ASTL · Algoma Steel Group Inc.

Algoma Steel Group Inc. completed its pivotal transition to electric arc furnace (EAF) steelmaking in Q1 2026, permanently closing its blast furnace on January 18 after 125 years of operation. This shift drove financial results, with revenue declining 42.6% to $296.9 million from $517.1 million in Q1 2025, primarily due to 52.4% lower shipments of 223,681 tons versus 469,731 tons, reflecting EAF ramp-up and a strategic pivot to the Canadian plate market amid adverse U.S. tariffs. Steel revenue was $266.9 million, with average net sales realization per ton rising to $1,193 from $986, supported by improved product mix and record plate sales of 116,000 NT. Operating loss widened to $153.5 million, including a $90.2 million capacity utilization charge from excess fixed costs during transition, though partially offset by lower administrative expenses. Net loss reached $159.4 million, versus $24.5 million prior year, impacted by absent $50 million insurance proceeds, higher direct tariff costs of $27.4 million (up from $10.5 million), and reduced tax recovery. Adjusted EBITDA loss narrowed to $28.7 million (-9.7% margin) from $46.7 million (-9.0%), with management noting sequential improvement from Q4 2025 due to 11% higher average net sales realization. Cost per ton rose to $1,180 from $1,137, reflecting tariffs and lower volume absorption. CEO Rajat Marwah highlighted EAF Unit 1's 24/7 operations producing Volta low-carbon steel at scale, with plate mill upside and strategic ventures like Roshel Algoma Defence JV and Hanwha Ocean MOU for defence supply chains. CFO Michael Moraca emphasized declining transition charges, EAF Unit 2 commissioning in Q3 2026, and strong $553 million liquidity to pursue growth. U.S. shipments dropped to 28% of volumes from 45-55% historical, underscoring Canadian market focus where Algoma holds unique discrete plate position.