Algoma Steel Group Reports Fiscal First Quarter 2025 Financial Results

Core Insights - Algoma Steel Group Inc. reported fiscal first quarter results that were in line with previously disclosed expectations, despite challenging steel pricing and macroeconomic conditions [2][3] - The company is progressing on key capital projects, including the Plate Mill Modernization and Electric Arc Furnace (EAF) project, which is expected to significantly reduce carbon emissions [2][6][7] Financial Performance - Consolidated revenue for the first quarter was $650.5 million, down from $827.2 million in the prior-year quarter, primarily due to lower steel shipments and prices [3][4] - The company reported a loss from operations of $12.5 million, compared to an income of $164.3 million in the prior-year quarter [3][4] - Net income decreased to $6.1 million from $130.9 million year-over-year, influenced by lower operational performance [4] - Adjusted EBITDA was $37.7 million with a margin of 5.8%, compared to $191.2 million and 23.1% in the prior-year quarter [5][27] - Shipments totaled 503,152 tons, a decrease of 11.6% from 569,433 tons in the prior-year quarter [5] Capital Projects - The EAF project is on schedule and budget, with a cumulative investment of approximately $611 million as of June 30, 2024, and expected to utilize a total budget of up to $875 million [6][7] - The completion of the EAF project is anticipated to reduce annual carbon emissions by approximately 70% and increase raw steel production capacity to about 3.7 million tons [7] Balance Sheet and Liquidity - As of the end of the quarter, the company had cash of $493.4 million and unused availability under its Revolving Credit Facility of $351.1 million [8] - The company issued $350 million of Senior Secured Second Lien Notes to strengthen its balance sheet [8] Dividend and Shareholder Returns - The Board declared a quarterly dividend of US$0.05 per share, payable on September 27, 2024 [9] - The company intends to relaunch a normal course issuer bid (NCIB) to repurchase up to 5% of its outstanding common shares and/or warrants [10][12]