Algoma Steel Provides Fiscal Second Quarter 2025 Guidance
Algoma Steel Group Inc. (NASDAQ: ASTL; TSX: ASTL) has provided guidance for its fiscal second quarter ending September 30, 2024. The company expects total steel shipments to be between 510,000 and 520,000 tons. Adjusted EBITDA is projected to range from $5 million to negative $5 million, including an estimated $20 million in initial insurance proceeds recovery.
CEO Michael Garcia noted that operations are performing as expected despite challenging market conditions for steel demand and pricing. He emphasized that Algoma is well-positioned to capitalize on opportunities when market fundamentals improve. The company's Electric Arc Furnace project remains on track, with commissioning activities expected to begin by the end of the calendar year, marking Algoma's transformation into one of North America's most environmentally sustainable steel producers.
Algoma Steel Group Inc. (NASDAQ: ASTL; TSX: ASTL) ha fornito indicazioni per il secondo trimestre fiscale che termina il 30 settembre 2024. L'azienda prevede che le spedizioni totali di acciaio siano comprese tra 510.000 e 520.000 tonnellate. L'EBITDA rettificato è previsto in un intervallo tra 5 milioni di dollari e -5 milioni di dollari, includendo un recupero stimato di 20 milioni di dollari da indennizzi assicurativi iniziali.
Il CEO Michael Garcia ha sottolineato che le operazioni stanno procedendo come previsto nonostante le condizioni di mercato difficili per la domanda e i prezzi dell'acciaio. Ha evidenziato che Algoma è ben posizionata per capitalizzare le opportunità quando i fondamenti di mercato miglioreranno. Il progetto del forno ad arco elettrico è in linea con i tempi, con l'inizio delle attività di messa in servizio previsto entro la fine dell'anno solare, segnando la trasformazione di Algoma in uno dei produttori di acciaio più sostenibili dal punto di vista ambientale in Nord America.
Algoma Steel Group Inc. (NASDAQ: ASTL; TSX: ASTL) ha proporcionado orientación para su segundo trimestre fiscal que finaliza el 30 de septiembre de 2024. La empresa espera que los envíos totales de acero se sitúen entre 510,000 y 520,000 toneladas. Se proyecta que el EBITDA ajustado varíe desde 5 millones de dólares hasta -5 millones de dólares, incluyendo una recuperación estimada de 20 millones de dólares en los primeros pagos de seguros.
El CEO Michael Garcia destacó que las operaciones están funcionando como se esperaba a pesar de las desafiantes condiciones del mercado para la demanda y los precios del acero. Enfatizó que Algoma está bien posicionada para aprovechar las oportunidades cuando mejoren los fundamentos del mercado. El proyecto del Horno de Arco Eléctrico sigue en su camino, con actividades de puesta en marcha previstas para comenzar antes de que finalice el año calendario, marcando la transformación de Algoma en uno de los productores de acero más sostenibles desde el punto de vista ambiental en América del Norte.
Algoma Steel Group Inc. (NASDAQ: ASTL; TSX: ASTL)가 2024년 9월 30일에 종료되는 회계 제2분기에 대한 전망을 제공했습니다. 회사는 총 강철 출하량이 510,000톤에서 520,000톤 사이가 될 것으로 예상합니다. 조정 EBITDA는 500만 달러에서 -500만 달러 사이가 될 것으로 예상됩니다, 여기에는 초기 보험 보상으로 예상되는 2천만 달러가 포함됩니다.
CEO Michael Garcia는 강철 수요와 가격에 대한 어려운 시장 상황에도 불구하고 운영이 예상대로 진행되고 있다고 언급했습니다. 그는 Algoma가 시장의 기초가 개선될 때 기회를 활용할 수 있는 좋은 위치에 있다고 강조했습니다. 회사의 전기 아크로에서 프로젝트는 일정대로 진행되고 있습니다, 연말까지 시운전 활동이 시작될 것으로 예상되며, 이는 Algoma가 북미에서 가장 환경적으로 지속 가능한 철강 생산업체 중 하나로 변모하는 이정표가 됩니다.
Algoma Steel Group Inc. (NASDAQ: ASTL; TSX: ASTL) a fourni des prévisions pour son deuxième trimestre fiscal se terminant le 30 septembre 2024. La société s'attend à ce que les expéditions totales d'acier se situent entre 510 000 et 520 000 tonnes. Le bénéfice avant intérêts, impôts, dépréciation et amortissement ajusté devrait varier de 5 millions à -5 millions de dollars, y compris une récupération estimée à 20 millions de dollars dans le cadre des premiers gains d'assurance.
Le PDG Michael Garcia a souligné que les opérations se déroulent comme prévu malgré les conditions de marché difficiles pour la demande et les prix de l'acier. Il a insisté sur le fait qu'Algoma est bien positionnée pour tirer parti des opportunités lorsque les fondamentaux du marché s'amélioreront. Le projet de four à arc électrique est en bonne voie, les activités de mise en service devant commencer d'ici la fin de l'année civile, marquant la transformation d'Algoma en l'un des producteurs d'acier les plus durables sur le plan environnemental en Amérique du Nord.
Algoma Steel Group Inc. (NASDAQ: ASTL; TSX: ASTL) hat eine Prognose für das zweite Fiskalquartal veröffentlicht, das am 30. September 2024 endet. Das Unternehmen erwartet, dass die gesamten Stahlverladungen zwischen 510.000 und 520.000 Tonnen liegen werden. Das bereinigte EBITDA wird voraussichtlich zwischen 5 Millionen und -5 Millionen Dollar liegen, wobei Schätzungen von 20 Millionen Dollar an anfänglichen Versicherungsleistungen berücksichtigt werden.
CEO Michael Garcia hat festgestellt, dass die Betriebe wie erwartet laufen, trotz der herausfordernden Marktbedingungen für die Nachfrage und die Preise von Stahl. Er betonte, dass Algoma gut positioniert ist, um von den Gelegenheiten zu profitieren, wenn sich die Marktfundamente verbessern. Das Projekt des Elektrolichtbogenofens verläuft nach Plan, wobei die Inbetriebnahme-Aktivitäten bis zum Ende des Kalenderjahres beginnen sollen, was Algomas Transformation in einen der umweltfreundlichsten Stahlproduzenten in Nordamerika markiert.
- Initial recovery of insurance proceeds estimated at approximately $20 million
- Electric Arc Furnace project on track with commissioning expected by year-end
- Well-positioned to capitalize on opportunities when market conditions improve
- Adjusted EBITDA guidance ranges from $5 million to negative $5 million
- Challenging market conditions for steel demand and pricing
Insights
Algoma Steel's Q2 FY2025 guidance reveals a challenging period for the company. Expected steel shipments of 510,000 to 520,000 tons suggest steady production, but the projected Adjusted EBITDA range of
The company is facing "challenging market conditions for steel demand and pricing," which is likely impacting margins severely. However, the ongoing Electric Arc Furnace project, set for commissioning by year-end, could be a game-changer. This transition towards more sustainable production could potentially improve cost structures and market positioning in the long term.
For investors, the near-term outlook appears weak, but the company's strategic initiatives may offer hope for future improvement. The stock may face downward pressure in the short term due to the weak earnings guidance.
Algoma Steel's commitment to its Electric Arc Furnace (EAF) project is a significant step towards environmental sustainability in the steel industry. EAFs are known to reduce carbon emissions by up to
This transition aligns with growing market and regulatory pressures for reduced carbon footprints in heavy industries. It could provide Algoma with a competitive edge, potentially attracting environmentally conscious customers and investors. However, the initial capital expenditure and transition period may pressure short-term financials.
The project's completion could also lead to operational cost savings in the long run, as EAFs generally have lower operating costs and more flexibility in production volumes. This could enhance Algoma's resilience to market fluctuations and improve its long-term profitability profile.
SAULT STE. MARIE, Ontario, Sept. 26, 2024 (GLOBE NEWSWIRE) -- Algoma Steel Group Inc. (NASDAQ: ASTL; TSX: ASTL) (“Algoma” or “the Company”), a leading Canadian producer of hot and cold rolled steel sheet and plate products, today provided guidance for its fiscal second quarter ending September 30, 2024. Unless otherwise specified, all amounts are in Canadian dollars.
Fiscal 2025 second quarter total steel shipments are expected to be in the range of 510,000 to 520,000 tons and Adjusted EBITDA is expected to be in the range of
Michael Garcia, Algoma’s Chief Executive Officer, stated, “Our operations are performing in line with expectations for the fiscal second quarter, despite operating against a backdrop of challenging market conditions for steel demand and pricing. Operationally we are well-positioned to capitalize on opportunities as market fundamentals improve and demand rebounds. Importantly, we remain on track with our Electric Arc Furnace project with commissioning activities expected to begin by calendar year-end. This milestone will mark the beginning of Algoma Steel's transformation into one of the most environmentally sustainable steel producers in North America.”
About Algoma Steel Inc.
Based in Sault Ste. Marie, Ontario, Canada, Algoma is a fully integrated producer of hot and cold rolled steel products including sheet and plate. Driven by a purpose to build better lives and a greener future, Algoma is positioned to deliver responsive, customer-driven product solutions to applications in the automotive, construction, energy, defense, and manufacturing sectors. Algoma is a key supplier of steel products to customers in North America and is the only producer of discrete plate products in Canada. Its state-of-the-art Direct Strip Production Complex (“DSPC”) is one of the lowest-cost producers of hot rolled sheet steel (HRC) in North America.
Algoma is on a transformation journey, modernizing its plate mill and adopting electric arc technology that builds on the strong principles of recycling and environmental stewardship to significantly lower carbon emissions. Today Algoma is investing in its people and processes, working safely, as a team to become one of North America’s leading producers of green steel.
As a founding industry in their community, Algoma is drawing on the best of its rich steelmaking tradition to deliver greater value, offering North America the comfort of a secure steel supply and a sustainable future as your partner in steel.
Cautionary Statement Regarding Forward-Looking Statements
This news release contains “forward-looking information” under applicable Canadian securities legislation and “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 (collectively, “forward-looking statements”), including statements regarding expected total steel shipments and Adjusted EBITDA, the improvement of market fundamentals and rebound in demand, the supply of raw materials and other key inputs in the steelmaking process, Algoma’s transition to EAF steelmaking, including the progress, costs and timing of completion of the Company’s EAF project, Algoma’s future as a leading producer of green steel, Algoma’s modernization of its plate mill facilities, transformation journey, ability to deliver greater and long-term value, ability to offer North America a secure steel supply and a sustainable future, and investment in its people, and processes, plans or future financial or operating performance. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “design,” “pipeline,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions. Many factors could cause actual future events to differ materially from the forward-looking statements in this document. Readers should also consider the other risks and uncertainties set forth in the section entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Information” in Algoma’s Annual Information Form, filed by Algoma with applicable Canadian securities regulatory authorities (available under the company’s SEDAR+ profile at www.sedarplus.ca) and with the SEC, as part of Algoma’s Annual Report on Form 40-F (available at www.sec.gov), as well as in Algoma’s current reports with the Canadian securities regulatory authorities and SEC. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Algoma assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.
Non-IFRS Financial Measures
To supplement our financial statements, which are prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”), we use certain non-IFRS measures to evaluate the performance of Algoma. These terms do not have any standardized meaning prescribed within IFRS and, therefore, may not be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing a further understanding of our financial performance from management’s perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS.
Adjusted EBITDA, as we define it, refers to net (loss) income before amortization of property, plant, equipment and amortization of intangible assets, finance costs, interest on pension and other post-employment benefit obligations, income taxes, restructuring costs, impairment reserve, foreign exchange gain, finance income, inventory write-downs, carbon tax, changes in fair value of warrant, earnout and share-based compensation liabilities, transaction costs, share-based compensation, and past service costs related to pension benefits and post-employment benefits. Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by revenue for the corresponding period. Adjusted EBITDA is not intended to represent cash flow from operations, as defined by IFRS, and should not be considered as alternatives to net earnings, cash flow from operations, or any other measure of performance prescribed by IFRS. Adjusted EBITDA, as we define and use it, may not be comparable to Adjusted EBITDA as defined and used by other companies. We consider Adjusted EBITDA to be a meaningful measure to assess our operating performance in addition to IFRS measures. It is included because we believe it can be useful in measuring our operating performance and our ability to expand our business and provide management and investors with additional information for comparison of our operating results across different time periods and to the operating results of other companies. Adjusted EBITDA is also used by analysts and our lenders as a measure of our financial performance. In addition, we consider Adjusted EBITDA margin to be a useful measure of our operating performance and profitability across different time periods that enhance the comparability of our results. However, these measures have limitations as analytical tools and should not be considered in isolation from, or as alternatives to, net income, cash flow from operations or other data prepared in accordance with IFRS. Because of these limitations, such measures should not be considered as measures of discretionary cash available to invest in business growth or to reduce indebtedness. We compensate for these limitations by relying primarily on our IFRS results using such measures only as supplements to such results.
For more information, please contact:
Michael Moraca
Vice President – Corporate Development & Treasurer
Algoma Steel Group Inc.
Phone: 705.945.3300
E-mail: IR@algoma.com
FAQ
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