Lower steel prices, shipments behind Q1 loss of $12.5M at Algoma Steel

Algoma Steel reported a first-quarter loss of $12.5 million this week, compared to an income of $164.3 million the same quarter a year earlier. (File)

Algoma Steel reported a first-quarter loss of $12.5 million this week, compared to an income of $164.3 million the same quarter a year earlier.

The Sault Ste. Marie producer of hot and cold rolled steel sheet and plate products announced results for the period ending June 30.

“Consolidated revenue of $650.5 million, compared to $827.2 million in the prior-year quarter, mainly attributable to lower steel shipments and realized prices,” Algoma said in a news release.

“Net income of $6.1 million, compared to $130.9 million in the prior-year quarter.”

Cash flows generated from operations in the first quarter totalled $12.5 million, compared to $163.9 million for the same period a month earlier.

Steel shipments totalled 503,152 tons, compared to 569,433 last year.

“Our operations performed well in the quarter, delivering results that were in line with our previously disclosed outlook,” CEO Michael Garcia said in the release.

“This summer has represented a period of challenging near-term steel pricing and uncertain macroeconomic conditions, but we have stayed focused on the business drivers within our control, namely the safe operation of our facilities, exceptional service to customers and the successful advancement of our capital programs.”

Garcia said the company has made significant progress in its massive modernization plan. With the help of up to $420 million from the federal government, Algoma is working to become the "greenest" flat-rolled steel producer in Canada.

The funding will help with Algoma Steel’s proposed transformation to electric arc furnace (EAF) steelmaking.

“We remain on pace to start EAF commissioning activities by calendar year-end, with steel production expected by the end of calendar Q1 2025,” Garcia said.

• Download our app to get local alerts on your device
• Get the latest local updates right to your inbox

“As our construction activities on the EAF project are in the home stretch, we remain on schedule and on budget. We are on the cusp of a new chapter for Algoma and believe that we are on track to deliver strong shareholder value as we transition to becoming one of North America's greenest steel producers.”

Once the transformation to EAF steelmaking is complete, the company “is anticipated to have an annual raw steel production capacity of approximately 3.7 million tons, matching its downstream finishing capacity of over three million tons, which is expected to reduce the Company’s annual carbon emissions by approximately 70 per cent,” the release said.