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TORONTO (miningweekly.com) – US miner Cliffs Natural Resources reported a third-quarter net loss of $5.9-billion, or $38.49 a share, after booking a $5.7-billion write-down of its iron-ore and coal assets.
The Cleveland, Ohio-based company, who came under new management in July, following activist shareholder Casablanca Capital’s victory in a proxy contest, wrote down $4.5-billion related to the Bloom Lake iron-ore project, in Quebec, $28-million related to the shuttered Wabush iron-ore mine, in Labrador, $390-million related to its Asia Pacific Iron Ore (APIO) business segment and $539-million related to its North American Coal assets.
The company also booked a $254-million charge on its chromite assets, after indefinitely pulling out of Ontario’s Ring of Fire earlier this year.
Excluding the one-off charges, the company reported an adjusted profit of $33-million, or $0.21 a share, compared with an adjusted net income of $144-million, or $0.88 a share, in the same three-month period ended October 30 a year earlier.
Consolidated revenues of $1.3-billion were 16% lower year-on-year, mainly owing to iron-ore pricing sliding 32% in the past year, while metallurgical coal pricing declined 17%.
Wall Street analysts had on average expected an adjusted loss of $0.03 a share, on revenue of $1.28-billion.
For the third quarter, adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) was $233-million, down 45% from the prior-year quarter.
“The core of our business, United States Iron Ore (USIO), demonstrated remarkable strength in the third quarter as it continues to generate more EBITDA than the company on a consolidated basis. Additionally, our USIO and APIO businesses generated a combined $295-million in adjusted EBITDA,” Cliffs’ chairperson, president and CEO Laurenco Goncalves said.
Bloom Lake was once seen by analysts as a key growth project for Cliffs, but the mine’s first phase had been plagued by higher-than-expected costs, and Cliffs shelved plans for building a second phase on its own.
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