Algoma Steel Group (ASTL) Q1 2026 earnings summary

Executive summary

• Completed transition to 100% electric arc furnace (EAF) steel production, ending 125 years of coal-based operations and permanently decommissioning blast furnace and coke-making facilities in January 2026.

• Q1 2026 marked by significant operational and financial changes, including lower shipments and revenue but improved adjusted EBITDA compared to prior quarters, with a strategic focus on higher-value plate products and reduced coil production.

• Record plate sales of 116,000 net tons achieved, positioning the company as Canada’s only discrete plate producer and supporting key industries such as defence, infrastructure, and energy.

• Strategic initiatives include a joint venture for ballistic steel production and a binding MoU for a structural beam mill, reinforcing supply chain resilience and national priorities.

• EAF Unit 1 fully operational; EAF Unit 2 nearing completion with production expected in Q3 2026.

Financial highlights

• Q1 2026 shipping volume was 224,000 net tons, down 52.4% year-over-year due to the EAF transition.

• Steel revenue was $266.9 million, down 42.4% year-over-year, with average net sales realization up 21% to $1,193/ton, driven by a shift to plate products.

• Adjusted EBITDA loss of $28.7 million (margin -9.7%), improved from a $46.7 million loss (margin -9%) in Q1 2025.

• Net loss was $159.4 million, compared to $24.5 million in Q1 2025, impacted by lower shipments, higher tariffs, and absence of prior year insurance proceeds.

• Ended Q1 with $65.3 million in cash and $553 million in total available liquidity.

Outlook and guidance

• Capacity utilization charges of $90.2 million in Q1 2026 expected to decline and be eliminated by Q4 as EAF ramp-up continues.

• Path to breakeven EBITDA anticipated by Q4 2026, with cost structure improving as volumes increase and transition costs drop off.

• Plate production and sales expected to increase sequentially through 2026, with EAF Unit 2 coming online and a projected annual raw steel capacity of 3.7 million tons.

• EAF transformation expected to reduce emissions by 70% and improve GHG performance.

• Focus on operational improvements and capital projects to enhance long-term performance.