Algoma Reports C$249.4 Million in Revenue as Steel Shipments Fall 65.5%
Key Facts
Algoma Steel reported results on October 28 for the quarter ended September 30, 2026, posting consolidated revenue of C$249.4 million, compared with C$523.9 million in the same period last year. Steel shipments fell 65.5% to 144,527 tons from 419,173 tons, a decline the company attributed to its transition to all-electric arc furnace production, U.S. tariffs and an outage at the Lake Superior Power plant. Net loss was C$129.6 million, compared with a loss of C$485.1 million a year earlier. Adjusted earnings before interest, taxes, depreciation and amortization showed a loss of C$13.9 million, with a negative margin of 5.6%, compared with a loss of C$87.1 million and a negative margin of 16.6%. The company excludes C$53.1 million in capacity utilization costs when calculating the adjusted measure. The results come as the company redirects its production mix and markets under pressure from U.S. tariffs and a temporary disruption to power supply.
Despite the decline in volumes, average net sales revenue per ton of steel sold rose to C$1,510 from C$1,129 in the comparable quarter, an increase of 33.7%. The company attributed the improvement to higher steel prices and a larger share of plate in its sales mix. CEO Rajat Marwah said the 50% U.S. tariffs under Section 232 "continue to constrain our traditional access to the U.S. market." He added that the shift to a Canada- and plate-focused strategy helps the company address these challenges. Algoma said the strategy targets demand related to infrastructure, construction and defense in Canada. The transition combined higher revenue per ton sold with a sharp decline in total shipments and revenue.
Quarterly data showed reduced reliance on the U.S. market, with shipments destined for the United States accounting for 24% of total steel shipments, compared with 50% a year earlier. Direct tariff costs also fell to C$18.1 million from C$89.7 million in the comparable period. Management said higher steel prices, a larger share of plate and lower fixed costs helped offset the temporary impact of the Lake Superior Power plant outage. The company linked the decline in shipments to the accelerated transition to electric arc furnaces, as well as tariffs and the plant outage. As of September 30, total available liquidity was about C$428 million. This included C$152.4 million in cash, C$232.5 million available under the revolving credit facility and C$43.5 million drawable from LETL facilities.
In an operational development after the quarter ended, the second electric arc furnace unit produced its first liquid steel tap on October 9, which was then processed into hot-rolled coils. The company expects the unit to contribute to production and shipments in the fourth quarter of 2026, and said ramp-up activities are proceeding as expected. The Lake Superior Power plant had restored its full generating capacity on September 30 after bringing online a replacement turbine that had been purchased. Algoma expects to complete installation of a leased turbine during the fourth quarter of 2026 and said this will not result in a steelmaking outage. The company is scheduled to hold a webcast and conference call to review results on October 29, 2026, at 11:00 a.m. Eastern Time.