same quarter last year.
Full-year 2021 adjusted EBITDA guidance increased to approximately $4.0 billion, reflecting improved contractual renewals and market conditions.
Cleveland-Cliffs
Cleveland-Cliffs
Forward Guidance
The Company has increased its full-year 2021 adjusted EBITDA guidance to approximately $4.0 billion, up $500 million from its previous guidance of approximately $3.5 billion. The Company's second-quarter adjusted EBITDA expectation is $1.2 billion.
Positive Outlook
- Increased full-year 2021 adjusted EBITDA guidance to approximately $4.0 billion.
- Second-quarter adjusted EBITDA expectation is $1.2 billion.
- Anticipates record levels of free cash flow.
- Expects to pay down a substantial amount of debt.
- Aims to reach leverage of less than 1x by the end of the year.
Challenges Ahead
- Guidance is based on the assumption that the US HRC index price averages $1,100 per net ton for the last nine months of the year.
- Net cash used by operating activities of $373 million in the first quarter of 2021 was impacted by approximately $650 million of net working capital build primarily related to the completion of the unwind of the ArcelorMittal USA factoring agreement.
- Increasing receivables due to rising prices.
- Made $118 million in deferred pension contributions under the CARES Act during the first quarter, which will not recur.
- Continued volatility of steel and iron ore market prices.