Algoma Steel Group Inc. has tonight reported a consolidated loss from operations of $12.5 million during its fiscal first quarter ended June 30, compared to income of $164.3 million in the same quarter last year.
In a news release, the Sault steelmaker attributed the drop largely to reduced steel shipments, caused in part by "an outage at the plate mill supporting the final stages of the modernization, greater consumption of purchased coke and natural gas, and weakening market conditions, which was partially offset by improvements in value-add products as a percentage of sales mix."
“Our operations performed well in the quarter, delivering results that were in-line with our previously disclosed outlook, said Michael Garcia, Algoma's chief executive officer.
"This summer has represented a period of challenging near-term steel pricing and uncertain macroeconomic conditions, but we have stayed focused on the business drivers within our control, namely the safe operation of our facilities, exceptional service to customers and the successful advancement of our capital programs.
"We have made significant progress on our two key capital projects: completing the second phase of our plate mill modernization and advancing our transformative electric arc furnace (EAF) project.
"We remain on pace to start EAF commissioning activities by calendar year-end, with steel production expected by the end of calendar Q1 2025.
"As our construction activities on the EAF project are in the home stretch, we remain on schedule and on budget. We are on the cusp of a new chapter for Algoma and believe that we are on track to deliver strong shareholder value as we transition to becoming one of North America's greenest steel producers," Garcia said.
Overall, the company reported net income of $6.1 million, compared to $130.9 million in the same quarter last year.
"The decrease was driven primarily by the factors described above under loss from operations. Net income in the quarter benefited from foreign exchange gains, changes in fair value of warranty liability, and income tax recovery," the company said.
Other fiscal first-quarter results, as reported by Algoma tonight;
- consolidated revenue of $650.5 million, compared to $827.2 million in the prior-year quarter, mainly attributable to lower steel shipments and realized prices
- consolidated loss from operations of $12.5 million, compared to income of $164.3 million in the prior-year quarter
- adjusted EBITDA of $37.7 million and Adjusted EBITDA margin of 5.8 per cent compared to $191.2 million and 23.1 per cent in the prior-year quarter
- cash flows generated from operations of $12.5 million, compared to $163.9 million in the prior-year quarter
- shipments of 503,152 tons, compared to 569,433 tons in the prior-year quarter
- paid quarterly dividend of US$0.05/share
The steelmaker also disclosed intention to relaunch a normal course issuer bid (NCIB) as part of its overall capital allocation strategy.
If the NCIB is approved by the TSX, Algoma would be allowed to purchase for cancellation, as much as five per cent of its outstanding common shares and/or warrants during the 12 months following TSX acceptance.
Yesterday, the company released its second annual environmental, social and governance report.
That report can be viewed here.