Algoma Steel Q2 revenue falls; suspends quarterly dividend pay

Overview

• Algoma Steel Q2 revenue falls to C$589.7 mln from C$650.5 mln year ago

• Net loss of C$110.6 mln, compared to net income of C$6.1 mln year ago

• Adjusted EBITDA loss of C$32.4 mln, down from C$37.7 mln profit

• Algoma suspends quarterly dividend amid market uncertainty

Outlook

• Company expects EAF project to reduce annual carbon emissions by 70%

• Company anticipates EAF project to provide structural cost advantage

Result Drivers

• TARIFF IMPACT - Algoma's financial performance affected by Section 232 tariffs, leading to lower steel prices and higher costs

• MARKET CONDITIONS - Weak steel market demand and pricing pressures contributed to lower revenue and net loss

• EAF TRANSITION - First steel production from Electric Arc Furnace marks strategic shift to lower-cost green steel production

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

• Wall Street's median 12-month price target for Algoma Steel Group Inc is C$11.50, about 30.1% above its July 29 closing price of C$8.04

Press Release: ID:nGNXbPyxHd