Algoma Benefits from Higher Steel Prices in Quarterly, Annual Results

“Our strong results for the fiscal fourth quarter capped off an incredible year at Algoma, one that produced record revenues, profitability and cash flows. Relentless execution by the entire team delivered these strong results across what was truly a tumultuous year for both steel and raw material markets,” commented new CEO Michael Garcia, who took over for Michael McQuade as of June 1.

Fiscal Q4 Results

Despite a 12% year-on-year decline in Q4 steel shipments to 547,217 tons, quarterly revenues and income showed significant increases. Consolidated revenues of $941.8 million CAD ($726.8m USD) were up 47.5% y-o-y while net income rose 143% to $242.9 million CAD ($187.5m USD).

Algoma attributed the increase in income to higher selling prices for steel, which were partially offset by higher input prices, including the price of iron ore, scrap, and alloys.

Full Fiscal Year Results

Full-year shipments rose 9.3% from the prior year to 2,297,159 tons, while revenues jumped 112% to $3.8 billion CAD ($2.9b USD). Net income swung from a net loss of $76.1 million CAD ($58.75m USD) in the previous year to $857.7 million CAD ($662.25m USD).

The improving results were again attributed to higher selling prices. But these were partially offset by higher priced inputs, increases in employee profit sharing, higher income taxes, and listing expenses and transaction costs related to the merger with Legato Merger Corp., Algoma said.

EAF Transition Update

Sault Ste. Marie, Ontario-based Algoma said its transition to electric arc furnace steelmaking continues to progress as planned, with a 2024 startup anticipated for its two new EAFs. Once the furnaces are completed, the sheet and plate maker will have an annual raw steelmaking capacity of 3.7 million tons, matching its downstream finishing capacity.

By Laura Miller, Laura@SteelMarketUpdate.com