Hogtied by crippling U.S. tariffs, Algoma Steel Group Inc. today posted a net loss of $96 million during the three-month period that ended June 30.
That was nonetheless down from a net loss of $110.6 million in the same quarter last year.
“While the 50 per cent U.S. Section 232 tariffs continue to effectively foreclose our traditional access to the U.S. market, our pivot to a Canada-centric, plate-first strategy is working,” said Rajat Marwah, Algoma Steel’s chief executive officer.
“As Canada’s only producer of discrete plate, we are uniquely positioned to serve growing infrastructure, construction, and defence demand, and the recent rise in steel prices is encouraging,” Marwah said in a written statement issued after the close of the Wednesday financial markets.
“We are grateful for the continued support of the federal and provincial governments as we complete this transition and build a stronger, more sustainable Canadian steel industry.”
More fiscal highlights announced this evening:
consolidated revenue of $267.5 million, compared to $589.7 million in the prior-year quarter
consolidated loss from operations of $134.2 million, compared to a loss from operations of $85.1 million in the prior-year quarter
adjusted EBITDA of $13.8 million and adjusted EBITDA margin of 5.2 per cent inclusive of a $45-million final insurance settlement and a $54.7-million capacity utilization adjustment, compared to an adjusted EBITDA loss of $32.4 million and adjusted EBITDA margin of 5.5 per cent in the prior-year quarter
direct tariff costs of $18.7 million, compared to $64.1 million in the prior-year quarter
cash used in operating activities of $79.4 million, compared to $37.9 million in the prior-year quarter
shipments of 181,473 tons, compared to 472,056 tons in the prior-year quarter, reflecting the transition to electric arc furnace-only steelmaking and the continued pivot toward the Canadian plate market
“The second quarter demonstrated the resilience of our transformed business against a stubbornly challenging industry backdrop,” Marwah said.
“We delivered a second consecutive quarter of record plate sales, our first electric arc furnace (EAF) unit continued to ramp up as expected, and transition costs declined meaningfully from the first quarter.
“With commissioning activities commencing at the second EAF unit and first steel expected in the third quarter, we are entering the final phase of the most significant transformation in Algoma’s history.”
Michael Moraca, Algoma’s chief financial officer, said the quarter’s record sales of plate steel, represented a 20 per cent increase in average net sales realization per ton, compared to the same quarter last year.
“We ended the quarter with approximately $437 million in total available liquidity, and with capital expenditures well below peak EAF construction levels, we remain focused on disciplined cash management as we complete the ramp-up and position the business for improved profitability,” Moraca said.