Algoma Steel Group Reports Financial Results for the Three and Nine Months Ended December 31, 2024
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 12 2025
0mins
Should l Buy ASTL?
Source: Newsfilter
Financial Performance Overview: Algoma Steel Group reported a consolidated revenue of $590.3 million for Q4 2024, down from $615.4 million in the previous year, with a net loss of $66.5 million compared to a loss of $84.8 million in Q4 2023. The full year saw a significant decline in revenue and an operating loss of $217.8 million, attributed to reduced shipping volumes and lower selling prices.
Electric Arc Furnace Project Update: The company is on track to commence steel production using its new Electric Arc Furnace (EAF) technology in April 2025, which aims to enhance production capacity and reduce carbon emissions by approximately 70%. Despite challenges from tariffs and market uncertainties, Algoma remains optimistic about its transition to greener steel production.
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Analyst Views on ASTL
Wall Street analysts forecast ASTL stock price to rise
3 Analyst Rating
1 Buy
2 Hold
0 Sell
Moderate Buy
Current: 4.300
Low
4.43
Averages
5.79
High
8.49
Current: 4.300
Low
4.43
Averages
5.79
High
8.49
About ASTL
Algoma Steel Group Inc. is a Canada-based integrated producer of hot and cold rolled steel products including sheet and plate. The Company delivers responsive, customer-driven product solutions for applications in the automotive, construction, energy, defense, and manufacturing sectors. It is a key supplier of steel products to customers in North America and is the producer of discrete plate products in Canada. The Company offers a wide range of steel plate products, which include AR225, Heat Treated Plate, AlgoLaser, AlgoGrip, and The Heavies. Its sheet products include Hot Rolled Sheet - DSPC, AR200, and Cold Rolled Sheet. The Company has a raw steel production capacity of an estimated over 2.8 million liquid tons per year. Its Direct Strip Production Complex is a continuous casting and rolling mill, producing high-quality hot-rolled sheet steel directly from liquid steel. The Company also generates by-products from its operations.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Stock Surge: Algoma Steel (ASTL) saw an 11.1% increase in Friday's trading, primarily driven by reports of Trump considering rolling back steel and aluminum tariffs, indicating a positive market reaction to potential policy changes.
- Tariff Impact: Trump's 50% tariffs on imported steel and aluminum aim to curb the flow of Chinese metals, yet U.S. Commerce Department officials believe these tariffs are raising consumer prices for goods like auto parts and food cans, highlighting a conflict between trade policy and consumer interests.
- Market Response: Unlike U.S. steelmakers, Algoma Steel's shares surged on the potential tariff rollback news, although the stock remains down 45% from a year ago, reflecting ongoing pressures from tariffs and duties imposed by its largest trading partner.
- Competitive Pressure: In the U.S. market, Steel Dynamics (STLD) and Nucor (NUE) fell by 3.4% and 2.6%, respectively, illustrating the negative impact of tariff policies on the industry, while Algoma Steel's rise underscores its relative advantage in the current environment.
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- Funding Allocation Details: Of the committed C$345 million, approximately C$275 million is earmarked for the development of the beam mill, while the remaining funds will support Algoma Steel's other products, indicating a strategic focus on product diversification.
- Sales Revenue Sharing Terms: The agreement stipulates that Algoma Steel will make annual payments to Hanwha Ocean equal to 3% of the net sales from the beam mill for 10 years post-operation, which will directly impact the company's cash flow and profitability.
- Project Dependency: The effectiveness of the MOU is contingent upon Hanwha winning an order to build up to 12 submarines for the Royal Canadian Navy, emphasizing the close ties to government projects and commitment to local investment.
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- Long-Term Momentum: The stock gained 4.7% over the past 12 weeks, indicating not only strong short-term performance but also sustained upward potential, making it suitable for long-term momentum investors.
- Momentum Score: With a Momentum Score of B, Algoma Steel is positioned as an attractive entry point for investors, suggesting a high probability of success and drawing further market attention.
- Reasonable Valuation: Despite its fast-paced momentum, Algoma Steel trades at a Price-to-Sales ratio of just 0.31, meaning investors pay only 31 cents for each dollar of sales, indicating significant room for growth.
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- Bullish Forecasts: The brokerage rates Nvidia and Micron as ‘Outperform’, expecting Nvidia to benefit from gradually slowing hyperscaler capital expenditures, while Micron may gain strong profits due to a memory chip shortage.
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- List of Affected Companies: Companies such as American Battery Technology Company (ABAT), Algoma Steel Group Inc. (ASTL), and Eastman Chemical Company (EMN) have all received an 'F' grade, highlighting serious challenges in their earnings momentum.
- Market Impact Assessment: The poor EPS revision grades of these companies could adversely affect their stock performance, prompting investors to carefully assess associated risks, especially during the earnings season when market sensitivity to earnings is heightened.
- Industry Outlook: With the earnings season underway, the overall performance of the materials sector may be dragged down by these low-rated companies, leading investors to seek out better-performing firms within the industry for potential investment opportunities.
See More
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- Shipment Guidance: Algoma Steel anticipates total steel shipments for Q4 2025 to be between 375,000 and 380,000 tons, reflecting ongoing challenges in the market due to steel tariffs.
- Adjusted EBITDA Outlook: The company expects an Adjusted EBITDA in the range of negative CAD 95 million to negative CAD 105 million, indicating significant financial pressure during its transition phase.
- EAF Project Progress: The first unit of Algoma's Electric Arc Furnace (EAF) project is now operating six days a week, demonstrating positive advancements in the company's shift towards more sustainable steel production.
- Strategic Alignment: Algoma's transformation aligns with Canada's national interests by enhancing domestic steelmaking capacity and supporting critical infrastructure, showcasing the company's proactive approach to future market demands.
See More
Trump Considers Rolling Back Steel and Aluminum Tariffs, Boosting Algoma Steel Shares
- Stock Surge: Algoma Steel (ASTL) saw an 11.1% increase in Friday's trading, primarily driven by reports of Trump considering rolling back steel and aluminum tariffs, indicating a positive market reaction to potential policy changes.
- Tariff Impact: Trump's 50% tariffs on imported steel and aluminum aim to curb the flow of Chinese metals, yet U.S. Commerce Department officials believe these tariffs are raising consumer prices for goods like auto parts and food cans, highlighting a conflict between trade policy and consumer interests.
- Market Response: Unlike U.S. steelmakers, Algoma Steel's shares surged on the potential tariff rollback news, although the stock remains down 45% from a year ago, reflecting ongoing pressures from tariffs and duties imposed by its largest trading partner.
- Competitive Pressure: In the U.S. market, Steel Dynamics (STLD) and Nucor (NUE) fell by 3.4% and 2.6%, respectively, illustrating the negative impact of tariff policies on the industry, while Algoma Steel's rise underscores its relative advantage in the current environment.
See More
Algoma Steel Signs MOU with Hanwha Ocean for C$345M Investment
- Investment Agreement Signed: Algoma Steel's memorandum of understanding with Hanwha Ocean secures up to C$345 million (US$250 million) for a new structural steel beam mill in Ontario, reflecting strong confidence in future production capacity expansion.
- Funding Allocation Details: Of the committed C$345 million, approximately C$275 million is earmarked for the development of the beam mill, while the remaining funds will support Algoma Steel's other products, indicating a strategic focus on product diversification.
- Sales Revenue Sharing Terms: The agreement stipulates that Algoma Steel will make annual payments to Hanwha Ocean equal to 3% of the net sales from the beam mill for 10 years post-operation, which will directly impact the company's cash flow and profitability.
- Project Dependency: The effectiveness of the MOU is contingent upon Hanwha winning an order to build up to 12 submarines for the Royal Canadian Navy, emphasizing the close ties to government projects and commitment to local investment.
See More
Algoma Steel Group Inc. (ASTL) Stock Rises 7.8%, Ideal for Momentum Investing
- Price Increase: Algoma Steel Group's stock has risen 7.8% over the past four weeks, reflecting growing investor interest and enhancing its market appeal.
- Long-Term Momentum: The stock gained 4.7% over the past 12 weeks, indicating not only strong short-term performance but also sustained upward potential, making it suitable for long-term momentum investors.
- Momentum Score: With a Momentum Score of B, Algoma Steel is positioned as an attractive entry point for investors, suggesting a high probability of success and drawing further market attention.
- Reasonable Valuation: Despite its fast-paced momentum, Algoma Steel trades at a Price-to-Sales ratio of just 0.31, meaning investors pay only 31 cents for each dollar of sales, indicating significant room for growth.
See More
RBC Capital Markets Initiates Semiconductor Coverage, Bullish on Nvidia and Others
- Coverage Initiation: RBC Capital Markets has initiated coverage on the semiconductor sector, assigning a ‘Sector Perform’ rating to most legacy chipmakers like Intel and AMD, citing a lack of near-term catalysts that could impact their stock performance.
- Bullish Forecasts: The brokerage rates Nvidia and Micron as ‘Outperform’, expecting Nvidia to benefit from gradually slowing hyperscaler capital expenditures, while Micron may gain strong profits due to a memory chip shortage.
- Stock Price Targets: RBC has set optimistic price targets for Arm, Astera Labs, and Marvell at $140, $225, and $105 respectively, anticipating these companies will benefit from data center growth and collaborations with Amazon.
- Dim Outlook for Legacy Chipmakers: While RBC expresses caution regarding the prospects of legacy chipmakers like Intel and AMD due to a lack of catalysts, it remains optimistic about the growth potential of emerging companies, reflecting market preference for innovative technologies.
See More
Multiple Material Stocks Receive 'F' EPS Revision Grades, Indicating Weak Earnings Momentum
- EPS Revision Grade Analysis: As the earnings season approaches, an analysis reveals that several mid to low cap material stocks have received an 'F' EPS revision grade, indicating significant downward pressure on future earnings expectations, which may lead to decreased investor confidence.
- List of Affected Companies: Companies such as American Battery Technology Company (ABAT), Algoma Steel Group Inc. (ASTL), and Eastman Chemical Company (EMN) have all received an 'F' grade, highlighting serious challenges in their earnings momentum.
- Market Impact Assessment: The poor EPS revision grades of these companies could adversely affect their stock performance, prompting investors to carefully assess associated risks, especially during the earnings season when market sensitivity to earnings is heightened.
- Industry Outlook: With the earnings season underway, the overall performance of the materials sector may be dragged down by these low-rated companies, leading investors to seek out better-performing firms within the industry for potential investment opportunities.
See More
Algoma Steel Projects Q4 2025 Shipments of 375K to 380K Tons
- Shipment Guidance: Algoma Steel anticipates total steel shipments for Q4 2025 to be between 375,000 and 380,000 tons, reflecting ongoing challenges in the market due to steel tariffs.
- Adjusted EBITDA Outlook: The company expects an Adjusted EBITDA in the range of negative CAD 95 million to negative CAD 105 million, indicating significant financial pressure during its transition phase.
- EAF Project Progress: The first unit of Algoma's Electric Arc Furnace (EAF) project is now operating six days a week, demonstrating positive advancements in the company's shift towards more sustainable steel production.
- Strategic Alignment: Algoma's transformation aligns with Canada's national interests by enhancing domestic steelmaking capacity and supporting critical infrastructure, showcasing the company's proactive approach to future market demands.
See More
