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 $5 million to
negative $5 million, which includes the initial recovery of
insurance proceeds estimated at approximately $20 million.
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 MoracaVice President – Corporate
Development & TreasurerAlgoma Steel Group Inc.Phone:
705.945.3300E-mail: IR@algoma.com
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