The following is a summary of the Algoma Steel Group Inc. (ASTL) Q2 2025 Earnings Call Transcript:

Financial Performance:

• Adjusted EBITDA for Q2 was $4 million with a margin of 0.6%, reflecting continued soft market conditions.

• Revenue declined by 19% year-on-year to $539 million due to lower steel prices and shipments.

• Cash generated from operating activities was $25.4 million, ending the quarter with $452 million in cash.

• Steel shipments decreased by 5.2% to 520,000 net tons.

Business Progress:

• Progressed on the Electric Arc Furnace (EAF) project, expected to begin commissioning by year-end and first steel production by the end of the first quarter next year.

• Total investment in the EAF project reached $672 million, with over 90% tied to fixed-price contracts.

• Successfully increased plate shipments to 73,000 tons from 61,000 tons in the previous quarter despite challenging market conditions.

Opportunities:

• Expect to benefit from Ontario's Emissions Performance program, eligible for reimbursement for carbon taxes paid since 2022, enhancing balance sheet strength.

• Transition to EAF steelmaking supports becoming one of North America's greenest steel producers, potentially increasing annual capacity by 35% to 3 million tons.

Risks:

• The steel market is anticipated to remain weak in the near term, potentially impacting earnings due to depressed pricing and demand influenced by economic uncertainties including the U.S. election outcome.

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