Algoma Steel Group (ASTL) Q4 2024 earnings summary

Executive summary

• Q4 and FY2024 results were impacted by a major operational disruption from a coke-making utility corridor collapse, causing a blast furnace outage and an estimated $120–$130M negative EBITDA impact and approximately 150,000 tons of lost production.

• Plate mill modernization was completed, with ramp-up underway and production expected to reach 90,000 tons in the next quarter and annual capacity targeted at 650,000+ tons.

• Strategic exit from the wide coil market to focus on plate products, aiming for margin enhancement.

• Electric Arc Furnace (EAF) project is on track, with commissioning expected by late 2024 and full ramp-up in 2025; cumulative spending reached $563M, with a total budget of $825M–$875M.

• Net income for Q4 was $28M, reversing a prior-year loss; full-year net income was $105M, down from $298.5M.

Financial highlights

• Q4 Adjusted EBITDA was $41.5M (6.7% margin); Q4 net income margin was 4.5%; Q4 steel shipments were 451,000 tons, down 21.1% year-over-year.

• Q4 steel revenue was $568M, down 6.7% year-over-year; net sales realization was $1,260/ton, up 18.2%; cost per ton was $1,091, up 17% year-over-year.

• FY2024 Adjusted EBITDA was $313M (11.2% margin), down from $452M (16.3%) in FY2023; full-year steel revenue was $2.5B, flat year-over-year; shipments rose 4.1% to 2.1M tons.

• Q4 cash flow from operations was $121.2M, up from $95.4M; full-year cash flow from operations was $294.4M, up from $177.3M.

• Q4 EPS was $0.26 (basic); full-year EPS was $0.97, down from $2.43.

Outlook and guidance

• Q1 FY2025 Adjusted EBITDA expected between $30M–$40M; shipments projected at 500,000–510,000 tons.

• Plate mill production expected to reach 90,000 tons in Q1 FY2025, with annual run rate capacity targeted at 650,000+ tons.

• EAF commissioning to begin late 2024, with production ramping up through 2025 and a targeted 70% reduction in annual carbon emissions.

• Modest improvement in steel prices anticipated, but ongoing inflationary and supply chain pressures persist.

• Normalized quarterly shipment volume expected to be 550,000 tons as EAF stabilizes.