Financial Data and Key Metrics Changes - The second quarter results included an adjusted EBITDA loss of CAD 32.4 million, reflecting an adjusted EBITDA margin of negative 5.5% and cash used in operating activities of CAD 37.9 million [17][18] - The company finished the quarter with CAD 82 million in cash and CAD 329 million available under its revolving credit facility [17] - Net loss in the second quarter was CAD 110.6 million compared to net income of CAD 6.1 million in the prior year quarter, driven primarily by lower steel shipment volumes and lower realized pricing [20] Business Line Data and Key Metrics Changes - Plate shipments reached approximately 103,000 tons, up from 91,000 tons in 2025 and 82,000 tons in 2024, indicating a strategic focus on plate production [10] - The company shipped 472,000 net tons in the quarter, a decline of 6.2% versus the prior year quarter, attributed to weakening market conditions [18] - Net sales realization averaged CAD 11.32 per tonne compared to CAD 11.87 per tonne in the prior year period, reflecting weakening market conditions [18] Market Data and Key Metrics Changes - The U.S. market is effectively closed to Canadian steel producers due to prohibitive 50% tariffs, significantly impacting export sales [7][10] - The Canadian plate market is characterized as stable, with the company holding over 40% market share, while the sheet market remains weak [28] - Pricing in the Canadian plate market is about 40% lower than in the U.S. plate market, which is currently a spot market [29] Company Strategy and Development Direction - The company is focused on completing its transition to lower cost, lower carbon green steelmaking, positioning itself as a competitive and sustainable operator [9][15] - Algoma is actively engaging with policymakers to ensure the strategic importance of Canadian steelmaking is recognized and supported [16] - The company is pursuing opportunities aligned with domestic demand in sectors such as defense, infrastructure, and clean manufacturing [14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the unprecedented disruption in the steel industry due to trade barriers and macroeconomic volatility, but remains optimistic about market normalization in the future [8][9] - The successful production of first steel from the EAF Unit 1 is seen as a transformative milestone, reinforcing confidence in the company's transformation strategy [12][15] - The company is reviewing multiple scenarios to manage risks associated with prolonged U.S. tariffs and is actively working on liquidity management [13][14] Other Important Information - Cumulative investment in the EAF project was CAD 880.5 million as of June 30, 2025 [12] - The company received final approval totaling CAD 21.3 million related to its EAF investment under Ontario's emissions performance program [21] Q&A Session Summary Question: Can you talk about the current plate market? - The plate market in Canada is stable and not as oversupplied as the sheet market, with the company building market share to over 40% [27][28] Question: How does Canadian pricing compare to U.S. pricing? - Canadian plate pricing is about 40% lower than U.S. pricing, currently operating as a spot market [29] Question: What is the remaining CapEx for the EAF project? - The guidance remains unchanged, with the project being de-risked by demonstrating the operation of the first unit [30] Question: How will CapEx be affected if the market remains weak? - CapEx is expected to be lower if the market stays weak, with maintenance CapEx flexing between CAD 80 million to CAD 120 million [31] Question: What additional measures are being considered to improve liquidity? - The company is actively working on optimizing working capital to generate more cash during uncertain times [36] Question: What are the expectations for shipments in the upcoming quarters? - Shipments are expected to remain around current levels, with uncertainty driven by trade discussions [39] Question: How long can the company service volumes under the 50% tariffs? - The company and its customers will need to assess the situation as they approach the contract season in the fourth quarter [55] Question: What are the next steps for ramping up EAF production? - The company expects to produce approximately 200,000 tons of EAF steel in 2025, with ongoing construction and commissioning of the second unit [56][57]

Financial Performance - Shipping volume for Q2 2025 was 472K NT, a slight increase from 470K NT in Q1 2025 but a 6% decrease from 503K NT in Q2 2024[21] - Steel Revenue in Q2 2025 reached $534 million, up 15% from $463 million in Q1 2025 but down 11% from $597 million in Q2 2024[21] - Adjusted EBITDA for Q2 2025 was $(32) million, an increase of $15 million from $(47) million in Q1 2025 but a decrease of $70 million from $38 million in Q2 2024[21] - Net Income in Q2 2025 was $(111) million, down $86 million from $(25) million in Q1 2025 and down $117 million from $6 million in Q2 2024[21] - Adjusted EBITDA margin for Q2 2025 was -55%[21, 22] Strategic Initiatives - The company is progressing with its Electric Arc Furnace (EAF) transformation, with the first heat achieved in July 2025[39] - The EAF project is expected to reduce emissions by 70% and improve GHG performance[39] - Algoma commenced quarterly dividend of $005 per share[39] Market Factors - Increased US tariffs of 50% on imported steel and aluminum have disrupted global steel markets[36] - Tariffs on imported pig iron into the US are also expected to impact market dynamics[36]

Company Performance - Algoma Steel Group Inc. reported a quarterly loss of $0.74 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.45, and compared to a loss of $0.05 per share a year ago, indicating a significant decline in performance [1] - Legato Merger, part of the Zacks Steel - Producers industry, posted revenues of $426.19 million for the quarter ended June 2025, slightly surpassing the Zacks Consensus Estimate by 0.15%, but down from $475.44 million year-over-year [2] - The earnings surprise for Algoma Steel was -64.44%, while Legato Merger has surpassed consensus EPS estimates two times over the last four quarters [1][2] Stock Performance - Legato Merger shares have decreased by approximately 37.4% since the beginning of the year, contrasting with the S&P 500's gain of 8.6% [3] - The current consensus EPS estimate for Legato Merger for the upcoming quarter is -$0.65 on revenues of $436.28 million, and for the current fiscal year, it is -$1.74 on revenues of $1.69 billion [7] Industry Outlook - The Steel - Producers industry is currently ranked in the bottom 12% of over 250 Zacks industries, indicating a challenging environment for companies within this sector [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact investor sentiment and stock performance [5][6]

Core Insights - Algoma Steel Group Inc. reported consolidated revenue of $589.7 million for the second quarter of 2025, a decrease from $650.5 million in the same quarter of the previous year [5][7] - The company experienced a net loss of $110.6 million, compared to a net income of $6.1 million in the prior-year quarter, primarily due to lower steel shipment volumes and pricing pressures [7][19] - The company achieved its first arc and first steel production from its Electric Arc Furnace (EAF) project, marking a significant milestone in its transition to green steel production [4][11] Financial Performance - Revenue for the second quarter was $589.7 million, down from $650.5 million year-over-year, with steel revenue specifically at $534.4 million compared to $597.4 million [5][7] - The average revenue per ton of steel sold decreased to $1,249 from $1,293 in the prior-year quarter [5] - The loss from operations was $85.1 million, significantly higher than the loss of $12.5 million in the previous year, attributed to lower revenues and increased costs from tariffs [6][7] Tariff Impact - Tariff costs for the second quarter totaled $64.1 million, impacting the company's financial performance due to ongoing tariff uncertainty and market conditions [6][16] - The U.S. imposed a 50% Section 232 tariff on steel exports from Canada, contributing to a structural imbalance in the Canadian market and resulting in lower pricing [14][15] - Canadian net sales realizations were reported to be up to 40% lower than U.S. levels, leading to an estimated revenue impact of $30 million [15][16] Operational Developments - The company completed preparations for its first production of Volta™, its trademarked green steel, with successful production achieved in early July 2025 [4][11] - The EAF project is expected to provide a structural cost advantage and reduce annual carbon emissions by approximately 70% [13][28] - As of June 30, 2025, the cumulative investment in the EAF project was $881 million, with funding expected from cash on hand and operations [12][19] Liquidity and Capital Allocation - At the end of the quarter, the company had cash of $82.5 million and unused availability under its Revolving Credit Facility of $329.1 million [17] - The Board of Directors decided to suspend the regular quarterly dividend of approximately US$5.2 million to preserve liquidity amid ongoing market uncertainties [19]

Core Viewpoint - Algoma Steel Group Inc. is facing significant challenges due to the ongoing 50% Section 232 tariff on Canadian steel, which is impacting its operations and outlook, while the company is actively seeking solutions to enhance liquidity and maintain competitiveness in the market [2][3][5]. Company Overview - Algoma Steel is a leading Canadian producer of hot and cold rolled steel sheet and plate products, and it is the only independent and publicly owned steelmaker in Canada [2][8]. - The company is nearing completion of a C$900 million investment in electric arc furnace steelmaking, aimed at reducing its carbon footprint and improving cash flow generation [2][9]. Trade and Tariff Impact - The current trade impasse and tariff environment are causing a structural imbalance in the Canadian steel market, prompting Algoma to consider various alternatives to bolster liquidity [3][4]. - Algoma is exploring targeted liquidity tools, including an application for $500 million under the federal Large Enterprise Tariff Loan (LETL) program, to support its operations and strategic diversification [4][5]. Strategic Initiatives - The company is modernizing its plate mill and adopting electric arc technology to lower carbon emissions and enhance its position as a leading producer of green steel in North America [9][10]. - Algoma emphasizes the importance of a strong Canadian steel industry for the country's economic strength, environmental goals, and national security [5].

Company Overview - Algoma Steel Group Inc. (ASTL) is expected to report a year-over-year decline in earnings due to lower revenues for the quarter ended June 2025, with a consensus estimate of a loss of $0.45 per share, representing a significant change of -800% [1][3] - Revenues are anticipated to be $425.54 million, reflecting a decrease of 10.5% compared to the same quarter last year [3] Earnings Expectations - The earnings report is scheduled for release on July 29, and the stock price may increase if the actual results exceed expectations, while a miss could lead to a decline [2] - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analyst expectations [4] Earnings Surprise Prediction - The Zacks Earnings ESP (Expected Surprise Prediction) model compares the Most Accurate Estimate to the Zacks Consensus Estimate, providing insights into potential earnings surprises [6][7] - A positive Earnings ESP reading is a strong indicator of an earnings beat, especially when combined with a favorable Zacks Rank [9] Industry Context - Nucor (NUE), another player in the steel producers industry, is expected to report earnings of $2.62 per share for the same quarter, indicating a year-over-year change of -2.2% [17] - Nucor's revenues are projected to be $8.41 billion, up 4.1% from the previous year, with a positive Earnings ESP of +0.69%, suggesting a likely earnings beat [18]

Core Viewpoint - Algoma Steel Group Inc. has filed a base shelf prospectus and a registration statement to maintain financial flexibility, allowing potential future offerings of various securities over a 25-month period, although there is no immediate intention to raise capital [1][2]. Company Overview - Algoma Steel is a leading Canadian producer of hot and cold rolled steel sheet and plate products, based in Sault Ste. Marie, Ontario [5]. - The company is a fully integrated producer and key supplier of steel products in North America, being the only producer of discrete plate products in Canada [5]. - Algoma's Direct Strip Production Complex (DSPC) is noted as one of the lowest-cost producers of hot rolled sheet steel in North America [5]. Strategic Initiatives - Algoma is undergoing a transformation journey, modernizing its plate mill and adopting electric arc technology to significantly lower carbon emissions [6]. - The company is focused on building a greener future and investing in its people and processes to become a leading producer of green steel in North America [6]. Market Position - As a founding industry in its community, Algoma aims to deliver greater value and ensure a secure steel supply for North America [7].

Core Viewpoint - Algoma Steel Group Inc. is set to release its Q2 2025 financial results on July 29, 2025, with a conference call scheduled for July 30, 2025, to discuss the results and recent developments [1][3] Financial Performance - Total steel shipments for the quarter are expected to be approximately 472,000 tons [2] - Adjusted EBITDA is anticipated to be in the range of ($30) million to ($35) million [2] Company Strategy and Operations - The CEO highlighted that the results were in line with expectations, particularly noting strength in the plate business despite macroeconomic uncertainties and tariff policies affecting the sector [3] - Algoma is advancing its transformation into one of North America's greenest steel producers, having achieved first arc and first steel production from its electric arc furnace project [3][8] Company Overview - Algoma is a fully integrated producer of hot and cold rolled steel products, including sheet and plate, and is a key supplier in North America [7] - The company is modernizing its plate mill and adopting electric arc technology to significantly lower carbon emissions, emphasizing its commitment to environmental stewardship [8]

Core Insights - Algoma Steel Group Inc. (ASTL) has achieved its first steel production at Unit One of its new electric arc furnace (EAF) project, marking a significant milestone for the company [1][8] - The EAF project is the largest industrial decarbonization initiative in Canada, enabling the production of green steel with potential carbon emissions reduction of up to 70% [2][8] - The steel produced is branded as "Volta," which is powered by Ontario's clean electricity grid, aligning with the increasing demand for environmentally friendly products [3][8] Company Performance - ASTL's stock has declined by 14.3% over the past year, while the industry has seen a larger decline of 23.8% [5] - Currently, ASTL holds a Zacks Rank of 4 (Sell), indicating a less favorable outlook compared to other stocks in the Basic Materials sector [6] - In contrast, other companies in the sector, such as Royal Gold, Inc. (RGLD) and Coeur Mining, Inc. (CDE), have shown stronger performance and higher Zacks Ranks [6][7][9]

Core Viewpoint - Algoma Steel Group Inc. has achieved its first steel production at its new electric arc furnace project, marking a significant milestone in its transformation towards producing green steel with a potential reduction in carbon emissions by up to 70 percent [1][2]. Company Overview - Algoma Steel is a leading Canadian producer of hot and cold rolled steel sheet and plate products, based in Sault Ste. Marie, Ontario [6]. - The company is a fully integrated producer and key supplier of steel products in North America, recognized for its Direct Strip Production Complex, which is one of the lowest-cost producers of hot rolled sheet steel in the region [6]. Transformation and Innovation - The first steel production from the electric arc furnace (EAF) project is part of Algoma's largest industrial decarbonization initiative in Canada, reflecting years of planning and execution since the project began in November 2021 [3]. - The EAF technology is expected to significantly lower carbon emissions, aligning with the company's commitment to environmental stewardship and recycling [7]. Product Development - All steel produced through the EAFs will be branded as Volta, which aims to deliver the same performance as existing products but with dramatically lower emissions, leveraging Ontario's clean electricity grid [4]. - The introduction of Volta is part of Algoma's strategy to support the growth of a low-carbon economy [4]. Leadership Perspective - The President and CEO of Algoma expressed pride in reaching this critical milestone, emphasizing the company's determination to innovate and lead in the steel industry during a period of trade uncertainty [3].