Algoma Steel Provides Fiscal 2022 Third Quarter Update
10 Januar 2022 - 1:30PM
Algoma Steel Group Inc. (NASDAQ: ASTL; TSX: ASTL) (“Algoma”), a
leading Canadian producer of hot and cold rolled steel sheet and
plate products, today announced that based on the current estimates
of Algoma’s Earnout Adjusted EBITDA (as defined in the Merger
Agreement with Legato Merger Corporation) for calendar year-end
2021, it is currently expected that all 37.5 million Algoma common
shares will be issued pursuant to the Earnout Rights as prescribed
in the Merger Agreement.
“We were pleased with the Company’s performance
during the quarter, with expected financial results in line with
our previous fiscal third quarter Adjusted EBITDA guidance, albeit
on lower than planned shipments of approximately 550,000 tons, as
compared to the previously issued guidance of 590,000 to 610,000
tons. Actual shipments were impacted by various issues including
increased holiday shutdowns by customers, logistical supply chain
constraints, and COVID-related challenges. As a result, our steel
inventory has increased, and we expect to ship these deferred tons
over the next two fiscal quarters. Algoma’s high percentage of
contract business offers stability during periods of volatility and
this, combined with the strong demand and improving pricing we are
seeing for our plate products, has positioned us well to continue
delivering strong results to our shareholders,” said Michael
McQuade, Algoma’s Chief Executive Officer.
About Algoma Steel Inc.
Based in Sault Ste. Marie, Ontario, Canada,
Algoma is a fully integrated producer of hot and cold rolled steel
products including sheet and plate. With a current raw steel
production capacity of an estimated 2.8 million tons per year,
Algoma’s size and diverse capabilities enable it to deliver
responsive, customer-driven product solutions straight from the
ladle to direct applications in the automotive, construction,
energy, defense, and manufacturing sectors. Algoma is a key
supplier of steel products to customers in Canada and Midwest USA
and is the only producer of plate steel products in Canada.
Algoma’s mill is one of the lowest cost producers of hot rolled
sheet steel (HRC) in North America owing in part to its
state-of-the-art Direct Strip Production Complex (“DSPC”), which is
the newest thin slab caster in North America with direct coupling
to a basic oxygen furnace (BOF) melt shop.
Algoma has achieved several meaningful
improvements over the last several years that are expected to
result in enhanced long-term profitability for the business. Algoma
has upgraded its DSPC facility and recently installed its No. 2
Ladle Metallurgy Furnace. Additionally, Algoma has cost cutting
initiatives underway and is in the process of modernizing its plate
mill facilities.
Today Algoma is returning to its roots as a
customer-focused, entrepreneurial company with the courage and
growing capability to meet the industry’s challenges head-on. It is
investing in its people and processes, optimizing and modernizing
so that it will continue to be your partner in steel.
Cautionary Statement Regarding Forward-Looking
Statements
This news release contains “forward-looking
information” under applicable Canadian securities legislation and
“forward-looking statements” within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995 (collectively, “forward
looking statements”). These forward-looking statements generally
are identified by the words “believe,” “project,” “expect,”
“anticipate,” “estimate,” “intend,” “strategy,” “future,”
“opportunity,” “plan,” “pipeline,” “may,” “should,” “will,”
“would,” “will be,” “will continue,” “will likely result,” and
similar expressions, and include statements regarding the company’s
expected Adjusted EBITDA, the issuance of shares pursuant to the
Earnout Rights, the company’s ability to ship additional steel
inventory over the next two fiscal quarters and that the timing of
such shipments are not expected to impact realized price per ton.
Forward-looking statements are predictions, projections and other
statements about future events that are based on current
expectations and assumptions. Many factors could cause actual
future events to differ materially from the forward-looking
statements in this document, including but not limited to: the risk
that the benefits of the recently completed merger may not be
realized; the risks that Algoma will be unable to realize its
business plans, including its proposed transformation journey and
development of its supply chain; the risks associated with the
steel industry generally; and changes in general economic
conditions, including as a result of the COVID-19 pandemic. The
foregoing list of factors is not exhaustive and readers should also
consider the other risks and uncertainties set forth in the section
entitled “Risk Factors” and “Cautionary Note Regarding
Forward-Looking Statements” in Algoma’s public filings, including
the registration statement on Form S-1 filed by Algoma with the
Securities and Exchange Commission and the prospectus filed with
the Ontario Securities Commission. Forward-looking statements speak
only as of the date they are made. Readers are cautioned not to put
undue reliance on forward-looking statements, and Algoma assumes no
obligation and does not intend to update or revise these
forward-looking statements, whether as a result of new information,
future events, or otherwise.
For more information, please contact:
Mike MoracaDirector - TreasuryAlgoma Steel Inc. Phone:
705.945.3300E-mail: IR@algoma.com
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