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Jun 30, 2020
Cleveland-Cliffs Q2 2020 Earnings Report
Cleveland-Cliffs experienced a challenging quarter due to the COVID-19 pandemic, impacting client operations and leading to a net loss, but liquidity was preserved and positioned for a strong second semester.
Key Takeaways
Cleveland-Cliffs Inc. reported a total revenue of $1.1 billion for Q2 2020, compared to $743 million in the prior year's second quarter. The company recorded a net loss of $108 million, or $0.31 per diluted share, compared to a net income of $161 million, or $0.57 per diluted share in the prior-year second quarter. The adjusted EBITDA loss was $82 million, including $159 million in idle costs and $32 million in corporate margin eliminations related to intercompany pellet sales.
Total revenues reached $1.1 billion, an increase from the previous year's $743 million.
Net loss stood at $108 million, a decrease compared to the prior year's net income of $161 million.
Adjusted EBITDA loss reported at $82 million, impacted by idle costs and corporate margin eliminations.
Liquidity remained strong, exceeding $1.1 billion, attributed to healthy client operations.
Forward Guidance
Cleveland-Cliffs anticipates demonstrating the potential of its new footprint during the second half of 2020, with demand accelerating faster than expected. They expect idle costs to decrease significantly, leading to improved unit cost performance and positive free cash flow, including the completion of the Toledo HBI project.
Positive Outlook
- Facilities idled during Q2 have resumed normal operations.
- Positive adjusted EBITDA recorded in June, ahead of initial forecasts.
- Idle costs expected to be less than $50 million in Q3 and minimal in Q4.
- Significant improvement in unit cost performance anticipated.
- Expectation of positive free cash flow in the second half of the year.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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