Cleveland-based steel producing and iron mining firm Cleveland-Cliffs Inc. has reported what it calls record third-quarter revenue and net income for the period ended Sept. 30.
In the announcement accompanying its results, Cleveland-Cliffs says its $6 billion in revenue and $1.3 billion in net income are records for the time frame.
“In a short period of less than two years, we went from $2 billion annual revenues in 2019 to expected revenues of $21 billion in 2021,” says Lourenco Goncalves, the company’s board chair, president and CEO.
In those two years, the company has acquired steel mills formerly belonging to AK Steel and ArcelorMittal; has opened a hot briquetted iron (HBI) facility in Toledo, Ohio; and most recently has acquired multilocation scrap processing firm Ferrous Processing & Trading (FPT).
Regarding the company’s earnings before interest, taxes, depreciation and amortization (EBITDA), Goncalves says, “The $1.9 billion of third-quarter adjusted EBITDA we have just reported is equivalent to half of our year-to-date adjusted EBITDA of $3.8 billion, showing that our profitability continues to increase as we continue to implement our way of doing business, and take advantage off—and extract synergies from—our modern, efficient and unique footprint.”
Of the firm’s most recent acquisition, Goncalves says, “This month, we agreed to acquire Ferrous Processing and Trading Company, the leading prime scrap processor in the United States. The integration of FPT into our Cleveland-Cliffs footprint as a premier flat-rolled steel producer should allow us to utilize more prime scrap in our basic oxygen furnaces, further reducing both our utilization of coke and our carbon emissions. We are looking forward to closing this acquisition in the fourth quarter and capturing more value from our scrap right away. This is real growth; profitable growth; environmentally friendly growth.”
On the finished steel side, Goncalves adds, “The Cleveland-Cliffs business model is based on a significant amount of contract sales. We have already concluded the renewal of several annual fixed price sales contracts with a significant number of our most important customers, and we are pleased with the successful results of these negotiations. Differently from other steel companies more exposed to spot prices, we believe that our average sales price next year should be higher than in 2021, allowing us to continue to grow our already strong profitability and to further strengthen our balance sheet.”
Cleveland-Cliffs’ third-quarter 2021 steel output of 4.2 million tons consisted of 32 percent hot-rolled, 31 percent coated, 18 percent cold-rolled, 6 percent plate, 4 percent stainless and electrical and 9 percent other types of steel, including slabs and rail, according to the company.
The company joins several other United States-based steelmakers in reporting record or near-record profits for the most recently completed fiscal quarter, including Nucor Corp., Steel Dynamics Inc. (SDI) and Commercial Metals Co. (CMC).