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]