U.S. Steel CEO bullish on future after record second quarter, mini mill investment 'paying for itself'

U.S. Steel President and CEO Dave Burritt said he’s bullish on the company’s future after a record-setting financial quarter and an investment in a mini mill “already paying for itself.”

He thanked employees during a conference call with investors after U.S. Steel brought in $1.6 billion in earnings before interest, taxes, depreciation and amortization, a company record for the second quarter.

“We appreciate you for your continued focus and commitment to our shared safety goals,” Burritt said. “As we continue to execute our Best for All strategy, we are progressing toward a less capital and carbon-intensive business. … The rapid progress we’ve made demonstrates our continued commitment to become the best.”

The company has generated $6.7 billion in EBITDA over the last year. 

“To become the best, we are expanding our competitive advantages by leveraging our unique competitive advantage and lowest-cost iron ore, combining highly capable integrated assets with low-cost and technologically advanced mini mills, and investing and finishing capabilities that best serve our customers,” Burritt said. “As we’ve said before, to become the best for all, we need the best from all. I want to take a moment to recognize the continued trade enforcement by the current administration.”

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Continued trade enforcement is needed to sustain the domestic steel industry, given global steelmaking overcapacity and the persistent threat of steel dumping, Burritt said.

“The United States remains the leader in sustainable steelmaking as many in our industry have embraced the electrification of the steelmaking process, which is the most sustainable way to make steel,” he said. “As geopolitical and macroeconomic impacts shift, our Best for All strategy remains constant.”

In the second quarter, U.S. Steel generated $642 million in free cash flow. The steelmaker ended the quarter with $5.5 billion in liquidity, including $3 billion in cash. 

“Last quarter, you heard us say when we do well, you do well, and I want to continue that drumbeat today. In April, we committed to meaningfully increasing direct returns in the second quarter, and we delivered on that commitment to stockholders,” Burritt said. “In the quarter, we returned approximately $400 million of capital to stockholders, and we continued our direct returns in July, exhausting our $800 million program in less than a year.”

Since October, U.S. Steel has repurchased about 13% of our stock. The company is buying back another $500 million in stock from shareholders.

The company said its diversification into minimills is already paying off.

“The well-timed Big River Steel acquisition has outperformed expectations. Since its inception in first quarter of 2021, our mini mill segment has contributed EBITDA of nearly $2 billion. The Big River acquisition has already more than paid for itself,” Burritt said.  “Our new mini mill segment now represents nearly 30% of our domestic flat-rolled steel EBITDA. It’s lowering our capital and carbon intensity and is expected to deliver more consistent results. While the acquisition of Big River Steel has transformed our business model, we’ve also transformed our balance sheet. Specifically, we strengthened our balance sheet.”

Last year, the company repaid $3 billion in debt. 

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