Lower Prices, Shipments Likely to Dent Algoma Q3 Earnings
01/11/2023 - Canada’s Algoma Steel Inc. said Tuesday it expects to report a fiscal Q3 adjusted loss before interest, taxes, depreciation and amortization of between CA$35 million and CA$45 million due to lower plate shipments, softer steel prices and routine, seasonal maintenance work.
The company had said during its Q2 earnings call in November 2022 that planned maintenance work was underway and that those projects, coupled with commissioning related to its plate mill modernization, would impact results.
“Despite a return to more typical levels of unfinished plate production, total plate shipments were adversely impacted by temporary downstream finishing constraints as we ramped up plate production,” Algoma chief executive Michael Garcia said in the company’s Q3 earnings guidance.
However, he said the plate mill has now resumed normal production.
“We expect to return to more normalized shipments in calendar 2023, and to apply the lessons learned during phase one of the Plate Mill Modernization to our future capital projects. This will reflect the more robust earning power of Algoma,” he said.
Garcia also said the company’s electric arc furnace installation remains on budget and on schedule to begin producing steel in calendar 2024.
