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Algoma Steel Group Inc. Reports Financial Results for the Three Months Ended June 30, 2026

Algoma Steel Group Inc., a leading Canadian producer of steel plate and hot-rolled sheet products, today announced results for the three-month period ended June 30, 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 January 18, 2026 after the unprecedented 50% U.S. Section 232 tariff fundamentally altered and permanently disrupted the Company’s historical cross-border business model, effectively foreclosing its traditional access to the U.S. market. In the second quarter of 2026, all liquid steel production was sourced from the Company’s first EAF unit, which continues to ramp up.

  • 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.

Rajat Marwah, the Company’s Chief Executive Officer, commented, “The second quarter demonstrated the resilience of our transformed business against a stubbornly challenging industry backdrop. We delivered a second consecutive quarter of record plate sales, our first EAF unit continued to ramp up as expected, and transition costs declined meaningfully from the first quarter. With commissioning activities commencing at the second EAF unit and first steel expected in the third quarter, we are entering the final phase of the most significant transformation in Algoma’s history.”

Mr. Marwah continued, “While the 50% U.S. Section 232 tariffs continue to effectively foreclose our traditional access to the U.S. market, our pivot to a Canada-centric, plate-first strategy is working. As Canada’s only producer of discrete plate, we are uniquely positioned to serve growing infrastructure, construction, and defence demand, and the recent rise in steel prices is encouraging. We are grateful for the continued support of the federal and provincial governments as we complete this transition and build a stronger, more sustainable Canadian steel industry.”

Michael Moraca, the Company’s Chief Financial Officer, commented, “Adjusted EBITDA of $13.8 million came in line with our previously disclosed guidance, supported by record plate sales, a 20% increase in average net sales realization per ton versus the prior-year quarter, and the benefit of a $45.0 million final insurance settlement. Results also include a $54.7 million capacity utilization adjustment tied to excess fixed costs from our previous operating configuration, down from $90.2 million in the first quarter and on track to be eliminated by the fourth quarter as the EAF ramp-up continues. We ended the quarter with approximately $437 million in total available liquidity, and with capital expenditures well below peak EAF construction levels, we remain focused on disciplined cash management as we complete the ramp-up and position the business for improved profitability.”

Second Quarter 2026 Financial Results

Second quarter revenue totaled $267.5 million, compared to $589.7 million in the prior-year quarter. Steel revenue was $247.0 million, compared to $534.4 million in the prior-year quarter. Average net sales realization per ton of steel sold was $1,361, compared to $1,132 in the prior-year quarter, an increase of 20.2%, reflecting improved product mix under the Company’s plate-first strategy.

Loss from operations was $134.2 million, compared to a loss of $85.1 million in the prior-year quarter. The year-over-year increase was primarily due to lower steel shipments resulting from the continued impact of U.S. Section 232 tariffs, which significantly restricted the Company’s historical U.S. export business. This was partially offset by increased plate shipment volume, lower labour and other fixed costs, and a $2.1 million decrease in administrative and selling expenses.

Net loss in the second quarter was $96.0 million, compared to a net loss of $110.6 million in the prior-year quarter. The decrease primarily reflects $45.0 million in insurance proceeds recognized in other income and a foreign exchange gain of $18.8 million, compared to a foreign exchange loss of $31.5 million in the prior-year quarter. These items were partially offset by the higher loss from operations and a $38.9 million decrease in income tax recovery.

Adjusted EBITDA in the second quarter was $13.8 million, resulting in an Adjusted EBITDA margin of 5.2%. This compares to an Adjusted EBITDA loss of $32.4 million, or an Adjusted EBITDA margin of (5.5%), in the prior-year quarter. Adjusted EBITDA in the quarter includes the benefit of the $45.0 million final insurance settlement related to the January 2024 utility corridor incident. Average realized price of steel net of freight and non-steel revenue was $1,361 per ton, compared to $1,132 per ton in the prior-year quarter. Cost per ton of steel products sold was $1,411, compared to $1,144 in the prior-year quarter, primarily reflecting lower fixed-cost absorption at reduced production volumes during the EAF ramp-up. Shipments for the second quarter decreased by 61.6% to 181,473 tons, compared to 472,056 tons in the prior-year quarter. See “Non-GAAP Financial Measures” below for an explanation of Adjusted EBITDA and a reconciliation of net loss to Adjusted EBITDA.

Insurance Settlement

During the second quarter, the Company and its insurers reached a full and final settlement of $145.0 million, net of applicable deductibles, in respect of the January 2024 structural utility corridor collapse, of which $45.0 million was recognized in other income in the quarter.

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 $54.7 million in the quarter represents excess fixed costs carried by the Company beyond what was required to operate the EAF and its supplied downstream operations at the volumes produced, primarily labour, equipment leases and rentals, fixed utilities, and maintenance costs associated with legacy assets. These costs declined from $90.2 million in the first quarter and are expected to decline further over the next three months and be fully eliminated by the fourth quarter of 2026.

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% U.S. Section 232 tariff on steel imports from Canada remained in effect throughout the second quarter, with product coverage continuing to expand across downstream and derivative steel products, further disrupting established North American supply chains. The Company incurred $18.7 million in direct tariff costs in the quarter, compared to $64.1 million in the prior-year quarter, reflecting the deliberate reduction of U.S.-bound volumes. Shipments to the United States represented 23% of total steel shipments in the quarter, compared to 54% in the prior-year quarter and a historical range of approximately 45% to 55%.

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 U.S. steel in the Canadian market, and import offers priced at less-than-fair-value. Algoma’s strategic response, concentrating production on discrete plate, where it enjoys a pricing premium and a unique market position, is designed to mitigate these dynamics.

On April 7, 2026, the Company announced the formation of Roshel Algoma Defence Solutions, a joint venture with Roshel Inc., a Canadian-owned defence manufacturer of armoured vehicles. The joint venture is expected to support the development of domestic ballistic steel and related manufacturing capabilities in Canada.

Algoma’s Memorandum of Understanding with Hanwha Ocean Co. Ltd. (“Hanwha Ocean”), announced in January 2026, has been suspended. The MOU was subject to Hanwha Ocean being awarded and entering into an effective contract under the Canadian Patrol Submarine Project (“CPSP”) and the negotiation and execution of definitive agreements with the Company. On July 6, 2026, the Government of Canada announced that Thyssenkrupp Marine Systems was selected under the CPSP procurement process.

Liquidity

At June 30, 2026, the Company had cash of $62.6 million, unused availability under its Revolving Credit Facility of $206.7 million, and $168.0 million available to draw under the LETL Facilities, for total available liquidity of approximately $437 million. During the second quarter, the Company received $124.5 million in governmental loan advances under the LETL Facilities to support operations and the completion of the EAF transition. Capital expenditures in the quarter were $29.0 million, compared to $97.4 million in the prior-year quarter, reflecting the substantial completion of EAF construction. No dividends were declared during the quarter.

Conference Call and Webcast Details

A webcast and conference call will be held on Thursday, July 30, 2026 at 11:00 a.m. EDT to review the Company’s results for the three-month period ended June 30, 2026, discuss recent events, and conduct a question-and-answer session.

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 June 30, 2026 and Management’s Discussion & Analysis thereon are available under the Company’s profile on the U.S. Securities and Exchange Commission’s (“SEC”) EDGAR website at www.sec.gov and under the Company’s profile on SEDAR+ at www.sedarplus.ca. These documents are also available on the Company’s website, www.algoma.com, and shareholders may receive hard copies of such documents free of charge upon request by contacting [email protected].

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