Net income was $31.1 million, down from $87.2 million during the same period last year
Recent strikes by North American auto workers are expected to adversely affect Algoma Steel's fiscal third quarter, but the steelmaker's second-quarter results were consistent with expectations.
"While we do expect the impact strikes had on the price environment, along with lower anticipated production due to our usual planned maintenance ahead of winter to have a material downward impact on fiscal third quarter 2024 results, index prices have risen and forward curves have rebounded sharply on recent price increase announcements and news of tentative agreements between the UAW and automakers.
First, Ontario’s Independent Electricity System Operator provided further positive indication on connecting our EAFs to the grid. This means we will have access to the power required to operate the EAFs at our current run rate annual business plan range of 2.2 - 2.4 million shippable tons without relying on hot metal.
"Importantly, we have already secured contracts for approximately 80 per cent of the forecasted total project expenses, with approximately 95 per cent of these contracts being fixed-price agreements. We anticipate finalizing contracts for the remaining forecast project expenses by end of the fiscal year.”
Income from operations was $36.8 million, compared to $5.6 million in the prior-year quarter. The year-over-year increase was primarily due to improved steel shipment volumes and the absence of impacts in the year ago quarter of pension and post-employment benefit expenses associated with ratifying collective bargaining agreements, which more than offset lower realized steel pricing.
Average realized price of steel net of freight and non-steel revenue was $1,213 per ton, compared to $1,267 per ton in the prior-year quarter. Shipments for the second quarter increased by 26.1 per cent to 548,998 tons, compared to 435,202 tons in the prior-year quarter.The company has made substantial progress on the construction of two new state-of-the-art electric arc furnaces to replace its existing blast furnace and basic oxygen steelmaking operations.
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