Algoma Steel Group Inc.

Algoma reported consolidated revenue of $267.5 million versus $589.7 million in the prior-year quarter. Shipments were 181,000 tons versus 472,000 tons a year ago, and average net sales realization rose 20.2% to $1,361 per ton from $1,132 per ton. Adjusted EBITDA was $13.8 million, or a 5.2% margin, compared with an adjusted EBITDA loss of $32.4 million and a negative 5.5% margin last year. Cost per ton of steel products sold was $1,411 versus $1,144 last year, direct tariff costs were $18.7 million versus $64.1 million, operating loss was $134.2 million, and net loss was $96 million. Guidance-wise, management said third-quarter shipments should be directionally lower by 10% to 20% versus the next quarter because of scheduled downtime and maintenance, and they expect the third quarter to be the trough of the transition. They also said the capacity utilization charge should be fully eliminated by the fourth quarter, Unit 2 should begin first steel later this quarter, and the exit run rate into calendar 2027 should be 1.5 million to 2 million tons.

Rajat Marwah emphasized that the quarter showed the transformed business can perform even in a difficult industry and tariff environment. He highlighted the shift to an EAF-only platform, record plate sales, and progress toward a full transition, saying Unit 2 is the final major milestone and that the company’s Canada-centric plate-first strategy remains the right response to market conditions. His tone was confident but measured, with repeated emphasis on safety, discipline, and execution rather than near-term demand strength alone.

Michael Moraca focused on the bridge from transition losses to improving economics. He cited $267.5 million of revenue, $13.8 million of adjusted EBITDA, a $54.7 million capacity utilization adjustment, and $18.8 million of foreign exchange gain from a weaker Canadian dollar, while noting direct tariff costs fell to $18.7 million. He said cash used in operations was $79.4 million, ending cash was $62.6 million, and total liquidity was about $437 million; he also pointed to about $200 million of tax refunds and the $45 million insurance settlement as additional liquidity sources. On capital allocation and financing, he said the company is focused first on getting to cash flow breakeven, while continuing to work through financing optionality if needed.

Analysts focused on the near-term volume dip, the mix between plate and sheet, cost behavior during the Unit 2 tie-in, and what production could look like exiting 2026 and into 2027. Management said the third-quarter decline is mainly tied to planned maintenance and tie-in work, not just demand, and that they are batching maintenance so both units can enter Q4 online. They reiterated an exit run rate of 1.5 million to 2 million tons into 2027, said plate could grow further to about 600,000 tons next year, and noted they continue exploring broader green-steel and defense opportunities even after the Hanwha Ocean MOU was suspended. On financing, management said cash receipts from the $45 million insurance settlement and about $200 million of tax refunds should help bridge the year, with the goal of reaching cash flow breakeven before considering other balance-sheet options.