Algoma Steel Group Inc ASTL Stock Analysis

About Algoma Steel Group Inc

Based in Sault Ste. Marie, Ontario, Canada, Algoma is a fully integrated producer of hot and cold rolled steel products including sheet and plate. Driven by a purpose to build better lives and a greener future, Algoma is positioned to deliver responsive, customer-driven product solutions to applications in the automotive, construction, energy, defense, and manufacturing sectors. Algoma is a key supplier of steel products to customers in North America and is the only producer of discrete plate products in Canada. Its state-of-the-art Direct Strip Production Complex (“DSPC”) is one of the lowest-cost producers of hot rolled sheet steel (HRC) in North America. Algoma is on a transformation journey, modernizing its plate mill and adopting electric arc technology that builds on the strong principles of recycling and environmental stewardship to significantly lower carbon emissions. Today Algoma is investing in its people and processes, working safely, as a team to become one of North America's leading producers of green steel. As a founding industry in their community, Algoma is drawing on the best of its rich steelmaking tradition to deliver greater value, offering North America the comfort of a secure steel supply and a sustainable future as your partner in steel. Algoma Steel Group Inc. Condensed Interim Consolidated Statements of Net (Loss) Income (Unaudited) Three months ended September 30, Six months ended September 30, 2024 2023 2024 2023 expressed in millions of Canadian dollars, except for per share amounts Revenue $ 600.3 $732.6 $ 1,250.8 $1,559.8 Operating expenses Cost of sales $ 647.2 $664.8 $ 1,281.0 $1,304.3 Administrative and selling expenses 36.7 31.0 65.9 54.4 (Loss) income from operations ($ 83.6 ) $36.8 ($ 96.1 ) $201.1 Other (income) and expenses Finance income ($ 7.0 ) ($3.1 ) ($ 12.4 ) ($6.4 ) Finance costs 19.2 5.4 35.6 10.5 Interest on pension and other post-employment benefit obligations 5.3 4.8 10.7 9.6 Foreign exchange loss (gain) 9.6 (11.6 ) 2.8 (0.6 ) Other income (32.1 ) - (32.1 ) - Change in fair value of warrant liability 27.3 0.3 11.7 (17.2 ) Change in fair value of earnout liability 5.4 (0.7 ) 2.9 (2.7 ) Change in fair value of share-based compensation liability 12.5 (1.3 ) 6.7 (5.3 ) $ 40.2 ($6.2 ) $ 25.9 ($12.1 ) (Loss) income before income taxes ($ 123.8 ) $43.0 ($ 122.0 ) $213.2 Income tax (recovery) expense (17.2 ) 11.9 (21.5 ) 51.2 Net (loss) income ($ 106.6 ) $31.1 ($ 100.5 ) $162.0 Net (loss) income per common share Basic ($ 0.98 ) $0.29 ($ 0.93 ) $1.49 Diluted ($ 0.98 ) $0.24 ($ 0.93 ) $1.09 Algoma Steel Group Inc. Condensed Interim Consolidated Statements of Financial Position (Unaudited) As at, September 30, 2024 March 31, 2024 expressed in millions of Canadian dollars Assets Current Cash $ 452.0 $97.9 Restricted cash 0.1 3.9 Taxes receivable 36.1 20.0 Accounts receivable, net 253.7 246.7 Inventories, net 792.6 807.8 Prepaid expenses and deposits 52.2 80.5 Other assets 5.2 5.7 Total current assets $ 1,591.9 $1,262.5 Non-current Property, plant and equipment, net $ 1,496.0 $1,405.2 Intangible assets, net 0.6 0.7 Other assets 7.4 7.6 Total non-current assets $ 1,504.0 $1,413.5 Total assets $ 3,095.9 $2,676.0 Liabilities and Shareholders' Equity Current Bank indebtedness $ 0.3 $0.3 Accounts payable and accrued liabilities 293.2 286.8 Taxes payable and accrued taxes 50.4 30.1 Current portion of other long-term liabilities 3.3 1.4 Current portion of governmental loans 23.8 16.2 Current portion of environmental liabilities 2.7 3.1 Warrant liability 56.3 44.9 Earnout liability 12.3 13.8 Share-based payment compensation liability 38.5 31.9 Total current liabilities $ 480.8 $428.5 Non-current Senior secured lien notes $ 463.5 $0.0 Long-term governmental loans 130.2 127.4 Accrued pension liability 216.4 238.0 Accrued other post-employment benefit obligation 235.6 229.5 Other long-term liabilities 16.0 17.0 Environmental liabilities 38.4 35.2 Deferred income tax liabilities 101.2 98.0 Total…