Earnings call transcript: Algoma Steel Q3 2025 misses EPS, stock dips 5%

Algoma Steel Group Inc. (NASDAQ:ASTL) reported a significant earnings miss for Q3 2025, with an adjusted EPS of -4.46, far below the forecasted -0.98. Despite a revenue beat, the market reacted negatively, with the stock dropping 5.18% to close at $4.25.

Key Takeaways

• Algoma Steel reported a substantial EPS miss, falling short by 354.41%.
• Revenue exceeded expectations, coming in at $523.9 million against a forecast of $481.53 million.
• The stock fell 5.18% following the earnings announcement.
• The company is accelerating its transition to electric arc furnace production.
• U.S. tariffs continue to impact cross-border market opportunities.

Company Performance

Algoma Steel’s Q3 2025 performance was marked by a significant net loss of $485.1 million, primarily due to a $503 million non-cash impairment loss. The company’s shipments decreased by 12.7% year-over-year, while the cost per ton of steel rose by 24.2%. Despite these challenges, the company remains focused on transitioning to electric arc furnace technology, which is expected to enhance production capacity and reduce costs.

Financial Highlights

• Revenue: $523.9 million, up from the forecasted $481.53 million.
• Earnings per share: -4.46, significantly below the forecast of -0.98.
• Adjusted EBITDA: Loss of $87.1 million.
• Net sales revenue: $473 million, a 12.2% decrease year-over-year.

Earnings vs. Forecast

Algoma Steel’s EPS of -4.46 fell short of the expected -0.98, resulting in a surprise of -354.41%. The revenue, however, surpassed expectations with a surprise of 8.8%. This mixed result reflects ongoing operational and market challenges.

Market Reaction

Following the earnings announcement, Algoma Steel’s stock declined by 5.18%, closing at $4.25. This downturn reflects investor concerns over the significant EPS miss and the broader market challenges facing the steel industry. The stock remains closer to its 52-week low of $3.02 than its high of $12.14.

Outlook & Guidance

Algoma Steel is targeting an EBITDA break-even at 1-1.2 million tons of production. The company anticipates a cost reduction to $220 per ton at full capacity. Revenue forecasts for future quarters and years indicate potential growth, with projections of $1,489.68 million for FY2025 and $1,840.29 million for FY2026.

Executive Commentary

CEO Michael Garcia emphasized the company’s strategic shift: "We are evolving from a cross-border commodity producer to a Canadian-focused steel supplier with lower cost, lower emissions, and greater resiliency." CFO Rajat Marwah added, "We are creating a stronger, more resilient enterprise aligned with Canada’s long-term economic and defense priorities."

Risks and Challenges

• Tariff costs: U.S. tariffs have effectively closed the cross-border market, impacting revenue opportunities.
• Cost pressures: Increased costs per ton of steel and tariffs could continue to pressure margins.
• Transition risks: Accelerating the transition to electric arc furnace technology involves significant capital expenditure and operational adjustments.
• Market demand: Fluctuations in steel demand, particularly in the Canadian market, could impact future revenue.
• Liquidity: While supported by government aid and credit facilities, maintaining sufficient liquidity remains a priority.

Q&A

During the earnings call, analysts inquired about potential capital inflows, with management highlighting $30-50 million in insurance proceeds and a $100-150 million working capital release. The discussion also touched on expected tax refunds, which could provide additional financial flexibility.

Full transcript - Algoma Steel Group Inc (ASTL) Q3 2025:

Conference Call Operator: Please stand by. Greetings and welcome to the Algoma Steel Group Inc. third quarter 2025 earnings call. At this time all participants are in a listen-only mode. A question and answer session will follow the formal presentation. This call is being recorded. It is now my pleasure to introduce Michael Morocco, Vice President and Corporate Development and Treasurer. Please go ahead, sir.

Michael Morocco, Vice President, Corporate Development and Treasurer, Algoma Steel Group Inc.: Good morning everyone and welcome to Algoma Steel Group Inc.’s third quarter 2025 earnings conference call. Leading today’s call are Michael Garcia, our Chief Executive Officer. This call is being recorded and will be made available for replay later today in the Investors section of Algoma Steel’s corporate website at www.algoma.com. I’d like to remind everyone that comments made on today’s call may contain forward-looking statements within the meaning of applicable securities laws, which involve assumptions and inherent risks and uncertainties. Actual results may differ materially from statements made today. In addition, our financial statements are prepared in accordance with IFRS, which differs from U.S. GAAP, and our discussion today includes references to certain non-IFRS financial measures. Last evening we posted an earnings presentation to accompany today’s prepared remarks. The slides for today’s call can be found in the Investors section of our corporate website.

With that in mind, I would ask everyone on today’s call to read the legal disclaimers on Slide 2 of the accompanying earnings presentation and to also refer to the risks and assumptions outlined in Algoma’s third quarter 2025 Management’s Discussion and Analysis. Our financial statements are prepared using the U.S. Dollar as our functional currency and the Canadian dollar as our presentation currency. All amounts referred to on today’s call are in Canadian dollars unless otherwise noted. Following our prepared remarks, we will conduct.

Michael Garcia, Chief Executive Officer, Algoma Steel Group Inc.: A Q&A session.

Michael Morocco, Vice President, Corporate Development and Treasurer, Algoma Steel Group Inc.: I will now turn the call over to Chief Executive Officer Michael Garcia.

Michael Garcia, Chief Executive Officer, Algoma Steel Group Inc.: Good morning everyone and thank you for joining us today. As we do each quarter, I’ll begin with safety. Our commitment to workplace safety remains at the core of everything we do. I’m pleased to report that we maintained our strong safety performance this quarter, building on the improvements we achieved throughout 2024. With EAF Unit 1 ramping up and our accelerated transition to electric arc furnace steelmaking underway, we continue to prioritize the health and well-being of our workforce during this pivotal transformation. Before diving into the details, I want to highlight three important themes. First, the U.S. 50% tariffs have effectively closed that market to us, driving lower shipments and higher production cost as we’ve pivoted our entire go-to-market strategy.

Second, we’ve secured the capital to strengthen our liquidity through $500 million in government support and an expanded $375 million ABL credit facility, extending our liquidity runway so that we can develop opportunities to diversify the business. Third, we have embarked on an operational pivot, accelerating our EAF transformation and focusing on products for the domestic market with the goal of significantly reducing our cash burn. The steel industry is experiencing significant disruption. The 50% U.S. tariffs implemented in June have effectively made that market no longer viable for Canadian steel producers, completely undermining our historically successful cross-border business model. These trade disruptions are reverberating globally, forcing producers worldwide to seek alternative markets while macroeconomic uncertainty compounds the headwinds facing our industry. Our third quarter performance was in line with our previously disclosed guidance across both shipment volumes and adjusted EBITDA metrics.

As expected, we experienced lower shipment volumes and realized pricing as well as elevated cost pressures, resulting in year-over-year declines in both revenues and adjusted EBITDA. A bright spot continues to be our fully modernized plate mill. Plate shipments totaled approximately 97,000 tons, roughly in line with the 103,000 tons in the prior quarter. Despite taking a planned two-week outage during the quarter, we expect Q4 plate production to increase sequentially as we capitalize on our position as Canada’s only discrete plate producer. Turning to our electric arc furnace project, the foundation of our future, I’m pleased to report continued progress since achieving first arc and first steel production in early July. Commissioning and ramp-up activities for Unit One have progressed in line with expectations.

The furnace and associated melt shop assets have demonstrated stable and reliable performance, achieving quality metrics across a broad range of plate and hot rolled coil product grades. The Q1 power system and other critical process components continue to perform as designed, supporting consistent metallurgical quality and process control. As of September 30, 2025, cumulative investment for the EAF project was $910 million, including $30 million during the third quarter. All material aspects of the project have been contracted and we continue to expect final aggregate cost of completion will be approximately $987 million. We have announced a number of decisive actions to strengthen our balance sheet and liquidity, including $500 million of federal and provincial loan facilities. Rather than covering each in detail, I ask Rajat to take you through the specific steps and their impact on our financial flexibility later in the call.

This government support directly addresses the sustained tariff environment that has forced us to reimagine our operating strategy. We are accelerating retirement of our blast furnace and coke oven operations as we ramp up EAF production through 2025 and 2026. We’re strategically refocusing production on as-rolled and heat-treated plate products along with select coil products primarily for sale in the Canadian market. We are uniquely positioned as Canada’s only discrete plate producer and this strategy aligns our production with domestic demand while reducing exposure to volatile and oversupplied coil markets. Our focus aligns with infrastructure, construction, and renewable energy growth sectors, preserving Algoma’s relevance by supporting national industrial priorities. We remain focused on extending our liquidity runway to develop new opportunities including advancing our energy strategy and pursuing product diversification initiatives.

Rather than competing as a commodity producer in a tariff-distorted global market, we are positioning Algoma as a premium Canadian supplier of essential steel products. This repositioning achieves three outcomes. We supply Canadian industries with high quality plate products needed for infrastructure, manufacturing, and defense. We create operational stability that supports continued investment aligned with Canada’s industrial needs, and we reinforce our role as a critical partner in Canada’s industrial and defense capabilities. By concentrating on higher value specialized products, we can strengthen customer partnerships and optimize margins. Combined with government support, this strategy positions Algoma not just to withstand current conditions, but to emerge as a stronger, more focused company. In short, we are evolving from a cross-border commodity producer to a Canadian-focused steel supplier with lower cost, lower emissions, and greater resiliency. This transformation strengthens both Algoma and Canada’s industrial future.

Now I’d like to take a moment on a more personal note. As announced last evening, I will be retiring at the end of this year from Algoma Steel Group Inc., concluding what has been an extraordinary journey with Algoma. I want to congratulate Rajat Marwah on his appointment as CEO effective January 1, 2026, and Michael Morocco on his promotion to Chief Financial Officer. Rajat has been a trusted partner throughout our transformation. His leadership in finance, strategy, and stakeholder engagement has been instrumental in securing the foundation we’ve built together. I know Michael will bring the same discipline and strategic insight to the CFO role as he has demonstrated leading our integrated business planning and capital markets efforts.

I’m proud of how far this company has come and confident that the management team under Rajat’s leadership will continue to strengthen Algoma’s position as a Canadian leader in sustainable steelmaking. I would like to pass it over to you, Rajat, to cover the financials and for closing remarks.

Rajat Marwah, Chief Financial Officer (Incoming CEO), Algoma Steel Group Inc.: Thanks Mike. Good morning everyone. First, I want to express my deep appreciation for Mike’s leadership. His vision and discipline have guided Algoma through one of the most significant transformations in our history. The foundation he built strategically, operationally, and culturally positions us for long-term success. Talking about the results for the third quarter, adjusted EBITDA was a loss of $87.1 million. For the quarter, tariffs expense totaled $90 million, and we estimate Canadian sales prices were approximately 40% lower on account of tariffs, resulting in lower revenue of approximately $32 million. Cash used in operating activities was $117.3 million. We finished the quarter with $337 million of liquidity. We shipped 419,000 net tons in the quarter, a decline of 12.7% versus the prior year quarter.

Lower steel shipments were the result of weakening market conditions, particularly due to Section 232 tariffs, which impacted the company’s export sales and resulted in oversupply of the Canadian market. At reduced transactional pricing, net sales realization averaged $1,129 per tonne compared to $1,036 per tonne in the prior year period. The increase versus the prior year level reflects improvements in value-added product mix as a proportion of sales, which more than offset weaker market conditions. Plate prices continued to enjoy a premium relative to hot rolled coils during the quarter. This resulted in sale revenue of $473 million in the quarter, down 12.2% versus the prior year period. On the cost side, Algoma’s cost per ton of steel products sold averaged $1,282 in the quarter, up 24.2% versus the prior year period.

Starting March 12, the company was subject to a 25% tariff on outbound steel shipments to the U.S., which increased to 50% in June. For the third quarter, tariffs cost were $90 million or $214 per tonne, which was included in cost of sales. Excluding the impact of tariff, cost of sales was only 3.6% higher versus the prior year period despite a 20% lower shipping volume and a higher mix of plate sales for the period. We will continue to focus and drive down the cost of sales as we make our strategic pivot to focus primarily on plate and selected coil products. Net loss in the third quarter was $485.1 million compared to a net loss of $106.6 million in the prior year quarter. The increase in net loss was driven primarily by the $503 million non-cash impairment loss as of September 30, 2025.

The company identified two impairment indicators, its market capitalization falling below the carrying value of its net assets and the impact of U.S. Section 232 tariffs. Accordingly, an impairment test was performed to assess whether the recoverable amount of the cash generating unit exceeded its carrying value, which resulted in the non-cash impairment loss. Cash used in operations totaled $117 million for the quarter compared to cash generated by operations of $26 million in the prior year period. Inventories ended the quarter at $790 million, up approximately $54 million from the second quarter, reflecting a physical build in raw materials and finished goods, partially offset by a $14.8 million non-cash write down of inventories to net realizable value.

Looking ahead, we expect a significant inventory drawdown beginning in the fourth quarter and accelerating through 2026 as we exit the blast furnace and coke oven operations and transition to a far more efficient EAF-based supply chain. As Mike mentioned, we have announced a number of decisive actions to strengthen our balance sheet and liquidity. We increased our ABL credit facility from $300 million to $375 million with Export Development Canada joining as a new lender. More significantly, late last month we announced a binding term sheet securing $500 million in liquidity support from the Governments of Canada and Ontario. We want to thank the government for their efforts in supporting Canadian industry, and we feel this package reflects their confidence in Algoma Steel Group Inc.’s strategic importance to Canada’s industrial base.

The financing includes $400 million from the Federal Large Enterprise Tariff Loan Facility and $100 million from the Province of Ontario, consisting of a $100 million third lien secured tranche and a $400 million unsecured tranche with 6.77 million share purchase warrants at $11.08 per share. The facility carries a seven-year term at Quora plus 200 basis points, stepping up after year three by 200 basis points annually. A combination of our strategic operational pivot, liquidity support, working capital efficiency improvements, and continued effort on driving down cost is expected to extend our liquidity runway well into the future as we look to capture opportunities and diversify the business. In closing, as we look ahead, our direction is clear. Complete the EAF ramp up, pursue diversification opportunities, and continue building on the strength of our exceptional team.

The past several months have brought unprecedented trade disruption, but through it all our people have maintained exemplary safety performance and advanced the commissioning of EAF Unit 1. We have taken decisive action to secure our future. The $500 million in government liquidity facilities together with our expanded $375 million ABL credit facility provide the resources and flexibility to complete this transformation with confidence. These arrangements reflect a shared commitment between Algoma Steel Group Inc. and our government partners to preserve critical domestic steel capacity and industry resilience by pivoting to become a domestically focused, high value steel producer anchored in plate and specialty products. We are creating a stronger, more resilient enterprise aligned with Canada’s long term economic and defense priorities. Our accelerated EAF transition is central to that vision, positioning Algoma Steel Group Inc. as one of North America’s lowest cost and most sustainable producers.

While near term trade uncertainty will remain, we are building a company that is leaner, more focused, and more competitive. When markets normalize, we expect to emerge stronger with improved margins, an advanced cost structure, and deeper alignment with national priorities. To our employees, thank you for your dedication and adaptability. To our government and financial partners, thank you for your confidence. To our shareholders and customers, thank you for your continued support as we execute this pivotal transformation. The work we are doing today is preserving and modernizing a strategic national asset and laying the foundation for enduring value creation. We remain focused, disciplined, and confident in the path ahead. Thank you very much for your continued interest in Algoma Steel Group Inc. At this point we would be happy to take your questions. Operator, please give the instructions for Q&A.

Conference Call Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press Star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press Star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. One moment while we poll for questions. Our first question, we’ll hear from Ian Gillies with.

Morning everyone.

Rajat Marwah, Chief Financial Officer (Incoming CEO), Algoma Steel Group Inc.: Hey Ian.

Michael Garcia, Chief Executive Officer, Algoma Steel Group Inc.: Morning Ian.

In the event we remain in this tariff environment that is 50%, could you maybe just outline where you think the production profile ends up in 2026 and whether you think you can be at EBITDA break even in that scenario? I think that would be helpful.

Sure. This is Mike. I’ll start and then hand it over to Rajat. Obviously our original intention was to get to full production on the EAFs at the end of 2026, initial part of 2027. Because of what’s happened to our business model with the 50% tariffs and the market dynamics, we’ve seen clearly that the right choice in front of us now is to execute a transition to full EAF production basically a year early. That’s going to give us the best ability to deal with the current environment. We are accelerating and pushing on that transition as we speak and we need to execute it in the coming months and ramp up EAF as quick as possible because that will put us at the lowest cost, most flexible cost position and it matches the available business we have right now.

As far as the specifics to your question of the ramp up and where we would reach EBITDA positive or EBITDA neutral, I’ll let Rajat address that.

Rajat Marwah, Chief Financial Officer (Incoming CEO), Algoma Steel Group Inc.: Thanks, Mike. As Mike mentioned, now we are looking at accelerating it. Our market in the U.S. is practically closed to us, and what remains is in Canada. We have our plate mill being the only plate producer in Canada. We are taking advantage of that and trying to ship as much plate as we can in Canada. The market on the plate side itself is weaker. With all the projects being announced, that definitely will help the market to get stronger. From the way we look at it, for next year we will not be selling our 50% portion into the U.S., and we’ll be maintaining our share in Canada for plate and coil.

From a numbers perspective, that could be as close as $1 million to $1.2 million tonnes for the year if the situation remains the way it is, without taking any upside on investments coming into Canada on the plate side, defense side, infrastructure side. That’s where we see it going. From a better perspective, once the transition is fully complete, which probably will take 23 to 6 months after the shutdown of the blast furnace, with all the cost moving into the P&L, we see that we start getting pretty close to a better breakeven in those volumes. We will be making money on the plate side. Coil is still stretched with 50% tariff, and the market in Canada is broken from that perspective because coil is being sold at 40% lower than the CRU, which is not making money for anybody.

That’s how we see it, Ian, at a very high level.

That’s helpful. Just one quick one on the plate before I follow on to one other separate question. The plate production was down a little bit sequentially from Q2 to Q3. Is that just a function of reorienting demand? You expect that to maybe start rising, whether it be in Q4 or Q1 next year?

Michael Garcia, Chief Executive Officer, Algoma Steel Group Inc.: I think that’s a big part of it, Ian. Another part of it is we did have more maintenance days in the outage in the quarter. Taking the maintenance, the difference in the amount of maintenance days in the two quarters, they were roughly the same. Practically speaking, we’re running our plate mill at full production, other than the days we need to take for maintenance, and the actual mix of the different type of plate products, how much heat treat is in there will affect the total volume numbers.

Understood. Next question. I’m just curious what, I guess, capital infusions you’d expect to get in the next year or so as it pertains to insurance proceeds, where I believe there’s still a bit left to come, government grants. I’m just curious if there’s anything that could potentially come in on the tax side as well, just given losses incurred.

Rajat Marwah, Chief Financial Officer (Incoming CEO), Algoma Steel Group Inc.: Sure. I’ll ask Michael Morocco to take that question.

Michael Morocco, Vice President, Corporate Development and Treasurer, Algoma Steel Group Inc.: Yeah. Hey, Ian, look, on the insurance side, we do expect somewhere between $30 million and $50 million more to come as we adjudicate through the claim. There are some other related cash flow items that you’ve hit on. We will have a significant working capital release over the next 12 months as we move to the EAF supply chain. It will be quite significant, I think, you know, we’ll see something north of $100 million, $150 million, some in that range on the working capital side. As you alluded to, we will see some tax refunds as we really start to collect on the taxes that we paid in 2022 and have had obviously some net operating losses through the last little bit. Those are the big movers on the cash flow front.

Rajat Marwah, Chief Financial Officer (Incoming CEO), Algoma Steel Group Inc.: Yeah, that’s. We see most of it coming next year, some of it in the first half, some in the second half depending upon timing. There will be a big amount of inflow that will happen both.

Michael Garcia, Chief Executive Officer, Algoma Steel Group Inc.: On.

Rajat Marwah, Chief Financial Officer (Incoming CEO), Algoma Steel Group Inc.: All three fronts, big coming from working capital release as well as taxes coming in. From a working capital perspective, we did mention earlier that there will be a $100 million release happening this next year as we transition to EAF. We expect that to happen, more than that, because we’ll be running at lower levels. We should see, as Mike mentioned, $150 million odd of reduction from the working capital and over $100 million or so coming from taxes. Perfect.

That’s helpful. I’ll turn it back over for now.

Thanks.

Conference Call Operator: Our next question, we’ll hear from James McGarragle with RBC Capital Markets.

Michael Morocco, Vice President, Corporate Development and Treasurer, Algoma Steel Group Inc.: Hey, thanks for having me on. Mike, wishing you all the best going forward. Roger and Mike, congrats on the new roles. I just wanted to follow up on some of the commentary you made on cash flow. Those numbers were into 2026, I believe. Can you just give us an updated CapEx number and an updated net working capital number for what we can expect into Q4?

Rajat Marwah, Chief Financial Officer (Incoming CEO), Algoma Steel Group Inc.: Sure. On the working capital side, we normally build working capital in the last quarter and it’s primarily on the inventory side. We will not see any build happening on the inventory side in the last quarter; we’ll probably see some release coming on the inventories, and there will be other movements happening between receivables and others. The big part of our change, normally quarter over quarter in the last calendar quarter, is inventories. The release that we are saying of $100 million, $150 million will include some release coming in the last quarter. On the CapEx side, we will see the CapEx coming down as we go into next year as the blast furnace and coke batteries shut down. We normally spend around $40 million in those facilities, so that maintenance CapEx will come down and will get further optimized during next year and the year after.

Michael Morocco, Vice President, Corporate Development and Treasurer, Algoma Steel Group Inc.: Thanks for the color. Just wanted to follow up on one of the initial comments. The initial questions that were asked, you’d given previously some targets, cost scrap plus targets on the cost side with regards to the new furnace that you’re bringing on. Can you kind of give us an updated view on how you’re thinking about that scrap plus cost targets given the impact from tariffs and that you might not be running that furnace at full capacity initially? Just how we can expect that to evolve into 2026 and then how you’re thinking about those targets longer term?

Rajat Marwah, Chief Financial Officer (Incoming CEO), Algoma Steel Group Inc.: On the cost side, what we said is that it’s scrap plus $220 roughly U.S. for sheet products, and that will be slightly higher. It will be in the range of $220 to $250 for the initial period as we will be running the EAF at lower capacity than one EAF at full capacity. We’ll see that slightly higher, and it won’t be double, but it will be slightly higher. We see that coming down to around $220-odd once we are running at at least two, two and a half million tonnes. That’s how we see the change on the cost side. Plate from a conversion perspective will be very similar, just that the variable cost will be higher. You have alloys, and there is a little bit more processing that comes through.

Michael Morocco, Vice President, Corporate Development and Treasurer, Algoma Steel Group Inc.: In the current environment, do you think the Canadian market can support that 2.5 million tons that you think is necessary in order to achieve that cost plus target, or do you think something would have to change in terms of tariffs for the Canadian market to be able to support that 2.5 million tons?

Michael Garcia, Chief Executive Officer, Algoma Steel Group Inc.: James, this is Mike. I think a critical part of the future of Algoma Steel is to be the foundation steel company for the future of the Canadian nation building agenda, if you will. We have the lowest cost, most flexible liquid steel base in the industry in Canada, or we will soon be there once the transition to EAF is complete and we’ve ramped up in the next year. I would say that market is not yet fully developed as we sit here in November, almost November of 2025. The market continues and will continue to develop. The nation building agenda that the new government has laid out is pretty clear in terms of everything that wants to be pursued around defense projects, infrastructure projects, shipbuilding, energy, manufacturing, reshoring. This is all without a return to a somewhat normal trade relationship with the U.S.

This is all future development and evolution of the Canadian market. My answer is if all that comes to fruition and even just a portion of it comes to fruition, Algoma Steel will be far and away the most advantageous and the best positioned to take advantage of it. I think the market’s going to be there for us if in the meantime or as part of that there’s a return to an improved trade relationship to the U.S. which gives us more access to the historical U.S. market. That will put wind in the sails of everything that we’ve talked about. It’ll open up the ability to take advantage of U.S. business. It will lift the margin across all of our business on both sides of the border. We still believe and are committed to being a strategic part of Canada’s nation building agenda.

I don’t think it would immediately mean, certainly not for Algoma Steel, it wouldn’t mean a return of business as usual where we’re just a commodity steel supplier looking for the best business, whether it’s in the U.S. or Canada. We would be mindful of the strategic risk of just going back to the old business model. I know it’s a little bit long-winded answer to your question, but yes, we believe in the future of the Canadian market built on the nation building agenda that the government of Canada has laid out and our unique position as Algoma Steel to take advantage of that.

Michael Morocco, Vice President, Corporate Development and Treasurer, Algoma Steel Group Inc.: Appreciate the caller, and I’ll turn the line over. Thank you.

Conference Call Operator: Next we’ll hear from Ian Gillies with Stifel.

I’m just in the Canadian market. Are you seeing any positive implications yet from some of the trade barriers that have been instituted by the Canadian government? Or do they need to, I guess, do the walls need to be taken up higher.

Michael Garcia, Chief Executive Officer, Algoma Steel Group Inc.: Yeah, I think you know, we’ve shared our frank views with the government around opportunities we see for them to put those walls higher and put more teeth into moves that would strengthen the health of the Canadian market. Obviously, the government has a lot to think through when they hear feedback from the steel industry in terms of are there any other consequences to doing something like that which they may not see as positive. Certainly, from a steel perspective, we think that there’s more that they could do, and we’ve been very vocal about that with them. I will say what we are seeing is a tremendous amount of interest in understanding Algoma Steel Group Inc.’s capabilities, both current and potential future capabilities, from every sector of the country, every sector of the economy.

We’ve gotten phone calls, visits, inquiries in terms of what do you make, how can you make something for my steel uses, and if you can’t make it today, what type of investment or how soon could you make it? That’s all very positive. Some of it is for business that’s actually being made right now. Some of it is for future business that may be still a few years away. The visibility, the intention, and the interest in Algoma Steel Group Inc. and what role we can and will play in the future of Canada’s nation building is definitely there. We’ve already seen that for the last several months.

I suspect this question is unanswerable, but do you have any sense of what you think the incremental plate demand could be or broader steel demand could be from these initiatives? Maybe even just on projects announced or potential projects?

You’re right. It’s hard to give you a big number. I know that a lot of these, for instance, the shipbuilding. We’ve had visits from major shipbuilders who are looking at just the defense shipbuilding agenda over the next several years. We can make all the steel needed in 10 Canadian warships. We could make the amount of plate needed for those 10 ships in two days. It’s not going to be one major program which moves the needle. It’s going to be a lot of demand throughout the entire economy and all types of projects. Certainly, defense spending and icebreakers and pipelines will get a lot of visibility, but we need multiple projects. The plate market in Canada is roughly 600,000 to 700,000 tons right now. We’re easily capturing 50% of that, and it’s a relatively small market.

It doesn’t take hundreds of projects to start building that market up north of a million tons. It takes more than a handful, but it doesn’t take hundreds. We feel pretty bullish about the future prospects in plate, but it’s hard to give you a specific number.

Last one for me, and this is probably for Rajat, could you maybe provide a view on how you intend to start using the credit facilities as you start moving into a bit more cash burn? Given the implications, some can be picked, some have dilution, some carry interest. I think that would be useful.

Rajat Marwah, Chief Financial Officer (Incoming CEO), Algoma Steel Group Inc.: Sure. The way the facilities have been put together, we have a secured line which doesn’t have any warrants attached to it. The intention will be to draw that line first and then go into the unsecured line where warrants are there. That helps us to manage that. Most of it is spec for two years and people pick it, which makes sense. It goes to cash payments. From use perspective, we have the ABL, which we want to keep as much as possible from working capital, another perspective, and start using the other line. We will be looking at it as we draw on what’s the most and the best optimum use of cash is and which cash, and based on our plan for next year, keep drawing. We’ll be quite mindful of how we are drawing it from that perspective.

Understood. Thanks very much. I’ll turn it back over.

Conference Call Operator: There are no further questions at this time. I would like to turn the floor back to Michael Moraca for closing remarks.

Michael Morocco, Vice President, Corporate Development and Treasurer, Algoma Steel Group Inc.: Thank you again for your participation in our third quarter 2025 earnings conference call and your continued interest in Algoma Steel Group Inc. We look forward to updating you on our results and progress when we report our fourth quarter and full year results early next year. Thank you.

Conference Call Operator: That does conclude today’s teleconference. We thank you for your participation. You may now disconnect your lines at this time.

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