CLEVELAND – (BUSINESS WIRE) – Cleveland-Cliffs Inc. (NYSE:CLF) today released results for the full year and fourth quarter ended December 31, 2021.
Consolidated revenue for all of 2021 was $20.4 billion, up from $5.3 billion the previous year.
For all of 2021, the company’s net income was $3.0 billion, or $5.36 per diluted share. This compares to a net loss of $81 million, or $0.32 per diluted share, in 2020.
Consolidated revenue for the fourth quarter of 2021 was $5.3 billion, up from $2.3 billion in the fourth quarter last year.
In the fourth quarter of 2021, the company posted a net income of $899 million, or $1.69 per diluted share. This includes costs of $47 million, or $0.09 per diluted share, related to inventory renewal and amortization of acquisition-related costs. By comparison, net income for the fourth quarter of 2020 was $74 million, or $0.14 per diluted share, including acquisition-related costs and depreciation of accumulated inventory of $44 million, or $0.14 per diluted share. equal to $0.10.
Adjusted EBITDA1 in the fourth quarter of 2021 was $1.5 billion compared to $286 million in the fourth quarter of 2020.
Of the cash received in the fourth quarter of 2021, the company will use $761 million to acquire Ferrous Processing and Trading (“FPT”). The company used the remaining cash received during the quarter to pay off the principal of about $150 million.
Also in the fourth quarter of 2021, OPEB pension and non-asset liabilities decreased by approximately $1 billion, from $3.9 billion to $2.9 billion, mainly due to actuarial gains and strong returns on assets. Debt reduction (net of assets) for all of 2021 is approximately $1.3 billion, including corporate equity contributions.
The Cliffs Board of Directors has approved a new share buyback program to buy back outstanding common stock. Under the share buyback program, the company will have the flexibility to purchase up to $1 billion in shares through public market acquisitions or privately negotiated deals. The company is under no obligation to make any purchases and the program may be suspended or terminated at any time. The program goes into effect today with no specific expiration date.
Lourenço Gonçalves, Chairman, President and CEO of Cliffs, said: “Over the past two years, we have completed the construction and operation of our flagship state-of-the-art direct reduction plant, and have also acquired and paid for two major steel production facilities. companies and a large scrap metal recycling company. Our 2021 results clearly demonstrate just how strong Cleveland-Cliffs has become, with our revenue more than tenfold from $2 billion in 2019 to over $20 billion in 2021. $5.3 billion and net income of $3.0 billion last year. Our strong cash flow has allowed us not only to reduce our diluted shares by 10%, but also to lower our leverage to a very healthy level of 1x Adjusted EBITDA.”
Mr. Gonçalves continued: “The results for the fourth quarter of 2021 show that an orderly approach to supply chains is critical for us. In the third quarter of last year, we realized that our customers in the automotive industry would not be able to resolve their supply chains in the fourth quarter. Demand in this industry will be weak and will exceed widely expected demand for service centers in the fourth quarter, so we have decided not to chase weaker demand, but instead have accelerated maintenance on several of our steel and finishing operations. The actions had a short-term impact on our unit costs in the fourth quarter but should improve our results in 2022.”
Mr. Goncalves added: “Cleveland-Cliffs as a whole is the largest steel supplier to the US automotive industry. With the widespread use of HBI in blast furnaces and the widespread use of scrap in BOFs, we can now reduce pig iron production, reduce coke and reduce CO2 emissions. to new international benchmarks for steel companies similar to our product portfolio When our automotive customers compare our emissions performance to other major companies in Japan, Korea, France, Austria, Germany, Belgium and other countries This is especially important when comparing suppliers steel.In other words, Cleveland-Cliffs is developing a premium steel supplier to the automotive industry through the operational changes we have implemented and not relying on breakthrough technology or large-scale investment to set new CO2 emission standards.”
Mr. Goncalves concluded: “2022 will be another significant year for Cleveland-Cliffs profitability as demand recovers, especially from the automotive industry. We are now selling a fixed price based on our recently renewed contract. Most contract volumes with significantly higher selling prices , Even with today’s steel futures curve, we expect our 2022 average realized steel price to be higher than 2021. As we look forward to another great year in 2022 ., our capital investment With limited demand, we can now confidently implement shareholder-focused actions ahead of our initial expectations.”
On November 18, 2021, Cleveland-Cliffs completed the acquisition of FPT. The FPT business belongs to the steel division of the company. Steel production results listed include FPT operating results for the period 18 November 2021 to 31 December 2021 only.
Net steel production for the full year of 2021 was 15.9 Mt, including 32% coated, 31% hot-rolled, 18% cold-rolled, 6% heavy plate, 4% stainless steel and electrical products, and 9% other products, including plates and rails. Net steel production in the fourth quarter of 2021 was 3.4 million tonnes, including 34% coated, 29% hot-rolled, 17% cold-rolled, 7% thick plate, 5% stainless steel and electrical products, and 8% other products, including slabs. and rails.
Steel production revenue for 2021 was $19.9 billion, of which approximately $7.7 billion, or 38% of sales in the distributors and refiners market; $5.4 billion, or 27% of sales, in the infrastructure and manufacturing markets; $4.7 billion, or 24% of sales for the automotive market and $2.1 billion, or 11% of sales, for steelmakers. Steel production revenue in the fourth quarter of 2021 was $5.2 billion, of which approximately $2.0 billion, or 38% of sales in the markets of distributors and processors; $1.5 billion, or 29% of sales, in the infrastructure and manufacturing markets; $1.1 billion or 22% of sales. sales for the automotive market: $552 million, or 11% of steel mill sales.
The cost of steel production for 2021 was $15.4 billion, including $855 million of depreciation, wear and tear and amortization of $161 million of inventory costs. Full-year Steelmaking segment Adjusted EBITDA of $5.4 billion included $232 million of SG&A expense. Full-year Steelmaking segment Adjusted EBITDA of $5.4 billion included $232 million of SG&A expense. Segment of steel production for the whole year. Adjusted EBITDA of $5.4 billion includes $232 million in general and administrative expenses.全年炼钢部门调整后的EBITDA 为54 亿美元，其中包括2.32 亿美元的SG&A 费用。全年炼钢部门调整后的EBITDA 为54 亿美元，其中包括2.32 亿美元的SG&A 费用。 Скорректированный показатель EBITDA сталелитейного сегмента за весь год составил 5,4 млрд долларов, включая 232 млн долларов SG&A. Adjusted EBITDA for the steel segment for the full year was $5.4 billion, including $232 million from SG&A. Steelmaking cost of sales in the fourth quarter of 2021 was $3.9 billion, including $222 million of depreciation, wear and tear and amortization of $32 million of inventory costs. Fourth-quarter 2021 Steelmaking segment Adjusted EBITDA of $1.5 billion included $52 million of SG&A expense. Fourth-quarter 2021 Steelmaking segment Adjusted EBITDA of $1.5 billion included $52 million of SG&A expense. Steel Segment in Q4 2021 Adjusted EBITDA of $1.5 billion includes $52 million in general and administrative expenses. 2021 年第四季度炼钢部门调整后的EBITDA 为15 亿美元，其中包括5200 万美元的SG&A 费用。 2021 年第四季度炼钢部门调整后的EBITDA 为15 亿美元，其中包括5200 万美元的SG&A 费用。 Adjusted EBITDA for the steel segment for the fourth quarter of 2021 was $1.5 billion, including $52 million in general and administrative expenses.
Q4 2021 results for other businesses, particularly tooling and stamping, were negatively impacted by inventory adjustments and the December 2021 tornado that hit the Bowling Green, Kentucky plant.
As of February 8, 2022, the company’s total liquidity was approximately $2.6 billion, including approximately $100 million in cash and approximately $2.5 billion in ABL credit facility.
Based on the successful renewal of the relevant fixed price sale and purchase agreement, and based on the current 2022 futures curve, which assumes an average HRC index price of $925 per net ton until the end of the year, the company expects the average selling price in 2022 to be reached. About 1225 dollars per ton net.
This compares to the company’s average selling price of $1,187 per net ton in 2021, when the HRC index averages around $1,600 per net ton.
Cleveland-Cliffs Inc. will host a teleconference on February 11, 2022 at 10:00 AM ET. The call will be broadcast live and hosted on the Cliffs website: www.clevelandcliffs.com.
Cleveland-Cliffs is the largest flat steel manufacturer in North America. The Cliffs Company, founded in 1847, is the mine operator and the largest producer of iron ore pellets in North America. The company is vertically integrated from raw materials, direct reduction and scrap to primary steel production and subsequent finishing, stamping, tooling and pipes. We are the largest steel supplier to the automotive industry in North America and serve many other markets with our extensive range of flat steel products. Cleveland-Cliffs, headquartered in Cleveland, Ohio, has approximately 26,000 employees based in the US and Canada.
This press release contains statements that are “forward-looking statements” within the meaning of the federal securities laws. All statements other than historical facts, including, but not limited to, statements about our current expectations, estimates and forecasts regarding our industry or business, are forward-looking statements. We caution investors that any forward-looking statements are subject to risks and uncertainties that could cause actual results and future trends to differ materially from those expressed or implied by such forward-looking statements. Investors are warned not to rely too much on forward-looking statements. Risks and uncertainties that could cause actual results to differ from those described in the forward-looking statements are as follows: Operational disruptions associated with the ongoing COVID-19 pandemic, including the possibility of a significant portion of our employees or contractors on site. morbidity or inability to carry out their daily work functions; persistent volatility in the market prices of steel, iron ore and scrap metal, which directly or indirectly affect the prices of the products we sell to customers; highly competitive uncertainty cyclical steel industry and our perception of the automotive industry’s impact on steel Depending on demand, the automotive industry is seeing a trend towards weight loss and supply chain disruptions such as semiconductor shortages, which could lead to lower steel consumption; potential weaknesses and uncertainties in the global economic environment, global steel overcapacity, excess iron ore or stone, widespread steel imports and declining market demand, including due to the protracted COVID-19 pandemic; due to the ongoing COVID-19 pandemic or other causes, one or more of our key customers (including customers among suppliers or contractors) are experiencing severe financial difficulties, bankruptcy, temporary or permanent closures, or operational problems, which may result in reduced demand for our products complicating the collection of accounts receivable and/or claims by the supplier for non-fulfillment of its contractual obligations to us due to force majeure or otherwise; with the US Government in connection with the Commerce Expansion Act of 1962 (as amended by the Commerce Act of 1974), US-Mexico-Canada Agreements and/or other trade agreements, tariffs, treaties or policies pursuant to Section 232; the risks associated with actions taken pursuant to Article 11; and the uncertainty of obtaining and enforcing effective anti-dumping and countervailing duties to offset the harmful effects of unfair trade imports. ; the impact of existing and developing government regulations, including those related to climate change and potential environmental regulations related to carbon emissions, as well as related costs and liabilities, including failure to obtain or comply with necessary operational and environmental permits, approvals, modifications or other permits . , or from any implementation of improvements to comply with regulatory changes (including potential financial guarantee requirements) related to government or regulatory agencies and costs; the potential impact of our activities on the environment or exposure to hazardous substances; our ability to maintain adequate liquidity, our level of debt and the availability of capital may limit our ability to secure working capital, planned capital expenditures, acquisitions and other general corporate objectives or our business’ ongoing needs for financial flexibility and cash flows required for funding; our ability to either fully reduce our indebtedness or return it to shareholders within the currently anticipated capital period; adverse changes in credit ratings, interest rates, foreign exchange rates and tax laws; litigation, claims related to commercial and commercial disputes, environmental matters, government investigations, work injury or injury claims, property damage, labor and employment matters or property-related litigation, results of arbitration or government proceedings, and costs arising in communications with operations and other matters; disruptions in the supply chain or changes in the cost or quality of energy, including electricity. , natural gas and diesel fuel or critical raw materials and materials, including iron ore, industrial gases, graphite electrodes, scrap metal, chromium, zinc, coke and metallurgical coal; problems or failures related to suppliers delivering products to our customers, transferring production materials or products between our facilities, or delivering raw materials to us; natural or man-made disasters, severe weather, unforeseen geological conditions, critical equipment failures, infectious disease outbreaks, tailings breaches and other unforeseen events; breach or failure of our information technology systems (including those related to cyber security); Liabilities and expenses associated with any business decision to close an operating facility or mine that could adversely affect the carrying amount of the underlying asset and incur impairment charges or closure and recovery obligations, as well as the uncertainty associated with the resumption of operation of any previously idle operating facilities or mines; our ability to realize the expected synergies and benefits from recent acquisitions and to successfully integrate acquired businesses into our existing operations, including the uncertainties associated with maintaining relationships with customers, suppliers and employees, our exposure to known and unknown liabilities associated with acquisitions, our level of self-insurance and our ability to obtain adequate third party liability insurance to adequately cover potential adverse events and business risks; maintaining a social license to deal with the concerns of our stakeholders, including the impact of our operations on local communities, the reputational impact of operating in carbon-intensive industries that produce greenhouse gas emissions, and our ability to develop sustainable operational and safety records; we successfully identify and improve any strategic capital; the ability to invest in or develop projects, achieve planned performance or levels cost-effectively, diversify our product portfolio and add new customers; a reduction in our actual economic mineral reserves or current Mineral Reserve Estimates, as well as any defects in title or any loss of mining property, any leases, licenses, easements or other ownership interests; availability of workers to fill critical job roles and potential labor shortages as a result of the ongoing COVID-19 pandemic, as well as our ability to attract, hire, develop and retain key People Capabilities Our ability to maintain satisfactory industrial relations with unions and workers Unexpected or higher contributions, unsecured obligation costs associated with pension and OPEB obligations due to changes in the value of plan assets or increases in required contributions; the amount and timing of the redemption of our common shares; our internal control over financial reporting may be materially deficient or materially deficient.
For additional factors affecting Cliffs, see Part I – Item 1A. Our Form 10-K Annual Report for the year ended December 31, 2020, Form 10-Q Quarterly Reports for the quarters ended March 31, 2021, June 30, 2021, and September 30, 2021 Securities Commission and US stock exchanges.
In addition to US GAAP consolidated financial statements, the Company also presents EBITDA and Adjusted EBITDA on a consolidated basis. EBITDA and Adjusted EBITDA are non-GAAP financial measures used by management in evaluating operating performance. These measures should not be presented in isolation from, instead of, or instead of, financial information prepared and presented in accordance with US GAAP. The presentation of these measures may differ from non-GAAP financial measures used by other companies. The table below reconciles these consolidated measures to their most comparable GAAP measures.
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