Algoma Steel Group (ASTL) Q1 2025 earnings summary

Executive summary

• Q1 2025 results reflect challenging global steel market conditions, with lower realized pricing, higher production costs, and ongoing tariff and trade policy uncertainty.

• Plate production ramped up to 91,000 tons, with expectations for further increases in Q2 as the company leverages its position as Canada's only discrete plate producer.

• The Electric Arc Furnace (EAF) project advanced, with first steel production from the initial EAF expected in Q2 2025 and no material change to project cost or production expectations.

• Net loss of $24.5 million, compared to net income of $28 million in Q1 2024, driven by lower realized pricing and higher input costs.

• Balance sheet remains strong, with cash at quarter end of $226.5 million and total liquidity of $587 million.

Financial highlights

• Adjusted EBITDA loss of $46.7 million, with an adjusted EBITDA margin of -9%.

• Steel revenue was $463 million, down 18.5% year-over-year, driven by lower realized selling prices despite higher shipments.

• Cost per ton of steel products sold averaged $1,137, up 4% year-over-year due to higher utility costs and tariffs.

• Cash generated by operating activities was $92.1 million, down from $121 million in the prior year period.

• Net loss per diluted share was ($0.48) for Q1 2025.

Outlook and guidance

• First steel production from EAF expected in Q2 2025, with EAF 2 production by end of 2025 and no material change to project cost or 2025 production targets.

• EAF transition expected to reduce annual carbon emissions by approximately 70% and align raw steel capacity with finishing capacity at 3.7 million tons.

• Q2 2025 shipments and plate production expected to be higher quarter-over-quarter, with plate approaching 100,000 tons.

• Cost of production expected to decrease to $1,020–$1,040 per ton as utility costs normalize.

• Tariff costs expected to rise significantly in Q2, potentially reaching $60 million for the quarter.