The following is a summary of the Cleveland-Cliffs Inc. (CLF) Q2 2024 Earnings Call Transcript:

Financial Performance:

• Cleveland-Cliffs reported robust financials with Q2 earnings characterized by strong cash flow generation of $362 million, an increase supported by higher shipments and lower costs.

• Adjusted EBITDA for the quarter reached $323 million despite lower than expected realized pricing.

• Significant debt reduction was achieved with $237 million allocated towards lowering net debt, leading to a current balance of $3.4 billion.

Business Progress:

• Cleveland-Cliffs focused on strategic cost reductions, achieving $30 per ton in cost reductions from Q2 to Q3, with further cost improvements anticipated into 2025.

• They advanced value-enhancing projects with major investments in environmental and operational upgrades, notably at facilities in Middletown and Butler, and the construction of a transformer plant in West Virginia.

• The acquisition of Stelco is expected to be a transformational step for the company, aimed at enhancing their market position and profitability in North America.

Opportunities:

• Cleveland-Cliffs is prioritizing opportunities in automotive steel, leveraging fixed-price advantages to bolster free cash flow in downcycles.

• The new transformer plant aligns with the electrification trend and is expected to yield high EBITDA margins, enhancing the company's financial performance.

• Benefits from the Stelco acquisition include improved market positioning and potential for immediate deleveraging through prepayable debt options.

More details: Cleveland-Cliffs IR

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