Cliffs Natural Resources Inc (CLF) swung to a net loss for the quarter ended Sep. 30, 2016. The company has made a net loss of $25.80 million, or $ 0.12 a share in the quarter, against a net profit of $10.60 million, or $0.10 a share in the last year period. Revenue during the quarter dropped 6.73 percent to $553.30 million from $593.20 million in the previous year period. Gross margin for the quarter expanded 615 basis points over the previous year period to 15.43 percent. Total expenses were 93.73 percent of quarterly revenues, down from 95.08 percent for the same period last year. This has led to an improvement of 135 basis points in operating margin to 6.27 percent.
Operating income for the quarter was $34.70 million, compared with $29.20 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $61.90 million compared with $60.10 million in the prior year period. At the same time, adjusted EBITDA margin improved 106 basis points in the quarter to 11.19 percent from 10.13 percent in the last year period.
Lourenco Goncalves, Cliffs' chairman, president and chief executive officer, said, "In the third quarter, we reduced our debt by another $500 million, bringing our net debt down to $2 billion. Our flawless operational performance, commercial accomplishments and financial execution during the last two years have earned the respect of investors and banking institutions, allowing us to execute in Q3 another important transaction: the early repayment of the 2018 Notes. With that, we have eliminated the last obstacle in our way to better times." Mr. Goncalves added, "We look forward to finishing out the year strong in Q4, in what we anticipate to be a quarter with substantial cash-flow generation."
Operating cash flow turns positive
Cliffs Natural Resources Inc has generated cash of $72.10 million from operating activities during the nine month period as against cash outgo of $59.50 million in the last year period. The company has spent $39.50 million cash to meet investing activities during the nine month period as against cash outgo of $57.20 million in the last year period.
The company has spent $186 million cash to carry out financing activities during the nine month period as against cash inflow of $98.20 million in the last year period.
Cash and cash equivalents stood at $132.20 million as on Sep. 30, 2016, down 51.07 percent or $138 million from $270.20 million on Sep. 30, 2015.
Working capital declines
Cliffs Natural Resources Inc has witnessed a decline in the working capital over the last year. It stood at $376.10 million as at Sep. 30, 2016, down 7.36 percent or $29.90 million from $406 million on Sep. 30, 2015. Current ratio was at 2.16 as on Sep. 30, 2016, up from 1.61 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 39 days for the quarter from 72 days for the last year period. Days sales outstanding were almost stable at 22 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 39 days for the quarter compared with 72 days for the previous year period. At the same time, days payable outstanding went up to 22 days for the quarter from 21 for the same period last year.
Debt comes down
Cliffs Natural Resources Inc has recorded a decline in total debt over the last one year. It stood at $2,195.90 million as on Sep. 30, 2016, down 19.32 percent or $525.70 million from $2,721.60 million on Sep. 30, 2015. Cliffs Natural Resources has recorded a decline in long-term debt over the last one year. It stood at $2,195.90 million as on Sep. 30, 2016, down 19.32 percent or $525.70 million from $2,721.60 million on Sep. 30, 2015. Total debt was 123.86 percent of total assets as on Sep. 30, 2016, compared with 119.82 percent on Sep. 30, 2015. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: [email protected]
