Algoma Steel Group Provides Q4 2025 Guidance
Algoma Steel Group provided guidance for its quarter ended December 31, 2025. Total steel shipments for the quarter are expected to be in the range of 375,000-380,000 tons and adjusted EBITDA is expected to be in the range of (C$95M)-(C$105M). Rajat Marwah, CEO of Algoma, commented, "Our fourth-quarter results were in line with expectations, reflecting the continued impact of steel tariffs and the previously announced wind-down of our blast furnace operations, which are expected to conclude in the coming days. We are encouraged by the ongoing ramp-up of the first unit of our Electric Arc Furnace project, which is now operating 6 days per week, and we remain on schedule with the second unit. As we move toward completing our transition to EAF steelmaking during the current quarter, we continue to optimize our existing assets and advance discussions with potential partners to expand our finishing capabilities. This strategy is deliberately aligned with Canada's national interest-strengthening domestic steelmaking capacity, supporting critical infrastructure and defence supply chains, and reinforcing Canada's long-term industrial competitiveness."
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Algoma Steel Signs MOU with Hanwha Ocean for C$345M Investment
- Investment Agreement Signed: Algoma Steel's memorandum of understanding with Hanwha Ocean secures up to C$345 million (US$250 million) for a new structural steel beam mill in Ontario, reflecting strong confidence in future production capacity expansion.
- Funding Allocation Details: Of the committed C$345 million, approximately C$275 million is earmarked for the development of the beam mill, while the remaining funds will support Algoma Steel's other products, indicating a strategic focus on product diversification.
- Sales Revenue Sharing Terms: The agreement stipulates that Algoma Steel will make annual payments to Hanwha Ocean equal to 3% of the net sales from the beam mill for 10 years post-operation, which will directly impact the company's cash flow and profitability.
- Project Dependency: The effectiveness of the MOU is contingent upon Hanwha winning an order to build up to 12 submarines for the Royal Canadian Navy, emphasizing the close ties to government projects and commitment to local investment.
Algoma Steel Group Inc. (ASTL) Stock Rises 7.8%, Ideal for Momentum Investing
- Price Increase: Algoma Steel Group's stock has risen 7.8% over the past four weeks, reflecting growing investor interest and enhancing its market appeal.
- Long-Term Momentum: The stock gained 4.7% over the past 12 weeks, indicating not only strong short-term performance but also sustained upward potential, making it suitable for long-term momentum investors.
- Momentum Score: With a Momentum Score of B, Algoma Steel is positioned as an attractive entry point for investors, suggesting a high probability of success and drawing further market attention.
- Reasonable Valuation: Despite its fast-paced momentum, Algoma Steel trades at a Price-to-Sales ratio of just 0.31, meaning investors pay only 31 cents for each dollar of sales, indicating significant room for growth.
