September 08, 2008

Cleveland Cliffs 2007 net profit slips

Cleveland Cliffs Inc announced that its consolidated Q4 of 2007 revenues were USD 782.5 million up by 43% YoY as compared with USD 549.0 million in the Q4 of 2006. The increase for the quarter was primarily driven by a USD 180 million increase in revenues from the Company's North American Iron Ore segment and USD 51 million in sales generated by its North American Coal segment acquired during 2007.

Operating income for the Q4 of 2007 went up by 52% YoY to USD 138.9 million from USD 91.2 million in the Q4 of 2006. The increase was primarily the result of increased sales margin at the Company's North American Iron Ore segment, partially offset by higher selling, general and administrative expenses and a negative sales margin in its North American Coal segment.

Revenues from product sales and services in 2007 were a record USD 2.28 billion an increase of 18% YoY as compared with USD 1.92 billion last year. Operating income increased by 2% YoY to USD 383.3 million and net income was USD 270.0 million as compared with USD 280.1 million in 2006.

Mr Joseph A Carrabba chairman, president & CEO of Cleveland Cliffs said that "Cliffs' strong performance is the result of focused execution by our operating teams in North America and Asia Pacific, as well as unprecedented demand for the Company's products. Our portfolio of both established and newly producing iron ore and metallurgical coal assets now spans three continents and has us uniquely positioned to capitalize on global industry dynamics in 2008 and beyond."

Mr Carrabba added that "In the fourth quarter, our North American Iron Ore team delivered a record performance. In addition, at our North American Coal mines, integration efforts to implement Cliffs' proven production methodologies and processes are on track. This includes our recovery from the unanticipated geology at our Pinnacle Mine, which negatively impacted third quarter results and carried over to the beginning of the fourth quarter."