Algoma Steel and Hanwha Ocean align to underpin Canada’s future submarine program with Canadian steelmaking capability and Canadian workers, supporting long-term naval readiness and industrial sovereigntyHanwha Ocean to provide Algoma with up to USD $250 million (approx. CAD $345 million) as support for advancing Algoma’s diversification strategy and domestic supply for Canadian defense procurement SAULT STE. MARIE, Ontario, Jan. 26, 2026 (GLOBE NEWSWIRE) -- Algoma Steel Group Inc. (NASDAQ: ASTL; TSX: ASTL) ...

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Core Insights - Algoma Steel Group Inc. (ASTL) has provided guidance for Q4 2025, expecting steel shipments of 375,000 to 380,000 tons and a negative adjusted EBITDA between C$95 million and C$105 million [1][7] Financial Performance - The company's results align with expectations, reflecting challenges from steel tariffs and the wind-down of blast furnace operations [2][7] - ASTL's stock has decreased by 48.8% over the past year, contrasting with the industry's growth of 45.2% [5] Operational Developments - The Electric Arc Furnace (EAF) project is operational six days a week, with the first unit running and the second unit on schedule [3][7] - The transition to EAF steelmaking is seen as a growth opportunity, with ongoing discussions to expand finishing capabilities [3] Industry Context - The EAF growth plan supports Canada's goal of enhancing domestic steelmaking capacity and reinforcing industrial competitiveness [3]

Core Insights - Algoma Steel Group Inc. provided guidance for its quarter ended December 31, 2025, indicating total steel shipments expected to be between 375,000 to 380,000 tons and Adjusted EBITDA anticipated to be in the range of negative $95 million to negative $105 million [2][3] Group 1: Financial Performance - Total steel shipments for the quarter are projected to be between 375,000 to 380,000 tons [2] - Adjusted EBITDA is expected to be between negative $95 million to negative $105 million [2] Group 2: Operational Developments - The fourth-quarter results reflect the ongoing impact of steel tariffs and the wind-down of blast furnace operations, which are expected to conclude shortly [3] - The first unit of the Electric Arc Furnace (EAF) project is now operating six days a week, with the second unit on schedule [3] - The transition to EAF steelmaking is aligned with Canada's national interest, aiming to strengthen domestic steelmaking capacity and support critical infrastructure [3] Group 3: Sustainability Initiatives - The transition to EAF steelmaking is one of the largest industrial decarbonization initiatives in North America, expected to reduce carbon emissions by approximately 70% once fully transitioned [5] - Algoma is introducing Volta™, a brand for all steel produced through EAF technology, which promises lower emissions while maintaining performance [6] - The company continues to invest in its people, processes, and technologies to enhance domestic supply chains and produce responsible Canadian-made steel [6]

Core Viewpoint - Algoma Steel Group Inc. has successfully completed a $500 million financing transaction with the Governments of Canada and Ontario to strengthen its balance sheet and support its transition to Electric Arc Furnace (EAF) technology [1][2][4]. Financing Details - The financing consists of $400 million from the Canada Enterprise Emergency Funding Corporation (CEEFC) and $100 million from the Province of Ontario, with specific secured tranches included [2]. - Algoma has issued 6.77 million common share purchase warrants to CEEFC and Ontario, each exercisable at an exercise price of $11.08 for a 10-year term [2]. Strategic Importance - The seven-year facilities enhance Algoma's financial flexibility as it advances its EAF transformation and seeks to diversify its business [3]. - The financing is seen as a reinforcement of the partnership between Algoma and the government, enabling the company to navigate current market conditions effectively [4]. Operational Focus - The company plans to draw from the secured tranche first to provide immediate liquidity for operations and near-term transformation milestones [4]. - Algoma aims to maintain operational efficiency and cash generation while focusing on its plate-first commercial strategy [4]. Environmental Commitment - The transition to EAF technology is part of one of North America's largest industrial decarbonization initiatives, expected to reduce carbon emissions by approximately 70% [8]. - Algoma is committed to producing steel sustainably, with its new brand Volta representing steel made through EAF technology with significantly lower emissions [9]. Company Overview - Algoma Steel Group Inc. is a leading Canadian producer of high-quality plate and sheet steel products, supporting critical sectors such as energy, defense, automotive, shipbuilding, and infrastructure [7]. - The company is focused on building a greener future and shaping sustainable steelmaking in Canada [7].

Core Viewpoint - Algoma Steel Group Inc. has successfully completed a $500 million financing transaction with the Governments of Canada and Ontario to support its Electric Arc Furnace (EAF) transformation and enhance financial flexibility [1][4]. Financing Details - The financing consists of $400 million from the Canada Enterprise Emergency Funding Corporation (CEEFC) and $100 million from the Province of Ontario, with specific secured tranches included [2]. - Algoma issued 6.77 million common share purchase warrants to CEEFC and Ontario, each exercisable for one common share at an exercise price of $11.08 for a 10-year term [2]. Strategic Importance - The seven-year facilities are designed to strengthen Algoma's balance sheet and provide financial flexibility as the company advances its EAF transformation and seeks to diversify its business [3]. - The financing is expected to support operational efficiency, cash generation, and the company's plate-first commercial strategy [4]. Environmental Commitment - Algoma's transition to EAF technology is part of one of North America's largest industrial decarbonization initiatives, aiming to reduce carbon emissions by approximately 70% once fully transitioned [8]. - The new brand Volta™ will represent all steel produced through Algoma's EAF technology, emphasizing lower emissions and sustainable production [9]. Industry Position - Algoma is positioned as a leading Canadian producer of high-quality plate and sheet steel products, supporting critical sectors such as energy, defense, automotive, shipbuilding, and infrastructure [6]. - The company is committed to building a greener future and strengthening domestic supply chains through its modernization efforts [7].

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q3 2025 was a loss of CAD 87.1 million, with tariffs expense totaling CAD 90 million, leading to a revenue decline of approximately CAD 32 million due to Canadian sales prices being about 40% lower because of tariffs [14][15] - Net loss for the quarter was CAD 485.1 million, compared to a net loss of CAD 106.6 million in the prior year quarter, primarily driven by a CAD 503 million non-cash impairment loss [17][18] - Cash used in operating activities was CAD 117.3 million, with liquidity at CAD 337 million at the end of the quarter [15][19] Business Line Data and Key Metrics Changes - Plate shipments totaled approximately 97,000 tons, consistent with the previous quarter's 103,000 tons, despite a planned two-week outage [8] - Net sales realization averaged CAD 1,129 per tonne, up from CAD 1,036 per tonne in the prior year, reflecting an improved value-added product mix [16] - Cost per ton of steel products sold averaged CAD 1,282, up 24.2% year-over-year [16] Market Data and Key Metrics Changes - The company shipped 419,000 net tons in the quarter, a decline of 12.7% compared to the prior year, attributed to weakening market conditions and the impact of Section 232 tariffs [15][16] - The Canadian market for plate is currently around 600,000 to 700,000 tons, with the company capturing about 50% of that market [52] Company Strategy and Development Direction - The company is pivoting to focus on domestic markets and high-value steel products, particularly plate and specialty products, to reduce exposure to volatile markets [10][11] - The strategic transition to electric arc furnace (EAF) production is being accelerated, with a goal to complete the ramp-up by early 2027 [27][29] - The company aims to position itself as a premium Canadian supplier of essential steel products, aligning with national industrial priorities [11][21] Management's Comments on Operating Environment and Future Outlook - Management highlighted the significant disruption in the steel industry due to U.S. tariffs, which have closed the U.S. market to Canadian producers [7] - The company expects a significant inventory drawdown beginning in Q4 2025 as it transitions to a more efficient EAF-based supply chain [19] - Management expressed confidence in emerging stronger from current challenges, with a focus on operational stability and investment in high-quality products [22] Other Important Information - The company secured CAD 500 million in government liquidity support and expanded its ABL credit facility to CAD 375 million, enhancing financial flexibility [19][20] - The CEO announced retirement at the end of the year, with Rajat Marwah appointed as the new CEO effective January 1, 2026 [12][13] Q&A Session Summary Question: Production profile and EBITDA break-even in a 50% tariff environment - Management indicated a need to accelerate the transition to full EAF production to adapt to current market conditions, aiming for a break-even point post-transition [27][29] Question: Plate production decline and future expectations - Management noted that the decline was due to maintenance days and expected production to rise in Q4 or Q1 next year [31] Question: Expected capital infusions from insurance and government grants - The company anticipates receiving CAD 30 million to CAD 50 million from insurance claims and a significant working capital release of CAD 100 million to CAD 150 million over the next year [32][34] Question: Updated CapEx and net working capital expectations - Management expects a release in working capital in Q4, with a reduction in CapEx as the blast furnace operations shut down [41] Question: Cost targets for the new furnace and market support - The company expects initial costs to be slightly higher due to lower capacity but anticipates achieving target costs as production ramps up [43][44] Question: Positive implications from Canadian trade barriers - Management noted increased interest in Algoma's capabilities and suggested that more government action could strengthen the Canadian market [50][51]

Financial Performance - Q3 2025 shipping volume was 419K NT, a decrease of 19% compared to 520K NT in Q3 2024 and a decrease of 11% compared to 472K NT in Q2 2025[21] - Steel revenue in Q3 2025 was $473 million, down 12% from $539 million in Q3 2024 and down 11% from $534 million in Q2 2025[21] - Adjusted EBITDA for Q3 2025 was $(87) million, a decrease of $91 million from $4 million in Q3 2024 and a decrease of $55 million from $(32) million in Q2 2025[21] - Net loss in Q3 2025 was $(485) million, a decrease of $378 million from $(107) million in Q3 2024 and a decrease of $374 million from $(111) million in Q2 2025[21] - Adjusted EBITDA margin for Q3 2025 was -166%[21] Strategic Initiatives - The company is accelerating the retirement of blast furnace and coke oven operations as it ramps up EAF production through 2025 and 2026[28] - The company achieved first heat for EAF 1 in July 2025[37] - Construction is progressing on EAF 2, with commissioning activities expected in early 2026[37] Market Factors - Steel tariffs of 50% persist on imported steel into the US[34] - There is a current oversupply in the Canadian coil market due to the US market being cut off from Canadian steel mills[34] Safety - The company is implementing an ISO 45001 Safety Management System to further improve health and safety performance[17]

Group 1: Algoma Steel Group Inc. Earnings Report - Algoma Steel Group Inc. reported quarterly earnings of $0.12 per share, exceeding the Zacks Consensus Estimate of a loss of $0.7 per share, and improved from a loss of $0.72 per share a year ago, representing an earnings surprise of +117.14% [1] - The company has surpassed consensus EPS estimates three times over the last four quarters [2] Group 2: Legato Merger Performance - Legato Merger reported revenues of $380.44 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 3.67%, but down from year-ago revenues of $440.06 million [2] - Legato Merger shares have declined approximately 56.4% since the beginning of the year, contrasting with the S&P 500's gain of 17.2% [3] Group 3: Future Earnings Outlook - The company's earnings outlook is crucial for investors, including current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the upcoming quarter is -$0.42 on revenues of $443.88 million, and for the current fiscal year, it is -$1.98 on revenues of $1.61 billion [7] Group 4: Industry Context - The Steel - Producers industry is currently ranked in the bottom 32% of over 250 Zacks industries, indicating potential challenges for stocks within this sector [8] - Salzgitter AG, another company in the same industry, is expected to report a quarterly loss of $0.05 per share, reflecting a year-over-year change of +86.5%, with revenues projected at $2.64 billion, down 3.2% from the previous year [9]

Core Insights - Algoma Steel Group Inc. reported third quarter financial results that were in line with previously announced expectations, facing ongoing trade-related challenges while advancing its electric arc furnace (EAF) transformation [1][4][5] Financial Performance - Third quarter revenue was $523.9 million, down from $600.3 million in the prior-year quarter, primarily due to lower steel shipments [5][6] - Steel revenue decreased to $473.3 million from $539.0 million, with revenue per ton of steel sold increasing to $1,250 from $1,153 [5][6] - The company reported a consolidated loss from operations of $651.5 million, including a non-cash impairment loss of $503.4 million, compared to a loss of $83.6 million in the prior-year quarter [6][7] - Net loss for the quarter was $485.1 million, significantly higher than the net loss of $106.6 million in the prior-year quarter, driven mainly by the impairment loss [8][6] - Adjusted EBITDA loss was $87.1 million, with an adjusted EBITDA margin of (16.6%), compared to an adjusted EBITDA of $3.5 million and a margin of 0.6% in the prior-year quarter [9][6] Operational Developments - The EAF project has progressed as planned, with stable performance metrics achieved since the first steel production in July 2025 [11][12] - EAF operations were maintained on a limited schedule to align with market conditions, with plans to transition to a five-day operating week by mid-November 2025 [12] - Following the EAF transformation, the facility is expected to have an annual raw steel production capacity of approximately 3.7 million tons and reduce carbon emissions by about 70% [13][29] Trade Environment - The company continues to face challenges from U.S. trade actions, including a 50% tariff on steel imports, which has restricted access to the U.S. market and led to oversupply in Canada [14][15] - Canadian transactional pricing was reported to be up to 40% lower than comparable U.S. levels, resulting in a revenue reduction of approximately $32 million for the quarter [15][16] Strategic Initiatives - Algoma's board approved a plan to accelerate the decommissioning of its blast furnace and coke oven operations, focusing on low-carbon steel production from the EAF facility [16] - The company has secured $500 million in government-backed liquidity support to enhance financial flexibility and support its transformation strategy [17][18] Liquidity Position - As of the end of the quarter, Algoma had total liquidity of $337.1 million, including $4.5 million in cash and $332.6 million available under its ABL credit facility [18] - The company amended its ABL credit facility to increase total availability by US$75 million, further strengthening its liquidity [18] Dividend Policy - The board suspended the regular quarterly dividend in July 2025 to preserve liquidity and financial flexibility amid evolving market conditions [19]