UPDATE 2-Cliffs Natural posts loss after writedown, cuts payout
* Shares of Cliffs drop 7.5 pct after regular trading hours
* Dividend slashed by 76 pct, a reversal from last year
* Cliffs plans share offering to repay debt
Feb 12 (Reuters) - Cliffs Natural Resources Inc reported a quarterly loss on Tuesday, dragged down by a writedown in the value of a Canadian acquisition, higher costs and lower iron ore prices, prompting the miner to slash its dividend by 76 percent.
Shares of the Cleveland-based producer of iron ore and metallurgical coal dropped 7.5 percent to $33.86 in after-market trading. The writedown was announced previously, but the dividend cut was a surprise.
The reduced payout was a sharp reversal from last March, when Cliffs more than doubled its payout and pledged to focus on boosting shareholder returns.
The business also felt the impact of a sharp drop in iron ore prices, which plunged to $86.70 a tonne, in September from more than $180 a tonne in September 2011.
That partly reflected on falling demand from China, the world's largest producer and consumer of steel. Benchmark 62-percent grade iron ore has since recovered to about $155 a tonne.
"In their Canadian operations, which is really their platform for future growth, it cost on a cash basis $117 a tonne and they sold each ton at $101," said Morningstar analyst Daniel Rohr. "So when your main growth area is turning in those kind of numbers, it's not so hot." Continued...