Steel Mills

Algoma feels sting of unplanned outage, looks to greener future

Written by Laura Miller

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 3120242023Change
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$2,778.51%
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

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