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- **Strategic Pivot**: U.S. 50% tariffs forced shift to domestic plate production, supported by $500M government loans.
- **Financial Resilience**: Q3 EBITDA loss of $87.1M, with $90M tariffs and 40% price decline. Liquidity at $337M post-support.
- **EAF Transition**: $910M invested in EAF (total $987M), targeting 2026 breakeven with 1.0-1.2M ton production.
- **Cash Flow Management**: $100-150M working capital release and tax refunds in 2026. Scrap+ cost targets ($220-250/ton) depend on Canadian demand growth.

**【Management Opening Remarks】**
- Michael Moraca provided standard disclaimers and noted the use of Canadian dollars in financial discussions. The company's earnings presentation was available online.

**【CEO Summary Section】**
- **Strategic Shifts**: U.S. 50% tariffs closed the market, forcing a pivot to domestic production. Government support ($500M) and EAF acceleration aim to reduce cash burn.
- **Safety & EAF Progress**: Maintained strong safety performance; EAF Unit 1 ramp-up on track, with $910M invested (total $987M expected).
- **Market Reorientation**: Focus on high-value Canadian plate products for infrastructure, defense, and renewable energy sectors.

**【CFO Financial Commentary】**
- **Q3 2025 Results**: Adjusted EBITDA loss of $87.1M, driven by $90M tariffs and 40% price decline. Liquidity at $337M post-$500M government support.
- **Cost Dynamics**: Cost per ton up 24.2% YoY, with tariffs adding $214/ton. Plate production (97,000 tons) offset weaker coil markets.
- **Liquidity Management**: Expanded ABL to $375M and $500M government loans, with working capital release ($100-150M) and tax refunds.

**【Q&A Key Highlights】**
- **Tariff Impact & Breakeven**: Accelerated EAF transition to 2026; EBITDA breakeven expected post-2026 with 1.0-1.2M ton production. Scrap+ costs target $220-250/ton.
- **Plate Market Growth**: Canadian plate demand could expand to 1.0-1.2M tons with nation-building projects. Working capital release and tax refunds (~$150M+ in 2026).
- **Government Support Utilization**: Priority on non-dilutive ABL draws; warrants attached to $400M federal loan. Scrap+ cost targets and market support for 2.5M ton capacity require Canadian demand growth or U.S. tariff resolution.


Algoma Steel Group Inc. (ASTL) Q3 2025 Earnings Call Transcript

- **Strong Liquidity**: $452M cash and $800M total liquidity support completion of EAF project.
- **EAF Project Milestones**: Commissioning on track for end-2024, with 90% of remaining work contracted and <5% budget overrun.
- **Market Challenges**: Revenue down 19% YoY due to depressed steel prices, but improving margin mix from plate production.
- **Insurance Recovery**: $32M received Q2, with $60M+ property damage recovery expected by end-2024.
- **Working Capital Efficiency**: Targeting $200M+ release by end-2025 through inventory reduction and EAF transition.

**【CEO Summary Section】**
- Delivered solid operational performance in Q2 FY2025, with plate shipments of 73,000 tons (up 20% QoQ) despite soft global steel markets.
- EAF project on track for commissioning by end of CY2024, with 90% of remaining construction work contracted and within 5% of budget.
- Balance sheet strength: $452M cash, $800M total liquidity, and no unusual production impacts from seasonal maintenance.
- Market conditions remain challenging, with steel prices at year-to-date lows, but focused on controlling production and customer service.

**【CFO Financial Commentary】**
- Adjusted EBITDA of $4M (0.6% margin), driven by $28M net insurance proceeds from utility corridor incident.
- Revenue $539M (-19% YoY), shipments 520,000 tons (-5.2% YoY), cost per ton $1,032 (+1.1% YoY) due to lower volumes and purchase coke usage.
- Working capital management: $793M inventories (down $15M YoY), targeting $100M+ release by March 2025.
- Received $32M insurance proceeds Q2, with additional $28-30M expected in Q3/Q4 for property damage and business interruption.

**【Q&A Key Highlights】**
- **Working Capital**: Expect $100M+ release by March 2025, with minimal build for EAF scrap inventory ($30-50M). Full $200M+ release upon blast furnace shutdown.
- **Insurance Proceeds**: $60M+ property damage recovery by end-2024, business interruption claims pending.
- **Share Dilution**: Warrants callable at $18, with 1/3 dilution if settled in cash. No impact on basic shares due to net loss.
- **Plate Production**: Rebuilding strategic inventories for automotive and construction sectors, despite weak near-term demand.
- **EAF Costs**: <5% overrun expected, with 60% of time-and-materials work completed on budget. Cost per ton stable near $1,030/ton.

Algoma Steel (ASTL)-7 Nov 24-2025 Q2 Earnings call transcript

- **EAF Project On Track**: First steel production in Q2 2025, with no budget or timeline changes despite winter delays.
- **Financial Resilience**: $226 million cash and $587 million liquidity support project completion amid market volatility.
- **Plate Growth Momentum**: Q1 plate shipments up 25% YoY to 91,000 tons, Q2 targeting 100,000 tons.
- **Tariff Cost Clarity**: Q1 tariffs $10.5 million, Q2 expected near $60 million annually, with government engagement on U.S. trade policy critical.
- **Cost Optimization**: Targeting $10.20-$10.40/ton cost range in 2025, with utility costs declining post-winter.


**【CEO Summary Section】**
- **Market Challenges**: Q1 2025 results reflect global steel market volatility due to U.S. tariffs and Canadian trade policy, leading to lower realized prices and higher costs.
- **EAF Project Progress**: First steel production from the initial EAF expected in Q2 2025, with no material change to project cost or 2025 production targets. Shutdown of the least efficient coke battery planned for summer 2025.
- **Financial Strength**: $226 million cash and $587 million total liquidity as of Q1 2025, supporting completion of the $824 million EAF project.
- **Plate Production Growth**: Plate shipments reached 91,000 tons in Q1, up from 73,000 tons in Q3 2024, with Q2 expected to approach 100,000 tons.

**【CFO Financial Commentary】**
- **Revenue & EBITDA**: Steel revenue $463 million (down 18.5% YoY), adjusted EBITDA loss of $46.7 million (margin -9%).
- **Cost Drivers**: Cost per ton $1,137 (up 4% YoY) due to higher utility costs and tariffs. Q1 tariff costs $10.5 million, with Q2 expected near $60 million.
- **Cash Flow**: Operating cash flow $92.1 million, driven by $138 million inventory reduction YoY. Insurance proceeds of $50 million recognized in Q1.
- **Working Capital**: Achieved $100 million working capital release target between Q1 2024 and Q1 2025, with further optimization underway.

**【Q&A Key Takeaways】**
- **Shipments & Pricing**: Q2 shipments expected higher QoQ, with plate production approaching 100,000 tons. Canadian sheet pricing remains 25% below U.S. levels due to oversupply.
- **Tariff Impact**: Q1 tariffs $10.5 million, Q2 expected near $60 million annually. Government engagement on U.S. trade policy critical to resolving tariff uncertainty.
- **EAF Timeline**: First steel production in Q2 2025, second furnace startup by end-2025. No incremental debt planned; exploring government programs for tariff mitigation.
- **Cost Control**: Targeting $10.20-$10.40/ton cost range in 2025, with utility costs expected to decline post-harsh winter.


- **EAF Project Milestone**: First steel production in April 2025, with full 3 million ton capacity by end-2026.
- **Tariff Impact**: 20-25% price gap expected between U.S. and Canadian coil, but plate pricing up 30-35% post-tariff.
- **Financial Resilience**: $267M cash, $630M liquidity, and $100M working capital release by Q1 2025.
- **Plate Growth**: Q4 2024 shipments 82,000 tons → targeting 40,000 tons/month in 2025.
- **Cost Transformation**: EAF scrap costs $200-220/ton lower than blast furnace production.
- **Government Support**: $100M insurance payout and ongoing discussions for industry aid.


**【CEO Summary Section】**
- Fourth quarter 2024 results reflected challenging global steel market conditions, with lower realized prices and higher costs offsetting higher shipments. Adjusted EBITDA was a loss of $60.3 million, down from $319 million in 2023.
- The company remains on track to achieve first steel production at the new electric arc furnace (EAF) in April 2025, with cumulative project investment of $740 million as of December 2024. Full annual capacity of 3 million tons is expected when both furnaces are operational.
- Despite U.S. tariff uncertainties, the company maintains a strong balance sheet with $267 million in cash and $630 million in total liquidity.

**【CFO Financial Commentary】**
- Fourth quarter net sales realization averaged $976/ton, down 10% year-over-year due to weaker market conditions. Steel revenue was $536 million, down 3.8% YoY.
- Cost per ton of steel products sold remained stable at $1,032, but higher variable costs and lower shipment volumes drove a 7.4% increase in annualized costs.
- Cash used in operations was $77 million for the quarter, with expectations of $100 million working capital release by March 2025.

**【Q&A Key Highlights】**
- **Tariff Impact**: U.S. tariffs could create a 20-25% price differential between Canadian and U.S. coil, but plate pricing has already increased 30-35% post-tariff announcement. Canadian government tariffs on U.S. steel may reduce oversupply in Canada.
- **EAF Project**: Scrap-based EAF steelmaking is expected to reduce variable costs by $200-220/ton compared to blast furnace production. Full EAF conversion will lower overall cost structure by 2026.
- **Insurance Recovery**: $100 million insurance payout for 2023 blast furnace outage is expected to be fully received by year-end 2025, with $20-25 million disbursed in Q1 2025.
- **Plate Production**: Q4 2024 plate shipments reached 82,000 tons, with plans to ramp to 40,000 tons/month in 2025. Canada's only discrete plate producer position provides competitive advantage in defense and marine markets.
- **Government Support**: Ongoing discussions with federal and provincial governments about potential loans/grants to support steel industry resilience.

**【2025 Outlook】**
- EAF production expected to contribute 200,000+ tons in 2025, with significant ramp-up in H2. Total shipments projected at 2.1-2.2 million tons.
- Focus on optimizing mix between higher-margin plate (35,000+ tons/month) and coil products based on market demand and EAF utilization.
- Working capital reductions and insurance recovery will support cash flow despite near-term market headwinds.


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