In This Article:
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Adjusted EBITDA: $4 million, reflecting an adjusted EBITDA margin of 0.6%.
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Cash Generated from Operating Activities: $25.4 million.
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Cash and Total Liquidity: $452 million in cash and total liquidity of approximately $800 million.
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Steel Revenue: $539 million, down 19% versus the prior year period.
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Steel Shipments: 520,000 net tons, down 5.2% versus the prior year quarter.
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Net Sales Realization: $1,036 per ton, down 14.6% versus the prior year period.
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Cost per Ton of Steel Products Sold: $1,032, up 1.1% versus the prior year period.
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Inventory: $793 million, down from $808 million at the end of the 2024 fiscal year.
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Insurance Proceeds: Approximately $32 million received related to property damage.
Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Algoma Steel Group Inc (NASDAQ:ASTL) delivered solid operational performance despite challenging global steel market conditions.
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The company maintains a strong balance sheet with over $450 million in cash and total liquidity of $800 million.
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Algoma Steel Group Inc (NASDAQ:ASTL) is on track with its transformative Electric Arc Furnace (EAF) project, with commissioning activities expected to begin by the end of the calendar year.
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The company has derisked the EAF project by contracting substantially all remaining items, with over 90% tied to fixed-price contracts.
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Algoma Steel Group Inc (NASDAQ:ASTL) is eligible for reimbursement under Ontario's emissions performance program, which will enhance its balance sheet and liquidity.
Negative Points
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The company experienced a decline in revenues, adjusted EBITDA, and cash flow generation due to softer realized steel prices and lower shipments.
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Market conditions remain challenging with no clear signals of improvement in the near term, impacting expected plate shipments.
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Steel revenue decreased by 19% compared to the prior year period, with shipments down 5.2%.
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Net sales realization per ton decreased by 14.6% versus the prior year period, reflecting weaker market conditions.
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The company faces headwinds from current steel prices, which are expected to continue impacting earnings performance.
Q & A Highlights
Q: Can you clarify the expected working capital build-up for the current quarter and how it relates to the EAF start-up? A: Rajat Marwah, CFO: The EAF start-up will begin at the end of March, so we are not building much material specifically for it. Normally, we build up around $150 million by December, but this year it will be lower, around $100 million. We expect a release of at least $100 million of total working capital by March 2025. During the transition to EAF, we may see a slight build-up, but eventually, we will see a release of at least $100 million when the blast furnace and coke batteries are shut down.