Steel Mills

Algoma foresees narrow profit (or loss) in fiscal Q2'25

Written by Michael Cowden

September 27, 2024

Canadian flat-rolled steelmaker Algoma predicts it will be roughly breakeven on an adjusted EBITDA basis in the second quarter of its fiscal year.

The Sault Ste. Marie, Ontario-based company expects adjusted EBIDTA in the quarter ended Sept. 30, 2024, in a range from a gain of $5 million CAD ($3.7 million USD) to a loss of $5 million CAD.

The company said that figure includes insurance proceeds of $20 million CAD, according to earnings guidance released on Thursday.

Recall that Algoma reported a profit of $6.1 million CAD in fiscal Q1’25.

The steelmaker also expects Q2’25 shipments of 510,000 to 520,000 short tons (st). That’s above the approximately 503,000 st it shipped in its fiscal Q1’25.

“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,” Algoma CEO Michael Garcia said.

“Operationally we are well-positioned to capitalize on opportunities as market fundamentals improve and demand rebounds,” he added.

Algoma makes hot-rolled coil, cold-rolled coil, and plate. Prices for sheet products fell to year-to-date lows in July before recovering over the last two months, according to SMU’s pricing records. Plate prices, in contrast, have continued to decline.

Garcia also noted that “commissioning activities” for Algoma’s two new electric-arc furnaces (EAFs) remain on track to begin by the end of calendar year 2024.

Algoma plans to ramp up EAF output in 2025 while also continuing to operate its one active blast furnace, basic oxygen furnace, and coke ovens. The company has said it expects to convert fully to EAF production in 2026.

Michael Cowden

Michael Cowden is managing editor for Steel Market Update. Cowden has covered the steel industry since 2007. He has since 2014 specialized in flat-rolled steel but has previously reported on steel long products, steel pipe and tube as well as aluminum. Before joining SMU, Cowden held reporting jobs at Fastmarkets AMM in Chicago - where he was involved in launching AMM's daily hot-rolled coil index, the Associated Press in Pittsburgh, and the Cambodia Daily in Phnom Penh. He has also worked as a copy editor and in marketing at the University of Chicago Press. Cowden has a BA in English from the University of Chicago and an MSJ journalism from Northwestern University’s Medill School of Journalism. Contact him at michael@steelmarketupdate.com or 724-759-7872.

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