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]