Steel Mills

Algoma feels sting of unplanned outage, looks to greener future

June 21, 2024

Algoma Steel’s quarterly and full-year results took a hit from an unplanned blast furnace outage earlier this year. However, with a modernized plate mill and two new EAFs slated to come online by the end of this year, the Canadian flat-rolled steel producer is looking to a greener future.

Algoma Steel Group Inc.

Fourth quarter ended March 31	2024	2023	Change
Net sales	$620.6	$677.4	-8%
Net earnings (loss)	$28.0	($20.4)	237%
Per diluted share	$0.10	($0.19)	153%
Year ended March 31
Net sales	$2,795.8	$2,778.5	1%
Net earnings (loss)	$105.2	$298.5	-65%
Per diluted share	$0.70	$1.71	-59%

(in millions of Canadian dollars except per share)

On Thursday, Algoma reported its earnings results for the fourth quarter and fiscal year ended March 31, 2024.

Despite an 8% year-over-year decline in sales to CA$620.6 million (USD$453.1 million), Algoma swung to a profit of CA$28.0 million in fiscal Q4. Quarterly steel shipments of 450,966 tons plunged 21% y/y.

Algoma estimated the production loss from the three-week unplanned BF outage in January to be 150,000 tons of hot metal. This negatively affected adjusted Ebitda by CA$120-130 million. It has yet to be determined if the company will receive any insurance reimbursement for the incident.

For the fiscal 2024 year, Algoma’s earnings of CA$105.2 million (USD$76.8 million) were down by more than half from fiscal 2023 on sales that inched up 1% to nearly CA$2.8 billion (USD$2.04 billion).

“Fiscal 2025 marks a pivotal and exciting period for Algoma.
We remain on track with our transformative electric-arc furnace project and expect to begin commissioning activities by the end of calendar 2024, heralding a new era for our company.”
Algoma CEO Michael Garcia

Once the transformation to EAF steelmaking is complete, Algoma’s raw steelmaking capacity of ~3.7 million tons will match its downstream finishing capacity.

The Sault Ste. Marie, Ontario-based company celebrated the finalization of its plate mill modernization project this month. It is ramping up production and sales towards its anticipated annual run rate capacity of more than 650,000 short tons.

Fiscal Q1 outlook

For fiscal Q1, Algoma anticipates shipping 500,000 to 510,000 tons of steel products. Adjusted Ebitda is forecast to be CA$30 million to CA$40 million.

Laura Miller

Laura Miller is a reporter and editor for Steel Market Update. Since 2007, she has held various editorial and marketing positions with steel industry publications, associations, and mills. In 2021, after a five-year hiatus working across other industries, she returned to steel trade journalism, joining SMU in 2022. She is a member of the Association of Women in the Metal Industries and a past-president of the AWMI Pittsburgh Chapter. She holds a BA in Latin American Studies from Edinboro University of Pennsylvania. She can be reached at laura@steelmarketupdate.com or 724-759-7869.