Algoma Steel Group Inc. Reports Financial Results for the Second Quarter 2025
Algoma Steel (NASDAQ: ASTL) reported challenging Q2 2025 financial results, with consolidated revenue declining to $589.7 million from $650.5 million year-over-year. The company posted a net loss of $110.6 million, compared to net income of $6.1 million in Q2 2024, and an Adjusted EBITDA loss of $32.4 million.
Key challenges included U.S. tariffs of 50% under Section 232, resulting in $64.1 million in tariff costs and significant market disruption. Steel shipments decreased to 472,056 tons from 503,152 tons year-over-year. In response to market conditions, the company has suspended its quarterly dividend.
Despite challenges, Algoma achieved a significant milestone with first steel production from its new Electric Arc Furnace (EAF) in early July, marking progress in its transformation to become one of North America's lowest-cost green steel producers. The EAF project, with $881 million invested to date, is expected to reduce carbon emissions by 70%.
Algoma Steel (NASDAQ: ASTL) ha riportato risultati finanziari difficili nel secondo trimestre 2025, con un fatturato consolidato in calo a 589,7 milioni di dollari rispetto ai 650,5 milioni dell'anno precedente. L'azienda ha registrato una perdita netta di 110,6 milioni di dollari, rispetto a un utile netto di 6,1 milioni nel secondo trimestre 2024, e una perdita di EBITDA rettificato di 32,4 milioni.
Le principali difficoltà sono state causate dai dazi statunitensi del 50% ai sensi della Sezione 232, che hanno comportato costi per dazi pari a 64,1 milioni di dollari e una significativa interruzione del mercato. Le spedizioni di acciaio sono diminuite a 472.056 tonnellate rispetto a 503.152 tonnellate dell'anno precedente. In risposta alle condizioni di mercato, l’azienda ha sospeso il dividendo trimestrale.
Nonostante le difficoltà, Algoma ha raggiunto un importante traguardo con la prima produzione di acciaio dal nuovo Forno ad Arco Elettrico (EAF) all’inizio di luglio, segnando un progresso nella trasformazione per diventare uno dei produttori di acciaio verde a basso costo in Nord America. Il progetto EAF, con un investimento fino ad oggi di 881 milioni di dollari, dovrebbe ridurre le emissioni di carbonio del 70%.
Algoma Steel (NASDAQ: ASTL) reportó resultados financieros desafiantes en el segundo trimestre de 2025, con ingresos consolidados que cayeron a 589,7 millones de dólares desde 650,5 millones año tras año. La compañía registró una pérdida neta de 110,6 millones de dólares, en comparación con una ganancia neta de 6,1 millones en el segundo trimestre de 2024, y una pérdida de EBITDA ajustado de 32,4 millones.
Los principales retos incluyeron aranceles estadounidenses del 50% bajo la Sección 232, resultando en costos por aranceles de 64,1 millones y una significativa disrupción en el mercado. Los envíos de acero disminuyeron a 472,056 toneladas desde 503,152 toneladas año tras año. En respuesta a las condiciones del mercado, la empresa ha suspendido su dividendo trimestral.
A pesar de los desafíos, Algoma logró un hito importante con la primera producción de acero de su nuevo Horno de Arco Eléctrico (EAF) a principios de julio, marcando un avance en su transformación para convertirse en uno de los productores de acero verde de menor costo en Norteamérica. El proyecto EAF, con una inversión hasta la fecha de 881 millones de dólares, se espera que reduzca las emisiones de carbono en un 70%.
Algoma Steel (NASDAQ: ASTL)는 2025년 2분기 어려운 재무 실적을 발표했으며, 통합 매출은 전년 동기 대비 5억 8,970만 달러로 감소했습니다(이전 6억 5,050만 달러). 회사는 1억 1,060만 달러의 순손실을 기록했으며, 2024년 2분기의 610만 달러 순이익과 비교됩니다. 조정 EBITDA 손실은 3,240만 달러였습니다.
주요 어려움으로는 미국 섹션 232에 따른 50% 관세가 있었으며, 이로 인해 6,410만 달러의 관세 비용과 시장 혼란이 발생했습니다. 철강 출하량은 전년 대비 472,056톤으로 감소했습니다(이전 503,152톤). 시장 상황에 대응하여 회사는 분기 배당금을 중단했습니다.
어려움에도 불구하고 Algoma는 7월 초에 새로운 전기로(EAF)에서의 첫 철강 생산이라는 중요한 이정표를 달성했으며, 이는 북미에서 가장 저비용 친환경 철강 생산업체 중 하나가 되기 위한 전환의 진전을 의미합니다. 지금까지 8억 8,100만 달러가 투자된 EAF 프로젝트는 탄소 배출량을 70% 줄일 것으로 예상됩니다.
Algoma Steel (NASDAQ : ASTL) a publié des résultats financiers difficiles pour le deuxième trimestre 2025, avec un chiffre d'affaires consolidé en baisse à 589,7 millions de dollars contre 650,5 millions un an plus tôt. La société a enregistré une perte nette de 110,6 millions de dollars, contre un bénéfice net de 6,1 millions au deuxième trimestre 2024, ainsi qu'une perte d'EBITDA ajusté de 32,4 millions.
Les principaux défis comprenaient des droits de douane américains de 50 % en vertu de la Section 232, entraînant des coûts de droits de 64,1 millions de dollars et une perturbation importante du marché. Les expéditions d'acier ont diminué à 472 056 tonnes contre 503 152 tonnes d'une année sur l'autre. En réponse aux conditions du marché, la société a suspendu son dividende trimestriel.
Malgré ces défis, Algoma a atteint une étape importante avec la première production d'acier de son nouveau four à arc électrique (EAF) début juillet, marquant des progrès dans sa transformation pour devenir l'un des producteurs d'acier vert les plus compétitifs en Amérique du Nord. Le projet EAF, dans lequel 881 millions de dollars ont été investis à ce jour, devrait réduire les émissions de carbone de 70 %.
Algoma Steel (NASDAQ: ASTL) meldete herausfordernde Finanzergebnisse für das zweite Quartal 2025, mit einem konsolidierten Umsatzrückgang auf 589,7 Millionen US-Dollar gegenüber 650,5 Millionen US-Dollar im Vorjahreszeitraum. Das Unternehmen verzeichnete einen Nettoverlust von 110,6 Millionen US-Dollar im Vergleich zu einem Nettogewinn von 6,1 Millionen US-Dollar im zweiten Quartal 2024 sowie einen bereinigten EBITDA-Verlust von 32,4 Millionen US-Dollar.
Zu den Hauptproblemen gehörten US-Zölle von 50 % gemäß Abschnitt 232, die zu Zollkosten von 64,1 Millionen US-Dollar und erheblichen Marktstörungen führten. Die Stahllieferungen sanken von 503.152 Tonnen auf 472.056 Tonnen im Jahresvergleich. Als Reaktion auf die Marktlage hat das Unternehmen die vierteljährliche Dividende ausgesetzt.
Trotz der Herausforderungen erreichte Algoma einen bedeutenden Meilenstein mit der ersten Stahlproduktion aus seinem neuen Lichtbogenofen (EAF) Anfang Juli, was Fortschritte bei der Transformation hin zu einem der kostengünstigsten grünen Stahlproduzenten Nordamerikas markiert. Das EAF-Projekt, in das bisher 881 Millionen US-Dollar investiert wurden, soll die CO2-Emissionen um 70 % reduzieren.
- Successfully achieved first arc and steel production from new EAF facility in July 2025
- EAF transformation expected to reduce carbon emissions by 70%
- Maintained strong liquidity with $82.5 million cash and $329.1 million available credit
- EAF project to provide structural cost advantage and increase production capacity to 3.7 million tons
- Net loss of $110.6 million compared to $6.1 million profit in prior-year quarter
- Revenue declined 9.3% to $589.7 million year-over-year
- Incurred $64.1 million in tariff costs due to 50% Section 232 tariffs
- Suspended quarterly dividend due to market uncertainty
- Steel shipments decreased 6.2% to 472,056 tons year-over-year
Insights
Algoma posts significant Q2 losses amid tariff pressures while achieving crucial EAF milestone that could transform cost structure.
Algoma Steel's Q2 2025 results paint a concerning financial picture with a
Three critical factors are driving this deterioration: First, the Section 232 tariffs that escalated to
The tariff situation has forced management to suspend their quarterly dividend of approximately
Despite these headwinds, the company reached a transformative milestone in early July with the first steel production from their new Electric Arc Furnace. This
Consolidated Revenue of
Net Loss of
Achieved First Arc and First Steel Production from Transformative Electric Arc Furnace (EAF) Project
SAULT STE. MARIE, Ontario, July 29, 2025 (GLOBE NEWSWIRE) -- Algoma Steel Group Inc. (NASDAQ: ASTL; TSX: ASTL) (“Algoma” or “the Company”), a leading Canadian producer of hot and cold rolled steel sheet and plate products, today announced results for its second quarter ended June 30, 2025.
Unless otherwise specified, all amounts are in Canadian dollars.
Business Highlights and Second Quarter 2025 to Second Quarter 2024 Comparisons
- Consolidated revenue of
$589.7 million , compared to$650.5 million in the prior-year quarter. - Consolidated loss from operations of
$85.1 million , compared to a loss from operations of$12.5 million in the prior-year quarter. - Net loss of
$110.6 million , compared to net income of$6.1 million in the prior-year quarter. - Adjusted EBITDA loss of
$32.4 million and Adjusted EBITDA margin of (5.5% ), compared to Adjusted EBITDA of$37.7 million and5.8% in the prior-year quarter (see “Non-GAAP Measures” below). - Cash used in operating activities of
$37.9 million , compared to cash generated by operating activities of$12.5 million in the prior-year quarter. - Shipments of 472,056 tons, compared to 503,152 tons in the prior-year quarter.
- Tariffs paid in the quarter totaled
$64.1M vs nil in the prior-year quarter.
Michael Garcia, the Company's Chief Executive Officer, commented, “The second quarter of 2025 was a pivotal period for Algoma, during which we completed the preparations for our first production of Volta™—Algoma’s trademarked green steel. This milestone was realized in early July with the successful production of our inaugural steel in the first of our two state-of-the-art EAFs. While we delivered operational results for the quarter that were in line with our expectations, our financial performance continued to be impacted by ongoing tariff uncertainty and persistent weak steel market demand and pricing pressures. The uncertain market environment has created headwinds for shipments and pricing across the industry, but we remain focused on executing our strategic transformation.”
Mr. Garcia continued, “Achieving first arc and producing our first steel from the EAF in early July represents a historic accomplishment that marks the true beginning of our transition from a legacy higher-cost traditional steelmaker to one of the lowest-cost green steel producers in North America. While we can’t control market volatility and macro or geopolitical uncertainties, we are focused on what we can control: the safe operation of our assets and the completion of the EAF project, which provides us with a structural cost advantage that will serve us well through market cycles, creating lasting value for all stakeholders.”
Second Quarter 2025 Financial Results
Second quarter revenue totaled
Loss from operations was
Net loss in the second quarter was
Adjusted EBITDA in the second quarter was a loss of
See “Non-GAAP Measures” below for an explanation of Adjusted EBITDA and Adjusted EBITDA margin and a reconciliation of net (loss) income to Adjusted EBITDA.
Electric Arc Furnace
In November 2021, the Company’s Board of Directors (the “Board”) authorized the Company to construct two new state of the art EAFs to replace the Company’s existing blast furnace and basic oxygen steelmaking operations. Record days of snowfall at the site in late November and early December 2024 impacted project work, but due to the hard work of the entire team to mitigate these impacts, the Company achieved first arc and first steel production in early July.
As of June 30, 2025, the cumulative investment was
Following the transformation to EAF steelmaking, Algoma’s facility is anticipated to have an annual raw steel production capacity of approximately 3.7 million tons, matching its downstream finishing capacity, which is expected to reduce the Company’s annual carbon emissions by approximately
Tariffs
On March 4, 2025, the United States imposed tariffs on Canadian imports, including a
While Canada remains exempt from the Reciprocal Tariff and overlapping duties do not apply to USMCA-compliant goods, the Company is currently subject to the
Tariff-related costs totaled
Liquidity
At quarter end, the Company had cash of
Quarterly Dividend
In light of ongoing macroeconomic uncertainty, including increased volatility in steel markets and uncertainty surrounding trade policy and tariffs, the Board of Directors has decided to suspend the regular quarterly dividend on the Company’s common shares, totaling approximately US
Conference Call and Webcast Details
A webcast and conference call will be held on Wednesday, July 30, 2025 at 11:00 a.m. EDT to review the Company’s results for the three months ended June 30, 2025, discuss recent events, and conduct a question-and-answer session.
The live webcast and archived replay of the conference call can be accessed on the Investors section of the Company’s website at www.ir.algoma.com. For those unable to access the webcast, the conference call will be accessible domestically or internationally by dialing 877-425-9470 or 201-389-0878, respectively. Upon dialing in, please request to join the Algoma Steel Second Quarter Conference Call. To access the replay of the call, dial 844-512-2921 (domestic) or 412-317-6671 (international) with passcode 13754580.
Consolidated Financial Statements and Management's Discussion and Analysis
The Company's unaudited condensed interim financial statements for the three and six month periods ended June 30, 2025 and 2024 and Management's Discussion & Analysis thereon are available under the Company’s profile on the U.S. Securities and Exchange Commission’s (“SEC”) EDGAR website at www.sec.gov and under the Company's profile on SEDAR+ at www.sedarplus.com. These documents are also available on the Company’s website, www.algoma.com, and shareholders may receive hard copies of such documents free of charge upon request by contacting IR@algoma.com.
Cautionary Statement Regarding Forward-Looking Statements
This news release contains “forward-looking information” under applicable Canadian securities legislation and “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 (collectively, “forward-looking statements”), including statements regarding imposed and threatened tariffs, including the impact, timing and resolution thereof, trends in the pricing of steel, Algoma’s transition to EAF steelmaking, including the progress, costs and timing of completion of the Company’s EAF project, the Company’s expected annual raw steel production capacity and reduction in carbon emissions following completion of the EAF project, Algoma’s future as a leading producer of green steel, the potential impacts of inflationary pressures, the Company’s ability to access liquidity tools and funding programs, such as the LETL, labor availability, global supply chain disruptions on costs, Algoma’s modernization of its plate mill facilities (including annual plate capacity going forward), transformation journey, ability to deliver greater and long-term value, ability to offer North America a secure steel supply and a sustainable future, and investment in its people, and processes, and statements regarding potential borrowings under the Company’s credit facilities, and the Company’s strategy, plans or future financial or operating performance. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “hope,” “strategy,” “future,” “opportunity,” “plan,” “design,” “pipeline,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions. Many factors could cause actual future events to differ materially from the forward-looking statements in this document. Readers should also consider the other risks and uncertainties set forth in the section entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Information” in Algoma’s Annual Information Form, filed by Algoma with applicable Canadian securities regulatory authorities (available under the Company’s SEDAR+ profile at www.sedarplus.com) and with the SEC, as part of Algoma’s Annual Report on Form 40-F (available at www.sec.gov), as well as in Algoma’s current reports with the Canadian securities regulatory authorities and SEC. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Algoma assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.
Non-GAAP Financial Measures
To supplement our financial statements, which are prepared in accordance with IFRS® Accounting Standards as issued by the International Accounting Standards Board (“IASB”) (“IFRS Accounting Standards”), we use certain non-GAAP measures to evaluate the performance of Algoma. These terms do not have any standardized meaning prescribed within IFRS Accounting Standards and, therefore, may not be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS Accounting Standards measures by providing a further understanding of our financial performance from management’s perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS Accounting Standards.
Adjusted EBITDA, as we define it, refers to net income (loss) before amortization of property, plant, equipment and amortization of intangible assets, finance costs, interest on pension and other post-employment benefit obligations, income taxes, foreign exchange loss (gain), finance income, carbon tax, changes in fair value of warrant, earnout and share-based compensation liabilities, share-based compensation related to the Company’s Omnibus Long Term Incentive Plan, certain inventory write-downs and legal settlement. Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by revenue for the corresponding period. Adjusted EBITDA is not intended to represent cash flow from operations, as defined by IFRS Accounting Standards, and should not be considered as alternatives to net profit (loss) from operations, or any other measure of performance prescribed by IFRS Accounting Standards. Adjusted EBITDA, as we define and use it, may not be comparable to Adjusted EBITDA as defined and used by other companies. We consider Adjusted EBITDA to be a meaningful measure to assess our operating performance in addition to IFRS Accounting Standards. It is included because we believe it can be useful in measuring our operating performance and our ability to expand our business and provide management and investors with additional information for comparison of our operating results across different time periods and to the operating results of other companies. Adjusted EBITDA is also used by analysts and our lenders as a measure of our financial performance. In addition, we consider Adjusted EBITDA margin to be a useful measure of our operating performance and profitability across different time periods that enhance the comparability of our results. However, these measures have limitations as analytical tools and should not be considered in isolation from, or as alternatives to, net income, cash flow from operations or other data prepared in accordance with IFRS Accounting Standards. Because of these limitations, such measures should not be considered as measures of discretionary cash available to invest in business growth or to reduce indebtedness. We compensate for these limitations by relying primarily on our IFRS Accounting Standards results using such measures only as supplements to such results. See the financial tables below for a reconciliation of net income (loss) to Adjusted EBITDA.
About Algoma Steel Group Inc.
Based in Sault Ste. Marie, Ontario, Canada, Algoma is a fully integrated producer of hot and cold rolled steel products including sheet and plate. Driven by a purpose to build better lives and a greener future, Algoma is positioned to deliver responsive, customer-driven product solutions to applications in the automotive, construction, energy, defense, and manufacturing sectors. Algoma is a key supplier of steel products to customers in North America and is the only producer of discrete plate products in Canada. Its state-of-the-art Direct Strip Production Complex (“DSPC”) is one of the lowest-cost producers of hot rolled sheet steel (HRC) in North America.
Algoma is on a transformation journey, modernizing its plate mill and adopting electric arc technology that builds on the strong principles of recycling and environmental stewardship to significantly lower carbon emissions. Today Algoma is investing in its people and processes, working safely, as a team to become one of North America's leading producers of green steel.
As a founding industry in their community, Algoma is drawing on the best of its rich steelmaking tradition to deliver greater value, offering North America the comfort of a secure steel supply and a sustainable future.
| Algoma Steel Group Inc. Condensed Interim Consolidated Statements of Financial Position (Unaudited) | |||||||
| As at, | June 30, 2025 | December 31, 2024 | |||||
| expressed in millions of Canadian dollars | |||||||
| Assets | |||||||
| Current | |||||||
| Cash | $ | 82.5 | $ | 266.9 | |||
| Restricted cash | 0.1 | 0.1 | |||||
| Taxes receivable | 116.0 | 84.3 | |||||
| Accounts receivable, net | 253.6 | 227.6 | |||||
| Inventories | 736.3 | 879.2 | |||||
| Prepaid expenses and deposits | 30.3 | 42.8 | |||||
| Other assets | 5.0 | 5.5 | |||||
| Total current assets | $ | 1,223.8 | $ | 1,506.4 | |||
| Non-current | |||||||
| Property, plant and equipment, net | $ | 1,705.8 | $ | 1,662.7 | |||
| Intangible assets, net | 0.4 | 0.5 | |||||
| Other assets | 15.6 | 16.6 | |||||
| Total non-current assets | $ | 1,721.8 | $ | 1,679.8 | |||
| Total assets | $ | 2,945.6 | $ | 3,186.2 | |||
| Liabilities and Shareholders' Equity | |||||||
| Current | |||||||
| Bank indebtedness | $ | 16.4 | $ | 0.4 | |||
| Accounts payable and accrued liabilities | 348.4 | 319.1 | |||||
| Taxes payable and accrued taxes | 54.5 | 41.6 | |||||
| Current portion of other long-term liabilities | 3.5 | 3.2 | |||||
| Current portion of governmental loans | 25.0 | 25.0 | |||||
| Current portion of environmental liabilities | 3.7 | 4.2 | |||||
| Warrant liability | 16.8 | 52.2 | |||||
| Earnout liability | 6.2 | 10.1 | |||||
| Share-based payment compensation liability | 23.4 | 34.5 | |||||
| Total current liabilities | $ | 497.9 | $ | 490.3 | |||
| Non-current | |||||||
| Senior secured lien notes | $ | 473.5 | $ | 498.4 | |||
| Long-term governmental loans | 133.1 | 133.6 | |||||
| Accrued pension liability | 178.3 | 178.3 | |||||
| Accrued other post-employment benefit obligation | 203.5 | 206.2 | |||||
| Other long-term liabilities | 26.9 | 26.7 | |||||
| Environmental liabilities | 35.5 | 33.3 | |||||
| Deferred income tax liabilities | 103.8 | 110.9 | |||||
| Total non-current liabilities | $ | 1,154.6 | $ | 1,187.4 | |||
| Total liabilities | $ | 1,652.5 | $ | 1,677.7 | |||
| Shareholders' equity | |||||||
| Capital stock | $ | 975.5 | $ | 974.8 | |||
| Accumulated other comprehensive income | 366.5 | 439.6 | |||||
| (Deficit) retained earnings | (48.1 | ) | 102.0 | ||||
| Contributed deficit | (0.8 | ) | (7.9 | ) | |||
| Total shareholders' equity | $ | 1,293.1 | $ | 1,508.5 | |||
| Total liabilities and shareholders' equity | $ | 2,945.6 | $ | 3,186.2 | |||
| Algoma Steel Group Inc. Condensed Interim Consolidated Statements of Net (Loss) Income (Unaudited) | |||||||||||||||
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||
| expressed in millions of Canadian dollars, except for per share amounts | |||||||||||||||
| Revenue | $589.7 | $1,106.8 | |||||||||||||
| Operating expenses | |||||||||||||||
| Cost of sales | $643.8 | $1,269.9 | |||||||||||||
| Administrative and selling expenses | 31.0 | 29.2 | 61.9 | 61.3 | |||||||||||
| Loss from operations | ($85.1 | ) | ( | ) | ($225.0 | ) | ( | ) | |||||||
| Other (income) and expenses | |||||||||||||||
| Finance income | ($2.5 | ) | ( | ) | ($5.3 | ) | ( | ) | |||||||
| Finance costs | 18.5 | 16.4 | 36.3 | 26.1 | |||||||||||
| Interest on pension and other post-employment benefit obligations | 3.9 | 5.4 | 7.9 | 10.3 | |||||||||||
| Foreign exchange loss (gain) | 31.5 | (6.8 | ) | 32.4 | (22.6 | ) | |||||||||
| Other income | - | - | (50.0 | ) | - | ||||||||||
| Change in fair value of warrant liability | 4.6 | (15.6 | ) | (34.5 | ) | (30.9 | ) | ||||||||
| Change in fair value of earnout liability | 1.3 | (2.5 | ) | (3.1 | ) | (5.9 | ) | ||||||||
| Change in fair value of share-based compensation liability | 5.1 | (5.8 | ) | (10.3 | ) | (10.6 | ) | ||||||||
| $62.4 | ( | ) | ($26.6 | ) | ( | ) | |||||||||
| (Loss) income before income taxes | ($147.5 | ) | ($198.4 | ) | |||||||||||
| Income tax recovery | (36.9 | ) | (4.3 | ) | (63.3 | ) | (3.3 | ) | |||||||
| Net (loss) income | ($110.6 | ) | ($135.1 | ) | |||||||||||
| Net (loss) income per common share | |||||||||||||||
| Basic | ($1.02 | ) | ($1.24 | ) | |||||||||||
| Diluted | ($1.02 | ) | ( | ) | ($1.28 | ) | |||||||||
| Algoma Steel Group Inc. Condensed Interim Consolidated Statements of Cash Flows (Unaudited) | |||||||||||||||
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||
| expressed in millions of Canadian dollars | |||||||||||||||
| Operating activities | |||||||||||||||
| Net (loss) income | ($110.6 | ) | ($135.1 | ) | |||||||||||
| Items not affecting cash: | |||||||||||||||
| Depreciation of property, plant and equipment and intangible assets | 38.2 | 33.2 | 73.2 | 68.0 | |||||||||||
| Deferred income tax expense (recovery) | 0.5 | (5.3 | ) | (1.5 | ) | (10.5 | ) | ||||||||
| Pension funding in excess of expense | (3.3 | ) | (1.9 | ) | (5.1 | ) | (3.1 | ) | |||||||
| Post-employment benefit funding in excess of expense | (1.7 | ) | (1.7 | ) | (3.4 | ) | (3.8 | ) | |||||||
| Unrealized foreign exchange loss (gain) on: | |||||||||||||||
| accrued pension liability | 9.1 | (2.4 | ) | 9.3 | (8.1 | ) | |||||||||
| post-employment benefit obligations | 10.8 | (2.3 | ) | 11.0 | (8.1 | ) | |||||||||
| Finance costs | 18.5 | 16.4 | 36.3 | 26.1 | |||||||||||
| Loss on disposal of property, plant and equipment | - | 1.1 | - | 1.6 | |||||||||||
| Interest on pension and other post-employment benefit obligations | 3.9 | 5.4 | 7.9 | 10.3 | |||||||||||
| Other income | - | - | (50.0 | ) | - | ||||||||||
| Accretion of governmental loans and environmental liabilities | 5.1 | 3.9 | 9.1 | 11.7 | |||||||||||
| Unrealized foreign exchange loss (gain) on government loan facilities | 8.1 | (1.3 | ) | 8.3 | (4.7 | ) | |||||||||
| Increase (decrease) in fair value of warrant liability | 4.6 | (15.6 | ) | (34.5 | ) | (30.9 | ) | ||||||||
| Increase (decrease) in fair value of earnout liability | 1.3 | (2.5 | ) | (3.1 | ) | (5.9 | ) | ||||||||
| Increase (decrease) in fair value of share-based compensation liability | 5.1 | (5.8 | ) | (10.3 | ) | (10.6 | ) | ||||||||
| Other | 7.7 | 1.2 | 12.3 | 0.2 | |||||||||||
| ($2.7 | ) | ($75.6 | ) | ||||||||||||
| Net change in non-cash operating working capital | (70.1 | ) | (15.8 | ) | 95.3 | 68.3 | |||||||||
| Environmental liabilities paid | (0.1 | ) | (0.2 | ) | (0.5 | ) | (0.9 | ) | |||||||
| Insurance proceeds for operating expenses | 35.0 | - | 35.0 | - | |||||||||||
| Cash (used in) generated by operating activities | ($37.9 | ) | $54.2 | ||||||||||||
| Investing activities | |||||||||||||||
| Acquisition of property, plant and equipment | ($97.4 | ) | ( | ) | ($224.4 | ) | ( | ) | |||||||
| Insurance proceeds for property damage | 15.0 | - | 15.0 | - | |||||||||||
| Cash used in investing activities | ($82.4 | ) | ( | ) | ($209.4 | ) | ( | ) | |||||||
| Financing activities | |||||||||||||||
| Bank indebtedness advanced (repaid), net | $16.1 | $16.0 | ( | ) | |||||||||||
| Senior secured lien notes issued, net of underwriter fees | - | 472.6 | - | 472.6 | |||||||||||
| Transaction costs on senior secured lien notes | - | (4.1 | ) | - | (4.1 | ) | |||||||||
| Governmental loans received | 16.3 | 14.5 | 16.3 | 30.0 | |||||||||||
| Repayment of governmental loans | (6.2 | ) | (2.5 | ) | (12.5 | ) | (5.0 | ) | |||||||
| Interest paid | (23.4 | ) | (0.1 | ) | (24.5 | ) | (0.2 | ) | |||||||
| Dividends paid | (14.8 | ) | - | (14.8 | ) | (7.1 | ) | ||||||||
| Other | (0.7 | ) | (0.5 | ) | 1.5 | (0.9 | ) | ||||||||
| Cash (used in) generated by financing activities | ($12.7 | ) | ($18.0 | ) | |||||||||||
| Effect of exchange rate changes on cash | ($11.0 | ) | ($11.2 | ) | |||||||||||
| Cash | |||||||||||||||
| (Decrease) increase in cash | (144.0 | ) | 395.5 | (184.4 | ) | 398.7 | |||||||||
| Opening balance | 226.5 | 97.9 | 266.9 | 94.7 | |||||||||||
| Ending balance | $82.5 | $82.5 | |||||||||||||
| Algoma Steel Group Inc. Reconciliation of Net (Loss) Income to Adjusted EBITDA | |||||||||||||||
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||
| millions of dollars | 2025 | 2024 | 2025 | 2024 | |||||||||||
| Net (loss) income | ($110.6 | ) | ($135.1 | ) | |||||||||||
| Depreciation of property, plant and equipment and amortization of intangible assets | 38.2 | 33.2 | 73.2 | 68.0 | |||||||||||
| Finance costs | 18.5 | 16.4 | 36.3 | 26.1 | |||||||||||
| Interest on pension and other post-employment benefit obligations | 3.9 | 5.4 | 7.9 | 10.3 | |||||||||||
| Income tax recovery | (36.9 | ) | (4.3 | ) | (63.3 | ) | (3.3 | ) | |||||||
| Foreign exchange loss (gain) | 31.5 | (6.8 | ) | 32.4 | (22.6 | ) | |||||||||
| Finance income | (2.5 | ) | (5.4 | ) | (5.3 | ) | (6.6 | ) | |||||||
| Inventory adjustments (depreciation on property, plant and equipment in inventory) | 0.5 | 6.4 | 1.5 | 2.5 | |||||||||||
| Carbon tax | 10.4 | 9.5 | 13.9 | 15.9 | |||||||||||
| Increase (decrease) in fair value of warrant liability | 4.6 | (15.6 | ) | (34.5 | ) | (30.9 | ) | ||||||||
| Increase (decrease) in fair value of earnout liability | 1.3 | (2.5 | ) | (3.1 | ) | (5.9 | ) | ||||||||
| Increase (decrease) in fair value of share-based payment compensation liability | 5.1 | (5.8 | ) | (10.3 | ) | (10.6 | ) | ||||||||
| Share-based compensation | 3.6 | 1.1 | 7.4 | 2.3 | |||||||||||
| Adjusted EBITDA (i) | ($32.4 | ) | ($79.0 | ) | |||||||||||
| Net (loss) income Margin | (18.8 | %) | 0.9 | % | (12.2 | %) | 2.7 | % | |||||||
| Net (loss) income / ton | ($234.3 | ) | ($143.5 | ) | |||||||||||
| Adjusted EBITDA Margin (ii) | (5.5 | %) | 5.8 | % | (7.1 | %) | 6.2 | % | |||||||
| Adjusted EBITDA / ton | ($68.6 | ) | ($83.9 | ) | |||||||||||
| (i) See "Non-IFRS Financial Measures" in this Press Release for information regarding the limitations of using Adjusted EBITDA. | |||||||||||||||
| (ii) Adjusted EBITDA Margin is Adjusted EBITDA as a percentage of revenue. | |||||||||||||||
For more information, please contact: Michael Moraca Vice President – Corporate Development & Treasurer Algoma Steel Group Inc. Phone: 705.945.3300 E-mail: IR@algoma.com
FAQ
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