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Algoma Steel’s fearless fiscal fourth-quarter forecast

Sault steelmaker irons out plate mill problems as steel prices ride nine-month high
(Algoma Steel photo)

With North American steel prices trending north and the plate mill running smoother, Algoma Steel has high hopes for its fiscal fourth quarter.

The Sault Ste. Marie sheet and plate maker expects steel shipments during the quarter to be in the range of 555,000 to 565,000 tons, up from 458,341 tons in the third quarter and 435,000 tons in the second.

The company put out a news release on its guidance for the fourth quarter, which ended March 31. But it’ll be likely a couple of months before Algoma officially announces its fourth quarter and year-round results 

Algoma's 2023 fiscal year runs from April 1 to March 31.

The company said its Adjusted EBITDA is expected to be in the range of $25 million to $30 million.

EBITDA, which stands for earnings before interest, taxes, depreciation, and amortization, is a metric used to assess a company’s profitability.

“We anticipate that our shipments for the fourth fiscal quarter will align with our earlier projections now that our plate mill has returned to its historical production levels,” said Algoma CEO Michael Garcia in a March 30 news release.

“As expected, our Adjusted EBITDA is directionally higher compared to the December quarter, due to lower costs resulting from stable operations and increased productivity.

“We are pleased to note that steel prices are presently at a nine-month high. Attractive market conditions, combined with our consistent operations, are likely to significantly enhance our profitability as we head into fiscal 2024.”

Algoma's $703-million electric arc furnace project, currently under construction, remains on schedule for a 2024-mid year startup. EllisDon is the construction manager, Danieli is supplying the technology.  

“We are excited about the progress made so far on our strategic electric arc furnace project as the building gets erected shaping the skyline of our steelworks. While this marks a key milestone, we continue to diligently execute the project on time and on budget as we work towards our goal of a mid-2024 start up,” added Garcia.