Algoma Steel Group (ASTL) Q2 2025 earnings summary

Executive summary

• Achieved first steel production from the Electric Arc Furnace (EAF) project in early July 2025, marking a major milestone in decarbonization and green steelmaking efforts.

• Q2 2025 performance was in line with internal expectations despite challenging global steel markets, with steel revenue of $534M–$589.7M, down 10.5%–11% year-over-year and shipments of 472,000–472,056 tons, down 6% year-over-year.

• Net loss of $110.6M–$111M, a significant decline from net income of $6.1M in the prior year quarter, driven by lower shipments, pricing, and tariff costs.

• Liquidity position ended the quarter at $82.5M–$83M in cash and $329M available under the revolving credit facility, with ongoing efforts to secure additional government support.

• Strategic focus on ramping up EAF, diversifying the customer base, and targeting domestic sectors like defense and infrastructure.

Financial highlights

• Adjusted EBITDA loss of $32M–$32.4M, with an adjusted EBITDA margin of -5.5%.

• Steel revenue of $534M–$589.7M, down 10.5%–11% year-over-year.

• Steel shipments of 472,000–472,056 tons, a 6% decline versus the prior year quarter.

• Cash used in operations totaled $37.9M–$38M for the quarter.

• Tariff costs totaled $64.1M in the quarter, with U.S. shipments representing 54% of total volumes.

Outlook and guidance

• No change to EAF project CapEx guidance; most remaining spend expected by year-end, with some into next year.

• EAF transformation expected to provide a structural cost advantage and reduce annual carbon emissions by approximately 70%.

• Finished steel output expected to rise to 2.4–2.5M tons during transition, reaching 3.0M–3.7M tons post-2027.

• Shipments and production levels expected to remain stable in Q3 and Q4, barring major market changes.

• Company is exploring liquidity tools, including a $500M application to the federal Large Enterprise Tariff Loan (LETL) program.