Algoma Steel Group achieved record plate sales during the three months ended March 31, 2026.<\/p>\n
But the Sault steelmaker is still hemorrhaging cash, posting a first-quarter net loss of\u00a0$159.4 million, compared to $24.5 million during the same quarter last year.\u00a0<\/p>\n
Direct tariff costs were\u00a0of $27.4 million, compared to $10.5 million in the prior-year quarter.<\/p>\n
“Algoma is focusing its commercial strategy on the manufacturing and sale of discrete plate while scaling back coil production to align with domestic market conditions,” the company said in a news release issued after financial markets closed tonight.\u00a0<\/p>\n
“As Canada\u2019s only producer of discrete plate, the company holds a unique competitive position in this segment. Plate demand from infrastructure, construction, and defence end-markets remained healthy during the quarter, and the company expects plate production to increase sequentially as the electric arc furnace (EAF) ramp-up continues through 2026,” the release said.<\/p>\n
\u201cThe first quarter of 2026 represented a genuine turning point for Algoma,” added Rajat Marwah, Algoma’s chief executive officer.<\/p>\n
“We permanently closed our blast furnace on Jan.\u00a018, bringing 125 years of coal-based steelmaking to an end and completing what we set out to do: transform this company into a modern, low-carbon steel producer.<\/p>\n
“That transition was not without cost in the quarter, as shipment volumes were lower and transition costs remained elevated while we ramped up our new steelmaking platform.<\/p>\n
“But the direction is clear and the trajectory is improving. Our\u00a0 EAF is running 24 hours a day, our plate mill is producing Volta\u2122 low-carbon steel at scale, and we are leaning into our competitive advantage as Canada\u2019s only producer of discrete plate,’ Marwah said.<\/p>\n
\u201cBeyond the operational progress, we are building something that matters to Canada. We want to recognize the Canadian government for its steadfast support of this transition, from the federal and provincial investment that helped make our EAF a reality, to the prioritization of Canadian-made steel in defence and procurement, to the resolve shown in responding to unfair trade practices and U.S. Section 232 tariffs.<\/p>\n
“That partnership has been instrumental in positioning Algoma where we are today. The formation of Roshel Algoma Defence extends our reach into sovereign ballistic steel production, and our Hanwha Ocean memorandum of agreement\u00a0represents a potential pathway into Canada\u2019s defence and shipbuilding supply chain at scale.<\/p>\n
“These are not speculative opportunities; they reflect the logical extension of what Algoma, with its modernized EAF platform and unique plate capabilities, is positioned to deliver. We believe that we have the liquidity, operational foundation, and strategic direction to create long-term value for our stakeholders,\u201d Marwah said.<\/p>\n
Other fiscal factoids released by the company tonight:<\/p>\n
\n\tconsolidated revenue of $296.9 million, compared to $517.1 million in the prior-year quarter
\n\tconsolidated loss from operations of $153.5 million, compared to a loss from operations of $139.9 million in the prior-year quarter
\n\tadjusted EBITDA\u00a0(Earnings Before Interest, Taxes, Depreciation, and Amortization) loss of $28.7 million inclusive of a $90.2 million capacity utilization adjustment and adjusted EBITDA margin of (9.7 per cent), compared to an adjusted EBITDA loss of $46.7 million and adjusted EBITDA margin of (9.0%) in the prior-year quarter
\n\tcash used in operating activities of $12.2 million, compared to cash generated by operating activities of $92.1 million in\u00a0the prior-year quarter
\n\tshipments of 223,681 tons, compared to shipments of 469,731 tons in the prior-year quarter, reflecting the transition to EAF-only steelmaking and the deliberate pivot toward the Canadian plate market
<\/p>\n
“We expect incremental improvement in the quarters ahead as we ramp up EAF Unit 1 and commission and ramp up EAF Unit 2,” said Michael Moraca, Algoma’s chief financial officer.<\/p>\n
“We ended the quarter with approximately $553 million in total available liquidity, and with capital expenditures down significantly from the peak of the EAF construction phase, we are increasingly positioned to focus our financial resources on strategic opportunities that support long-term growth and value creation,\u201d Moraca said.<\/p>\n
The company attributed the increase of $153.5 million loss from operations as primarily due to lower steel shipments, elevated tariff costs\u00a0and a capacity utilization charge of $90.2 million resulting from the accelerated transition to EAF steelmaking and lower production volumes.<\/p>\n
“This was partially offset by improved product mix and lower administrative and selling expenses,” the company news release\u00a0said.<\/p>\n
As for the increase in net loss, it added: “The increase reflects the factors noted above for operating loss, as well as the absence of $50.0 million in insurance proceeds that benefited Q1 2025, a decrease in income tax recovery of $26.4 million, and changes in fair value of warrant and share-based compensation liabilities. These were partially offset by an increase in foreign exchange gain of $15.2 million.”<\/p>\n
“The first quarter of 2026 was the first full quarter in which all liquid steel production was sourced entirely from the company\u2019s EAF facility.<\/p>\n
“Ramp-up activities are progressing in line with expectations. The Unit 1\u00a0EAF furnace and associated melt shop assets are performing as designed, with quality metrics achieved across a range of plate and hot-rolled coil product grades.<\/p>\n
“The Q-One power system and other key process components have demonstrated stable and reliable performance, supporting consistent metallurgical quality and process control.<\/p>\n
“Operations are currently running on a full 24-hour-per-day schedule. Construction activities on the second EAF unit are nearing completion with steel production expected in the third quarter of 2026,” the company said.<\/p>\n
During the first quarter, Algoma’s shipments to the United States represented 28 per cent\u00a0of its total steel volumes.<\/p>\n
That compared to a historical range of approximately 45 to 55 per cent.<\/p>\n
As of 12 days ago, Algoma had cash of $65.3 million, with available liquidity of about $553 million.<\/p>\n","protected":false},"excerpt":{"rendered":"Algoma Steel Group achieved record plate sales during the three months ended March 31, 2026. But the Sault…\n","protected":false},"author":2,"featured_media":665563,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[45,49,48,245600],"class_list":["post-665562","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-business","tag-ca","tag-canada","tag-rajat-marwahalgoma-steel-inc"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/665562","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=665562"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/665562\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/665563"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=665562"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=665562"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=665562"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}