Algoma Steel is rolling in more than just plate and sheet production these days.
The Sault Ste. Marie steel company posted consolidated revenue of $1.01 billion in the second quarter of its 2022 fiscal year, and recorded a $288.2-million profit.
CEO Michael McQuade called 2021 calendar year "an incredible journey." He anticipates the final three months of this year to be "truly transformative" for the 120-year industrial cornerstone of this city.
McQuade said Algoma's board has given further approval to plan to retire the company's US$358 million in long-term debt that will leave the company on more solid financial ground "to make ritical investments in our business that we expect will drive sales and create additional long-term value for our stakeholders.”
The second quarter revenue totalled $1.01 billion, up 168 per cent from $377 million recorded in the same period in 2020. Steel revenue was $936.5 million, up 179 per cent from $335.3 million during the same quarter last year.
Algoma attributes the boosted balance sheet to an increase in the selling price of steel, but partially offset by an increase in price from raw material inputs, such as iron ore, scrap and alloys.
Adjusted EBITDA in the second quarter was $430.6 million.
The average realized price of steel net of freight and non-steel revenue was $1,594 per ton, up 146 per cent from $649 per ton in second quarter of 2020. The cost per ton of steel products sold was $857, up 37 per cent from $626 in the quarter 2020. Steel shipments for the second quarter increased by 14 per cent to 587,340 tons, compared to 516,294 tons from the same time last year.
“Our financial results for the fiscal second quarter demonstrate continued solid execution by our team, generating record revenue, Adjusted EBITDA, and cash flows due in part to the combination of higher realized steel prices and ongoing cost containment initiatives," said McQuade.
"These results contributed to our strong liquidity, which has positioned us to make two additional strategic announcements that we believe will increase value to our shareholders and provide competitive strategic growth."