Algoma Steel Group Inc. Reports Financial Results for the Three and Twelve Months Ended December 31, 2025

Executive Summary

• Algoma Steel reported Q4 2025 revenue of C$455.0 M and a net loss of C$364.7 M, widening dramatically versus the prior‑year quarter.
• The company completed shutdown of its blast furnace and coke ovens, moving to 24‑hour operation of its new electric arc furnace (EAF), positioning for ~3.7 M t/yr raw steel capacity and a ~70 % reduction in carbon emissions.
• A C$500 M government‑backed Large Enterprise Tariff Loan (LETL) facility was secured, and a binding MOU with Hanwha Ocean was announced, potentially delivering up to US$250 M of future revenue.

Key Details

• Financial Performance – Q4 2025
• Revenue: C$455.0 M vs. C$590.3 M YoY.
• Loss from operations: C$449.7 M vs. C$124.8 M YoY.
• Net loss: C$364.7 M vs. C$66.5 M YoY.
• Adjusted EBITDA loss: C$95.2 M; margin (20.9 %).

• Shipments: 378,533 t (‑31 % YoY).

• Full‑Year 2025 Results

• Revenue: C$2,085.7 M vs. C$2,461.7 M YoY.
• Net loss: C$984.9 M vs. C$139.0 M YoY.

• Adjusted EBITDA loss: C$261.4 M; margin (12.5 %).

• EAF Transition

• First arc and steel production achieved July 2025; Q4 operated on a continuous 24‑hour schedule.
• All liquid steel now produced from the EAF; blast furnace/coke oven shutdown completed shortly after 31 Dec 2025.
• Expected post‑transition capacity: ~3.7 M t/yr raw steel, matching downstream finishing capacity.

• Anticipated carbon emissions reduction: ≈70 % versus pre‑EAF levels.

• Trade Environment

• U.S. Section 232 tariffs (50 % on Canadian steel) reduced U.S. market access; tariff cost $60.6 M in Q4 and $225.0 M for the year.

• Domestic pricing pressure lowered revenue by ≈C$27.0 M in Q4.

• Liquidity & Financing

• Secured C$500 M government‑backed LETL facility (federal + Ontario) in Nov 2025; provides near‑term financial flexibility.

• Cash at quarter end: C$77.5 M; unused revolving credit: C$194.5 M; LETL draw capacity: C$417 M.

• Strategic MOU

• Binding memorandum with Hanwha Ocean (Korea) – up to US$250 M total value: US$200 M contribution toward a structural‑steel beam mill and up to US$50 M of product purchases linked to the Canadian Patrol Submarine Project, subject to contract award and definitive agreements.

• Outlook & Guidance

• Management expects continued ramp‑up of EAF output, further reduction in operating costs, and improved cash efficiency as blast furnace operations cease.
• No specific quantitative guidance provided; forward‑looking statements emphasize reliance on the LETL facility and diversification initiatives.

Notable Quotes

• Rajat Marwah – CEO: Emphasized the strategic importance of completing the EAF transition and positioning Algoma as Canada’s sole discrete plate producer with a sustainable steel platform.
• Michael Moraca – CFO: Highlighted that the C$500 M LETL facility strengthens balance‑sheet flexibility to support the transformation and pursue new growth opportunities.