Algoma Steel Group Inc. lost slag pots of cash in recent months, but a high-temperature electric arc that will transform the way steel is made here is expected to be sparked for the first time in April.
"After years of planning and construction, I'm thrilled we are rapidly approaching the first arc in furnace one, with first steel production still expected in April," said Michael Garcia, chief executive officer, in a news release this evening announcing the company's latest quarterly results.
“We reach this milestone amid turbulence in the North American market, as evolving tariffs on Canadian steel and aluminum imports add further uncertainty.
"However, we remain confident that the Canadian federal and provincial governments will respond swiftly and appropriately to support the industry. Given the deeply integrated North American supply chain, we believe rational dialogue will prevail between these close allies, restoring normal steel trade.
"While these tariffs pose a significant challenge, we expect that our transition to electric arc steelmaking will strengthen our cost structure and enhance our ability to navigate market uncertainties over the long term," Garcia said.
Speaking to SooToday last week, he estimated that tariffs payable to the U.S. government on sales of Algoma plate steel at $1,000 a ton could total $12.5 million over six months.
Tonight's news release said "an estimate of the financial impact cannot be made at this time.”
Liberal leader Mark Carney, who will be sworn in as prime minister on Friday, was at ArcelorMittal Dofasco in Hamilton today, promising "full support" for Canadian steel and aluminum workers, "now and for the future."
Algoma reported a fourth-quarter loss from operations of $124.8 million, compared to a loss of $36.9 million during the prior-year quarter.
Other reported results:
- fourth-quarter revenue totalled $590.3 million, compared to $615.4 million in the prior year quarter. As compared with the prior year quarter, steel revenue was $535.7 million, compared to $556.9 million, and revenue per ton of steel sold was $1,076, compared to $1,192
- net loss in the fourth quarter was $66.5 million, compared to a net loss of $84.8 million in the prior-year quarter. The improvement was said to be driven primarily by an increase in foreign exchange gain, a change in fair value of warrant liability, a change in fair value of share-based compensation liability, income tax recovery, and change in fair value of earnout liability
- adjusted EBITDA in the fourth quarter was a loss of $60.3 million, compared with a loss of $1.0 million for the prior-year quarter. This resulted in an adjusted EBITDA margin of (10.2 per cent).
"First arc and first steel will represent extraordinary achievements for our company and community, accomplished despite one of the harshest winters we've experienced in years that included extreme cold and unprecedented snowfall," Garcia said.
"We are about to enter the transition phase of the project, with rising steel production from the EAF [electric arc furnace] augmenting output from our traditional blast furnace operations on the way to processing all of our steel through the EAFs around the end of 2026.
"2025 marks the beginning of a new chapter where Algoma begins its journey to become one of the greenest producers of steel in North America while creating lasting value for all stakeholders, and we couldn’t be more excited for what the future holds."