US Iron Ore (USIO) pellet sales volume increased 10% to 6.5 million long tons from the prior-year quarter. Realized revenues per ton of $105.65 increased 17% from last year, mainly due to increased steel pricing and pellet premiums, which are magnified by favorable contract structures. The growth was partly offset by higher freight rates.
In August, the company completed the sale of its Asia Pacific Iron Ore assets to Mineral Resources Limited and reclassified the $228 million associated with the sale to recognize it as a gain in income from discontinued operations.
On October 18, the board of directors declared a quarterly cash dividend of $0.05 per common share, or $0.20 on an annualized basis, payable on January 15, 2019, to shareholders of record as of January 4, 2019. The company expects to pay the dividend on a quarterly basis, subject to the board’s approval.
Cliffs provided the guidance for USIO revenue rates in the range of $105 to $110 per long ton, on the assumption that iron ore prices, steel prices and pellet premiums will average their respective year-to-date averages for the remainder of 2018. The company also anticipates full-year sales volume of 21 million long tons and production volume of 20 million long tons.
The company also updated its 2018 capital expenditures. The expected spend for the Toledo HBI project was reduced to $175 million. The sustaining capital expectation of $75 million and the Northshore Mine upgrade spend expectation of $50 million were maintained.