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, 2023. Unless otherwise
specified, all amounts are in Canadian dollars.
Fiscal 2024 second quarter total steel shipments
are expected to be in the range of 540,000 to 550,000 tons and
Adjusted EBITDA is expected to be in the range of $75 million to
$85 million.
Michael Garcia, Algoma’s Chief Executive Officer
commented, “Our operations have run in line with our expectations
in the fiscal second quarter. Our Plate Mill modernization project
reached a key milestone, as we commenced cold commissioning and ran
trial plates through our heavy gauge inline shear. Hot
commissioning continues and an expected ramp towards higher plate
production is planned for the end of the calendar year.”
“We are closely monitoring the evolving United
Auto Workers union’s work stoppages at certain North American
auto manufacturing facilities and the impact they are having on
steel markets, including lower than expected realized pricing
for recent steel shipments. In the meantime, we expect to perform
our normal annual steel making vessel reline, along with other
planned seasonal maintenance during the fiscal third quarter. On
the Electric Arc Furnace (EAF) project, work has advanced as
expected during the quarter, with additional scope committed
and priced as we continue to de-risk the project and
work towards our expectation of a late calendar 2024
commissioning,” Mr. Garcia concluded.
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 Algoma’s Adjusted
EBITDA guidance, estimated shipments for the second quarter of
fiscal 2024, 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. See the financial tables below for a
reconciliation of the non-IFRS financial measures reported
herein.
For more information, please
contact:
Michael MoracaTreasurer & Investor
Relations OfficerAlgoma Steel Group Inc.Phone: 705.945.3300E-mail:
IR@algoma.com
Algoma Steel (NASDAQ:ASTLW)
Historical Stock Chart
From Jul 2024 to Aug 2024
Algoma Steel (NASDAQ:ASTLW)
Historical Stock Chart
From Aug 2023 to Aug 2024