Revenues up 7 percent for Cliffs amid record iron ore sales

Friday, 27 April 2012 02:27:09 (GMT+3)   -  
SteelOrbis News

Cleveland, Ohio-based Cliffs Natural Resources reported Thursday that in Q1 2012, consolidated revenues were up 7 percent to a Q1 record of $1.3 billion. However, net income fell from $423 million in Q1 2011 to $376 million in Q1 2012.

During the quarter, Cliffs' consolidated sales margin of $304 million was unfavorably impacted by higher cost of goods sold rates, specifically, higher mining, maintenance and transportation costs. Cliffs also indicated that the prior year's first-quarter sales margin of $600 million included a $179 million favorable impact from negotiated settlements with two of the company's largest customers.

Q1 2012 US iron ore pellet sales volume increased to 3.4 million tons, compared with 2.8 million tons sold in the first quarter of 2011. The increase was primarily attributed to vessel timing and a stronger demand for iron ore pellets driven by higher North American steel industry capacity utilization of approximately 78 percent compared to 74 percent in the year-ago quarter. Meanwhile, iron ore revenues per ton were $117.40, a 29 percent decrease from Q1 2011, while cost per ton increased 91 percent to $61.14.

North American coal sales also improved, with total volumes of 1.4 million tons reflecting a 12 percent increase from the 1.3 million tons sold in the same quarter a year ago. North American Coal's first-quarter 2012 revenues per ton were down slightly to $121.61 versus $123.83 in the first quarter of 2011.

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