Algoma Steel Group Stock Earnings Reports

Algoma reported a quarter of resilient operations against weak steel markets while advancing its transformational electric arc furnace (EAF) conversion. Key financials: adjusted EBITDA was $4 million (0.6% margin) and operating cash flow was $25.4 million; cash on hand was $452 million with total liquidity of about $800 million. Revenue and realized steel prices declined year-over-year (revenue down 19%, net realization $1,036/ton, down ~14.6%) and shipments were modestly lower, but production and market share held up and plate shipments rose sequentially.

The EAF project is at peak construction with ~500 contractors on site, critical infrastructure energized, cumulative spend of $672 million, and committed contracts of approximately $870 million (over 90% fixed-price). Management remains on track to begin commissioning by the end of this calendar year and produce first steel by end of calendar Q1, and expects to finish the project within ~5% of the most recent budget guidance. When both furnaces are operational, steady-state shipping capacity is expected to reach ~3 million tons/year (approx. +35% vs current).

Balance sheet and project de‑risking: most remaining EAF work is contracted and management says the company is well funded to complete the project. Algoma is eligible for Ontario’s Emissions Performance Program and expects reimbursements of carbon taxes paid since 2022, lowering the net cash cost of the project. Insurance receipts related to a January utility corridor outage included an advance of ~C$32M recognized in the quarter; management expects further recoveries and indicated >50% recovery of property damage (total loss ~C$120–130M).

Working capital: management reiterated plans to reduce working capital, targeting at least C$100M of working capital release by March 2025 (with additional reductions expected as the blast furnace/coke operations are shut down during the transition to EAF).

Outlook and risks: near‑term pricing and demand remain weak (index prices hit year-to-date lows), with potential upside after the U.S. election and from Canadian tariffs on unfairly traded imports. Management continues to focus on safety, consistent plant operation, customer service, and executing the EAF completion and commissioning.