Steel producer Cleveland-Cliffs Inc. reported full-year and fourth-quarter results for the period ended December 31, 2023.
Full Year Consolidated Results
Full year 2023 consolidated revenues were $22.0 billion, compared to the prior year’s consolidated revenues of $23.0 billion.
As previously foreshadowed in Cliffs’ 2022 10-K, full year results included a goodwill impairment charge totaling $125 million, related to the tooling & stamping business within the other businesses segment, primarily driven by revised investment plans and higher discount rates. For the full year 2023, the company generated GAAP net income of $450 million, or $0.78 per diluted share, with adjusted net income of $545 million and adjusted EPS of $1.07 per diluted share. This compares to 2022 net income of $1.4 billion, or $2.55 per diluted share, with adjusted net income of $1.4 billion or $2.74 per diluted share. For the full year 2023, Adjusted EBITDA was $1.9 billion, compared to $3.2 billion in 2022. The reduction was primarily driven by lower steel index pricing in 2023 compared to 2022, partially offset by higher sales volumes and lower operating costs.
In 2023, the company recorded cash flows from operations of $2.3 billion and had capital expenditures of $646 million, equating to free cash flow of $1.6 billion. During 2023, the Company reduced its net debt by $1.3 billion, using the majority of its free cash flow for this purpose.
Lourenco Goncalves, Cliffs’ Chairman, president and chief executive officer, said: “2023 was another great year for Cleveland-Cliffs, in which we accomplished several goals in commercial, operations, finance and human resources. Steel demand remained healthy throughout the entire year, with our most important market – the automotive sector – performing well. Even with the UAW labor strike late in Q3 and into Q4, automotive steel demand remained consistently strong, as we anticipated. After it was clear that the strike was not creating any real issues in the marketplace, non-automotive clients de-stocking their inventories and betting on lower steel prices, were compelled to buy steel at higher prices.”
Goncalves added: “Our 2023 total steel shipments of 16.4 million tons set a record since we became a steel company in 2020. We now have four consecutive quarters with steel shipments above 4 million tons. We generated robust free cash flow of more than $1.6 billion and primarily used it to continue to pay down debt, while also repurchasing more than 10 million shares at an average price of $14.68 per share. Our net debt of $2.9 billion at the end of 2023 is below our publicly stated target of $3.0 billion, and our liquidity is now at an all-time high of $4.5 billion. We ended 2023 with a zero balance on our ABL, as planned. Going forward, and assuming a fair scrap marketplace – free from artificial, provoked and hard-to-explain moves – with scrap demand growing and scrap supply shrinking, there is no good reason for scrap prices to go down. If true supply and demand for scrap in the U.S. prevails, there is no good reason for HRC prices to go below $1,000 per net ton.”
