Cleveland-Cliffs (CLF) Q4 2024 earnings summary

Executive summary

• 2024 saw the weakest steel demand since 2010, with significant declines in automotive, construction, and industrial sectors, leading to a full-year revenue drop to $19.2B and a GAAP net loss of $708M.

• Order books and lead times improved substantially by year-end, with hot-rolled steel lead times rising from three to seven weeks, signaling a strong start to 2025.

• The Stelco acquisition, completed in November 2024, was integrated smoothly, immediately contributing positive EBITDA and expected synergies of $120M by year-end 2025.

• Achieved record safety with a total reportable incident rate of 0.9 and a 50% reduction in serious injury/fatality exposures year-over-year.

• Positioned to benefit from newly announced 25% tariffs on steel imports and downstream products, supporting domestic manufacturing.

Financial highlights

• Q4 2024 posted an $81M adjusted EBITDA loss and a GAAP net loss of $434M, marking the expected trough in profitability.

• Full-year 2024 adjusted EBITDA was $780M, down from $1.9B in 2023, with steel shipments of 15.6M net tons.

• Q4 shipments were 3.8M tons, with average selling price at $976/ton, down $70 from Q3, mainly due to Stelco's lower price mix.

• SG&A expenses for 2024 decreased by nearly $100M (16%) year-over-year, mainly from lower incentive compensation.

• Liquidity at year-end 2024 was $3B, with all secured debt capacity intact.

Outlook and guidance

• 2025 is expected to see increased domestic steel demand, higher shipments, and further cost reductions of ~$40/ton, with capital expenditures targeted at $700M.

• For every $100 increase in HRC price, annual revenue is projected to rise by $1B, largely flowing to EBITDA.

• SG&A expenses projected at ~$625M; D&A at ~$1.1B; pension/OPEB payments at ~$150M.

• All free cash flow will be directed toward debt reduction until leverage targets are met.

• Order books show marked improvement for Q1 2025; steel pricing rallying from trough.