Cliffs reports fourth quarter & 2016 earnings

CLEVELAND, OH — Cliffs Natural Resources Inc. today reported fourth-quarter and full-year results for the period ended December 31, 2016.

Fourth-quarter 2016 consolidated revenues of $754 million increased 58 percent from the prior year’s fourth-quarter revenues of $476 million. As a result of increased volumes sold, cost of goods sold increased by 32 percent to $573 million compared to $433 million reported in the fourth quarter of 2015.

For the fourth quarter of 2016, the Company recorded net income of $81 million compared to a net loss of $58 million recorded in the prior-year quarter. The Company recorded net income attributable to Cliffs’ common shareholders of $79 million, compared to a net loss attributable to Cliffs’ common shareholders of $60 million recorded in the fourth quarter of 2015.

Lourenco Goncalves, Chairman, President and Chief Executive Officer, said: “2016 was the year in which we finalized the execution of the operational, commercial and financial actions necessary to ensure Cliffs will have a great future. Among the actions accomplished last year are several new sales agreements entered with clients, including the renewal of our long-term supply contract with our largest customer, and a number of capital markets transactions that were successfully executed to reduce debt and extend our maturity runway.” Mr. Goncalves added: “Despite the undeniable fact that the underlying business environment was far from ideal during almost all of 2016, the environmentally compliant and safety oriented performance of the Cliffs teams in the United States and in Australia resulted in a very profitable year with strong cash flow generation.” Mr. Goncalves concluded: “We are excited about Cliffs and about our future. A much more favorable business environment in the U.S. and a newly adopted rational behavior in the international iron ore market support the work we have done internally in our company. With a much lower debt profile and extended maturities, and several new and more favorable commercial agreements that we put in place in 2016, we expect Cliffs to deliver strong and sustainable results in 2017.”

U.S. Iron Ore pellet sales volume in the fourth quarter of 2016 was 6.9 million long tons, a 53 percent increase when compared with 4.5 million long tons sold in the fourth quarter of 2015. The increase was a result of improved steel market conditions driving increased pellet demand and new customer arrangements in 2016.