Adjusted EBITDA of
EAF Unit Two Construction Nearing Completion, with First Steel Production Expected in the Third Quarter of 2026
Unless otherwise specified, all amounts are in Canadian dollars.
Business Highlights and Second Quarter 2026 to Second Quarter 2025 Comparisons
Comparisons between Q2 2026 and Q2 2025 were significantly impacted by the transition from legacy blast furnace operations to the Company’s Electric Arc Furnace (“EAF”) platform. In the prior-year quarter, the Company produced steel exclusively from its legacy blast furnace operations, which were permanently halted on
- Consolidated revenue of
$267.5 million , compared to$589.7 million in the prior-year quarter. - Consolidated loss from operations of
$134.2 million , compared to a loss from operations of$85.1 million in the prior-year quarter. - Net loss of
$96.0 million , compared to a net loss of$110.6 million in the prior-year quarter. - Adjusted EBITDA of
$13.8 million and Adjusted EBITDA margin of 5.2%, inclusive of a$45.0 million final insurance settlement and a$54.7 million capacity utilization adjustment, compared to an Adjusted EBITDA loss of$32.4 million and Adjusted EBITDA margin of (5.5%) in the prior-year quarter. See “Non-GAAP Financial Measures” below. - Direct tariff costs of
$18.7 million , compared to$64.1 million in the prior-year quarter. - Cash used in operating activities of
$79.4 million , compared to$37.9 million in the prior-year quarter. - Shipments of 181,473 tons, compared to 472,056 tons in the prior-year quarter, reflecting the transition to EAF-only steelmaking and the continued pivot toward the Canadian plate market.
Second Quarter 2026 Financial Results
Second quarter revenue totaled
Loss from operations was
Net loss in the second quarter was
Adjusted EBITDA in the second quarter was
Insurance Settlement
During the second quarter, the Company and its insurers reached a full and final settlement of
Electric Arc Furnace
The second quarter of 2026 was the second full quarter in which all liquid steel production was sourced entirely from the Company’s EAF facility. Ramp-up activities continue to progress in line with expectations. The Unit One EAF furnace and associated melt shop assets are performing as designed, with quality metrics achieved across a range of plate and hot-rolled coil product grades, and operations continue on a full 24-hour-per-day schedule. Construction activities on the second EAF unit are nearing completion, with first steel production expected in the third quarter of 2026.
The capacity utilization adjustment of
As Canada’s only producer of discrete plate, the Company holds a unique competitive position in this segment. Plate demand from infrastructure, construction, and defence end-markets remained healthy during the quarter, supporting a second consecutive quarter of record plate sales, and the Company expects plate production to continue to increase as the EAF ramp-up progresses through 2026.
Following completion of the EAF transformation, Algoma’s facility is expected to have an annual raw steel production capacity of approximately 3.7 million tons and is projected to reduce annual carbon emissions by approximately 70% from pre-EAF levels.
Trade Environment and Strategic Response
The 50%
The Canadian steel market remains supply-pressured, with domestic coil pricing held down by oversupply from domestic producers displaced from the U.S. market, the continued presence of
On
Algoma’s Memorandum of Understanding with
Liquidity
At
Conference Call and Webcast Details
A webcast and conference call will be held on
The live webcast and archived replay of the conference call can be accessed on the Investors section of the Company’s website at ir.algoma.com. For those unable to access the webcast, the conference call will be accessible domestically or internationally by dialing 877-425-9470 or 201-389-0878, respectively. Upon dialing in, please request to join the Algoma Steel Second Quarter 2026 Conference Call. To access the replay of the call, dial 844-512-2921 (domestic) or 412-317-6671 (international) and enter passcode 13761609.
Consolidated Financial Statements and Management’s Discussion and Analysis
The Company’s condensed interim consolidated financial statements for the three and six-month periods ended
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
Non-GAAP Financial Measures
To supplement our financial statements, which are prepared in accordance with IFRS® Accounting Standards as issued by the
EBITDA refers to net income or loss before depreciation of property, plant, equipment and amortization of intangible assets, finance costs, interest on pension and other post-employment benefit obligations and income taxes. Adjusted EBITDA refers to EBITDA before foreign exchange loss (gain), finance income, carbon tax, changes in fair value of IPO and LETL Warrants, earnout rights, share-based compensation liabilities, share-based compensation related to the Company’s Omnibus Long Term Incentive Plan, derivatives, certain inventory adjustments, impairment loss, legal settlements and legacy contracts, severance costs, stranded inventory and capacity utilization. Legal settlements and legacy contracts includes costs associated with the resolution of claims, settlements, legacy contractual matters and related legal costs. Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by revenue for the corresponding period. Adjusted EBITDA is not intended to represent cash flow from operations, as defined by IFRS Accounting Standards. We consider Adjusted EBITDA to be a meaningful measure to assess our operating performance in addition to IFRS Accounting Standards. See the financial tables below for a reconciliation of net loss to Adjusted EBITDA.
About
Based in
With the transition to electric arc furnace (EAF) steelmaking and a modernized plate mill, Algoma is redefining how steel is made in
This new chapter also introduces Volta™, the brand for all steel produced through Algoma’s EAF technology. Volta delivers the same trusted performance customers rely on, with significantly lower emissions—produced safely, sustainably, and proudly in
Building on more than a century of steelmaking expertise, Algoma continues to invest in its people, processes, and technologies to strengthen domestic supply chains and deliver responsible, Canadian-made steel that helps build a better tomorrow.
For more information, please contact:
Chief Financial Officer
Phone: 705.945.3300
E-mail: IR@algoma.com
Condensed Interim Consolidated Statements of Financial Position (Unaudited) | ||||||
| As at, | 2026 | 2025 | ||||
| expressed in millions of Canadian dollars | ||||||
| Assets | ||||||
| Current | ||||||
| Cash | $62.6 | |||||
| Restricted cash | - | 0.1 | ||||
| Taxes receivable | 217.8 | 206.9 | ||||
| Accounts receivable, net | 213.3 | 192.7 | ||||
| Inventories | 449.0 | 569.3 | ||||
| Prepaid expenses and deposits | 30.2 | 30.4 | ||||
| Other assets | 6.3 | 5.5 | ||||
| Total current assets | $979.2 | |||||
| Non-current | ||||||
| Property, plant and equipment, net | $1,082.5 | |||||
| Intangible assets, net | 0.2 | 0.3 | ||||
| Other assets | 1.8 | 3.3 | ||||
| Total non-current assets | $1,084.5 | |||||
| Total assets | $2,063.7 | |||||
| Liabilities and Shareholders' Equity | ||||||
| Current | ||||||
| Bank indebtedness | $73.4 | |||||
| Accounts payable and accrued liabilities | 211.3 | 203.9 | ||||
| Taxes payable and accrued taxes | 45.6 | 32.7 | ||||
| Current portion of other long-term liabilities | 3.8 | 5.8 | ||||
| Current portion of governmental loans | 0.3 | 14.0 | ||||
| Current portion of environmental liabilities | 4.5 | 4.7 | ||||
| Severance cost liability | 36.5 | 45.8 | ||||
| IPO Warrant liability | 0.9 | 2.5 | ||||
| Earnout liability | 3.5 | 3.7 | ||||
| Share-based payment compensation liability | 13.4 | 14.1 | ||||
| Total current liabilities | $393.2 | |||||
| Non-current | ||||||
| Senior secured lien notes | $495.0 | |||||
| Long-term governmental loans | 348.3 | 192.3 | ||||
| Accrued pension liability | 105.7 | 153.0 | ||||
| Accrued other post-employment benefit obligation | 194.9 | 193.0 | ||||
| Other long-term liabilities | 179.3 | 70.7 | ||||
| Environmental liabilities | 34.2 | 34.3 | ||||
| LETL Warrant liability | 17.5 | 7.5 | ||||
| Total non-current liabilities | $1,374.9 | |||||
| Total liabilities | $1,768.1 | |||||
| Shareholders' equity | ||||||
| Capital stock | $982.3 | |||||
| Accumulated other comprehensive income | 465.7 | 414.4 | ||||
| Deficit | (1,153.3 | ) | (897.9 | ) | ||
| Contributed surplus (deficit) | 0.9 | (0.9 | ) | |||
| Total shareholders' equity | $295.6 | |||||
| Total liabilities and shareholders' equity | $2,063.7 | |||||
Condensed Interim Consolidated Statements of Net Loss (Unaudited) | |||||||||||||
| Three months ended | Six months ended | ||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||
| expressed in millions of Canadian dollars, except for per share amounts | |||||||||||||
| Revenue | $267.5 | $564.4 | |||||||||||
| Operating expenses | |||||||||||||
| Cost of sales | $372.8 | $796.3 | |||||||||||
| Administrative and selling expenses | 28.9 | 31.0 | 55.8 | 61.9 | |||||||||
| Loss from operations | ($134.2 | ) | ( | ) | ($287.7 | ) | ( | ) | |||||
| Other (income) and expenses | |||||||||||||
| Finance income | ($0.5 | ) | ( | ) | ($1.1 | ) | ( | ) | |||||
| Finance costs | 21.4 | 18.5 | 32.9 | 36.3 | |||||||||
| Interest on pension and other post-employment benefit obligations | 3.5 | 3.9 | 7.1 | 7.9 | |||||||||
| Foreign exchange (gain) loss | (18.8 | ) | 31.5 | (33.1 | ) | 32.4 | |||||||
| Other income | (47.8 | ) | - | (47.9 | ) | (50.0 | ) | ||||||
| Change in fair value of Initial Public Offering ("IPO") and Large Enterprise | |||||||||||||
| Tariff Loan ("LETL") Warrant liabilities | 2.1 | 4.6 | 7.8 | (34.5 | ) | ||||||||
| Change in fair value of earnout liability | - | 1.3 | - | (3.1 | ) | ||||||||
| Change in fair value of share-based compensation liability | (0.1 | ) | 5.1 | - | (10.3 | ) | |||||||
| ($40.2 | ) | ($34.3 | ) | ( | ) | ||||||||
| Loss before income taxes | ($94.0 | ) | ( | ) | ($253.4 | ) | ( | ) | |||||
| Income tax expense (recovery) | 2.0 | (36.9 | ) | 2.0 | (63.3 | ) | |||||||
| Net loss | ($96.0 | ) | ( | ) | ($255.4 | ) | ( | ) | |||||
| Net loss per common share | |||||||||||||
| Basic | ($0.88 | ) | ( | ) | ($2.34 | ) | ( | ) | |||||
| Diluted | ($0.88 | ) | ( | ) | ($2.34 | ) | ( | ) | |||||
Condensed Interim Consolidated Statements of Cash Flows (Unaudited) | |||||||||||||
| Three months ended | Six months ended | ||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||
| expressed in millions of Canadian dollars | |||||||||||||
| Operating activities | |||||||||||||
| Net loss | ($96.0 | ) | ( | ) | ($255.4 | ) | ( | ) | |||||
| Items not affecting cash: | |||||||||||||
| Depreciation of property, plant and equipment and intangible assets | 23.0 | 38.2 | 56.4 | 73.2 | |||||||||
| Deferred income tax expense (recovery) | - | 0.5 | - | (1.5 | ) | ||||||||
| Pension funding in excess of expense | (3.1 | ) | (3.3 | ) | (6.7 | ) | (5.1 | ) | |||||
| Post-employment benefit funding in excess of expense | (2.2 | ) | (1.7 | ) | (4.1 | ) | (3.4 | ) | |||||
| Unrealized foreign exchange (gain) loss on: | |||||||||||||
| accrued pension liability | (2.3 | ) | 9.1 | (4.7 | ) | 9.3 | |||||||
| post-employment benefit obligations | (3.7 | ) | 10.8 | (7.0 | ) | 11.0 | |||||||
| Finance costs | 21.4 | 18.5 | 32.9 | 36.3 | |||||||||
| Loss on disposal of property, plant and equipment | 0.3 | - | 0.4 | - | |||||||||
| Interest on pension and other post-employment benefit obligations | 3.5 | 3.9 | 7.1 | 7.9 | |||||||||
| Other income | (47.8 | ) | - | (47.9 | ) | (50.0 | ) | ||||||
| Accretion of governmental loans and environmental liabilities | 5.6 | 5.1 | 3.4 | 9.1 | |||||||||
| Unrealized foreign exchange (gain) loss on government loan facilities | (7.0 | ) | 8.1 | (12.0 | ) | 8.3 | |||||||
| Increase (decrease) in fair value of IPO and LETL Warrant liabilities | 2.1 | 4.6 | 7.8 | (34.5 | ) | ||||||||
| Increase (decrease) in fair value of earnout liability | - | 1.3 | - | (3.1 | ) | ||||||||
| (Decrease) increase in fair value of share-based compensation liability | (0.1 | ) | 5.1 | - | (10.3 | ) | |||||||
| Other | 0.8 | 7.7 | (1.4 | ) | 12.3 | ||||||||
| ($105.5 | ) | ( | ) | ($231.2 | ) | ( | ) | ||||||
| Net change in non-cash operating working capital | 26.2 | (70.1 | ) | 133.2 | 95.3 | ||||||||
| Environmental liabilities paid | (0.1 | ) | (0.1 | ) | (0.1 | ) | (0.5 | ) | |||||
| Insurance proceeds for operating expenses | - | 35.0 | 6.5 | 35.0 | |||||||||
| Cash (used in) generated by operating activities | ($79.4 | ) | ( | ) | ($91.6 | ) | |||||||
| Investing activities | |||||||||||||
| Acquisition of property, plant and equipment | ($29.0 | ) | ( | ) | ($49.4 | ) | ( | ) | |||||
| Insurance proceeds for property damage | - | 15.0 | - | 15.0 | |||||||||
| Cash used in investing activities | ($29.0 | ) | ( | ) | ($49.4 | ) | ( | ) | |||||
| Financing activities | |||||||||||||
| Bank indebtedness advanced (repaid), net | $4.4 | ($99.4 | ) | ||||||||||
| Restricted cash | - | - | 0.1 | - | |||||||||
| Governmental loans received | 127.6 | 16.3 | 255.1 | 16.3 | |||||||||
| Repayment of governmental loans | - | (6.2 | ) | (0.1 | ) | (12.5 | ) | ||||||
| Interest paid | (26.2 | ) | (23.4 | ) | (29.9 | ) | (24.5 | ) | |||||
| Dividends paid | - | (14.8 | ) | - | (14.8 | ) | |||||||
| Other | (1.1 | ) | (0.7 | ) | (1.8 | ) | 1.5 | ||||||
| Cash generated by (used in) financing activities | $104.7 | ( | ) | $124.0 | ( | ) | |||||||
| Effect of exchange rate changes on cash | $1.0 | ( | ) | $2.1 | ( | ) | |||||||
| Cash | |||||||||||||
| Decrease in cash | (2.7 | ) | (144.0 | ) | (14.9 | ) | (184.4 | ) | |||||
| Opening balance | 65.3 | 226.5 | 77.5 | 266.9 | |||||||||
| Ending balance | $62.6 | $62.6 | |||||||||||
Reconciliation of Net Loss to EBITDA and Adjusted EBITDA | |||||||||||||
| Three months ended | Six months ended | ||||||||||||
| millions of dollars | 2026 | 2025 | 2026 | 2025 | |||||||||
| Net loss | ($96.0 | ) | ( | ) | ($255.4 | ) | ( | ) | |||||
| Depreciation of property, plant and equipment and amortization of intangible assets | 23.0 | 38.2 | 56.4 | 73.2 | |||||||||
| Inventory adjustments(depreciation on property, plant & equipment in inventory) | (0.5 | ) | 0.5 | (8.2 | ) | 1.5 | |||||||
| Finance costs | 21.4 | 18.5 | 32.9 | 36.3 | |||||||||
| Finance income | (0.5 | ) | (2.5 | ) | (1.1 | ) | (5.3 | ) | |||||
| Interest on pension and other post-employment benefit obligations | 3.5 | 3.9 | 7.1 | 7.9 | |||||||||
| Income tax expense (recovery) | 2.0 | (36.9 | ) | 2.0 | (63.3 | ) | |||||||
| EBITDA (ii) | ($47.1 | ) | ( | ) | ($166.3 | ) | ( | ) | |||||
| Foreign exchange (gain) loss | (18.8 | ) | 31.5 | (33.1 | ) | 32.4 | |||||||
| 7.5 | 10.4 | 13.5 | 13.9 | ||||||||||
| Change in fair value of financial instruments (i) | 2.0 | 11.0 | 7.8 | (47.9 | ) | ||||||||
| Share-based compensation | 4.3 | 3.6 | 7.0 | 7.4 | |||||||||
| Legal settlements and legacy contracts | 11.2 | - | 11.2 | - | |||||||||
| Capacity utilization | 54.7 | - | 144.9 | - | |||||||||
| Adjusted EBITDA (ii) | $13.8 | ( | ) | ($15.0 | ) | ( | ) | ||||||
| Net Loss Margin | (35.9 | %) | (18.8 | %) | (45.3 | %) | (12.2 | %) | |||||
| Net Loss / ton | ($529.0 | ) | ( | ) | ($630.4 | ) | ( | ) | |||||
| Adjusted EBITDA Margin (iii) | 5.2 | % | (5.5 | %) | (2.7 | %) | (7.1 | %) | |||||
| Adjusted EBITDA / ton | $76.0 | ( | ) | ($37.0 | ) | ( | ) | ||||||
| (i) Financial instruments at fair value are comprised of IPO and LETL Warrant liabilities, earnout liability, share-based payment compensation liability and derivatives. | |||||||||||||
| (ii) See "Non-GAAP Financial Measures" in this Press Release for information regarding the limitations of using EBITDA and Adjusted EBITDA. | |||||||||||||
| (iii) Adjusted EBITDA Margin is Adjusted EBITDA as a percentage of revenue. | |||||||||||||
