January’s unscheduled three-week blast furnace shutdown hit Algoma Steel hard, cutting metal production by about 150,000 tons, the Sault Ste. Marie steelmaker disclosed June 20.
“As previously disclosed in January 2024, the company experienced an unplanned outage at its blast furnace in connection with a utility corridor collapse at its coke-making facility,” the company said in a news release announcing its fourth-quarter results.
“Management estimates the resultant outage negatively impacted hot metal production in the quarter by approximately 150,000 tons and reduced adjusted EBITDA by approximately $120 million to $130 million,” the release said.
EBITDA stands for “earnings before interest, tax, depreciation, and amortization.” It’s considered an important indicator of a company’s operating activities.
“Algoma has been working closely with relevant insurance providers as they complete assessments. The amount and timing of any potential recoveries under these insurance policies are still to be determined,” the news release said.
“Early in the quarter our operations were impacted by a utility corridor collapse at our coke-making facility that resulted in a blast furnace shutdown,” said Michael Garcia, Algoma Steel’s chief executive officer.
“It was thanks to the decisive and professional actions taken by the entire team that we were able to bring steel production back to near normal production levels in approximately three weeks.”
The Sault steelmaker reported:
consolidated fourth-quarter revenue of $620.6 million, compared to $677.4 million in the prior-year quarter;
consolidated income from operations of $3.1 million, compared to $21.7 million in the prior-year quarter;
net income of $28.0 million, compared to net loss of $20.4 million in the prior-year quarter;
adjusted EBITDA of $41.5 million and adjusted EBITDA margin of 6.7 per cent compared to $47.9 million and 7.1 per cent in the prior-year quarter;
cash flows generated from operations of $121.2 million, compared to $95.4 million in the prior-year quarter;
shipments of 450,966 tons, compared to 571,647 tons in the prior-year quarter; and
paid quarterly dividend of US$0.05/share.
“Fiscal 2025 marks a pivotal and exciting period for Algoma,” Garcia said in a written statement.
“We remain on track with our transformative electric arc furnace project and expect to begin commissioning activities by the end of calendar 2024, heralding a new era for our company. This transition will position Algoma as one of the greenest steel producers in North America, while simultaneously delivering long-term value to all our stakeholders.”
The company also released these full-year comparisons for the full fiscal years 2024 and 2023:
consolidated revenue of $2,795.8 million, compared to $2,778.5 million the prior year;
consolidated income from operations of $167.3 million, compared to $290.5 million the prior year;
net income of $105.2 million, compared to $298.5 million the prior year;
adjusted EBITDA of $312.7 million and adjusted EBITDA margin of 11.2 per cent compared to $452.3 million and 16.3 per cent the prior year;
cash flows generated from operations of $294.4 million, compared to $177.3 million the prior year; and
shipments of 2,085,465 tons, compared to 2,002,715 tons the prior year.
“During the quarter we issued an aggregate of US$350.0 million of 9.125 per cent senior secured second lien notes, enhancing the strength and flexibility of our balance sheet,” said Rajat Marwah, Algoma’s chief financial officer.
“This successful issuance reflects the positive view that credit investors have of our company and their confidence in our strategic direction and financial stability,” Marwah said.
Algoma Steel said it expects adjusted EBITDA of $30 million to $40 million and total steel shipments of 500,000 to 510,000 tons during the first quarter of fiscal 2025.
— SooToday
This article was published by: David Helwig
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