===Algoma Steel (ASTL) reported earnings on Thur 20 June 24 (a/h)

 

• Algoma Steel (ASTL), a Canada-based steel producer, is heading lower following its Q4 (Mar) earnings results last night. The company was profitable, but revenue fell 8.4% yr/yr to $620.6 mln. Adjusted EBITDA in Q4 fell 13.4% yr/yr to $41.5 mln, but that was above prior guidance of $30-40 mln.
• Results in the quarter were hurt by a previously-disclosed utility corridor collapse at its coke-making facility. This resulted in a blast furnace shutdown. The silver lining was that steel production was brought back to near normal production levels in approximately three weeks.
• An interesting thing about Algoma is that it's in the process of transforming from being an integrated producer into being a mini-mill. As such, it's constructing two new state-of-the-art electric arc furnaces (EAF) to replace its existing blast furnace and basic oxygen steelmaking operations. Mini-mills are seen as much more efficient in terms of steel production. Algoma said it remains on track and expects to begin commissioning activities by the end of calendar 2024.
• Despite the adjusted EBITDA upside top guidance, the stock is heading lower. Investors may be disappointed with the Q1 (Jun) adjusted EBITDA guidance of $30-40 mln, which would be a sequential decline.