Algoma Steel Group Inc. Reports Decrease in Q1 Earnings and Revenues YoY

Algoma Steel Group Inc. (NASDAQ:ASTL) has released its financial results for the first quarter of fiscal 2024, which concluded on June 30, 2023. The company reported earnings of 85 cents per share for the quarter, representing a decline from the earnings of $1.49 in the same quarter of the previous year.

The total revenues recorded by the company for the quarter amounted to $827.2 million, indicating a decrease of approximately 11.4% compared to the revenues of the previous year. Notably, the revenue from steel operations experienced a significant decline of 14%, falling from $877.4 million in the corresponding quarter of the prior year to $754.5 million in the current quarter.

In terms of steel sales, the company’s revenue per ton sold also saw a decline, dropping by 16.4% from $1,738 in the previous year’s quarter to $1,453 in the current quarter. However, despite these challenges, the company managed to increase its shipments for the first quarter by 5.9%, with shipments totaling 569,433 tons compared to 537,524 tons in the same quarter of the previous year.

The first-quarter Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) amounted to $191.2 million, a decrease from the $357.7 million reported in the prior-year quarter. The Adjusted EBITDA margin for the quarter was 23.1%.

In terms of financials, the company’s cash flows generated from operations were $163.9 million for the quarter, a decrease from the $276.6 million reported in the same quarter of the previous year. Additionally, Algoma Steel announced a quarterly dividend of 5 cents per share.

Significant Progress on EAF Project

Algoma Steel has achieved notable advancements in its electric arc furnace (EAF) project. By June 2023, the company had invested $341 million in the project, which accounts for approximately 40% of the projected total cost ranging between $825 million and $875 million. The EAF project is scheduled for commissioning by the conclusion of 2024 and is poised to replace the company’s existing blast furnace and basic oxygen steelmaking operations. Once operational, the EAF project will enable Algoma Steel to achieve an annual raw steel production capacity of approximately 3.7 million tons, aligning with the company’s downstream finishing capacity.