Algoma Steel (ASTL) - 2023 Q2 - Quarterly Report

Financial Performance - Revenue for the three months ended September 30, 2022, was $599.2 million, a decrease of 40.7$1,010.2 million for the same period in 2021[3] - Net income for the three months ended September 30, 2022, was $87.2 million, down 69.8$288.2 million in the prior year[5] - Operating income for the six months ended September 30, 2022, was $334.5 million, a decline of 48.9$654.3 million for the same period in 2021[3] - The company reported a total comprehensive income of $168.0 million for the three months ended September 30, 2022, compared to$380.2 million for the same period in 2021[5] - Basic net income per common share for the three months ended September 30, 2022, was $0.72, a decrease from$4.02 in the same period of 2021[3] Assets and Liabilities - Total assets as of September 30, 2022, increased to $2,716.0 million from$2,693.6 million as of March 31, 2022[7] - Total liabilities increased to $1,180.9 million as of September 30, 2022, compared to$1,111.0 million as of March 31, 2022[7] - Total shareholders' equity as of September 30, 2022, was $1,582.6 million, compared to$1,535.0 million at March 31, 2022[9] Cash Flow and Investments - Cash and cash equivalents decreased to $464.9 million as of September 30, 2022, down from$915.3 million as of March 31, 2022[7] - Cash used in operating activities for the three months ended September 30, 2022, was $(66.1) million, down from$380.1 million in the same period last year[12] - Cash used in investing activities for the three months ended September 30, 2022, was $(85.2) million, compared to$(25.1) million in the same period last year[12] - Cash used in financing activities for the three months ended September 30, 2022, was $(554.3) million, an increase from$(14.3) million in the same period last year[12] - The ending cash balance as of September 30, 2022, was $464.9 million, compared to$366.6 million at the end of the previous year[12] Shareholder Activities - The company repurchased and cancelled common shares totaling $(543.0) million during the three months ended September 30, 2022[12] - The balance of common shares outstanding as of September 30, 2022, was 103,854,574, with a stated capital value of$961.0 million[84] - The company completed a substantial issuer bid on July 27, 2022, purchasing 41,025,641 common shares at US$9.75 per share for an aggregate amount of US$400 million, representing approximately 28.0% of the issued and outstanding common shares at that time[88] - As of September 30, 2022, the company purchased and cancelled 3,077,572 common shares at a weighted average price of $9.25 (US$7.30) per share, totaling approximately $34.7 million (US$26.8 million)[86] Pension and Tax Expenses - The company reported a pension expense in excess of funding of $49.1 million for the three months ended September 30, 2022[12] - The current tax expense for the six months ended September 30, 2022, was$105.9 million, compared to $25.7 million for the same period in 2021[77] - The defined benefit costs recognized in net income for the six months ended September 30, 2022, totaled$60.6 million, compared to $12.2 million for the same period in 2021[66] Revenue Breakdown - The geographical distribution of total revenue showed sales to customers in Canada at$210.5 million, down from $338.0 million in the same period of 2021, a decrease of 37.6$380.3 million for the three months ended September 30, 2022, compared to $652.1 million in the same period of 2021, a decline of 41.6$(133.3) million for the three months ended September 30, 2022[12] - The company recognized a past service cost adjustment of $44.6 million related to the defined benefit pension plan during the three months ended September 30, 2022[30] - The company recognized a past service cost adjustment related to other post-employment benefits of$3.8 million, impacting cost of steel revenue and administrative expenses[74] Market and Economic Factors - A 10% increase in the price of hot-rolled coil would result in an approximate $4.8 million decrease in profit or loss, down from$24.9 million in the previous year[114] - The company had a net loss from operations impacted by a $0.01 change in the US dollar relative to the Canadian dollar, which would have affected income by$0.4 million for the three-month period ended September 30, 2022[109] Management and Compensation - The company’s key management personnel received total remuneration of $6.5 million for the three months ended September 30, 2022, compared to$7.8 million in the same period of 2021[136] - For the three and six month periods ended September 30, 2022, the company recorded a share-based payment compensation expense of $0.9 million and$1.8 million, respectively, in administrative and selling expenses[140][142]