Algoma Steel Group Inc (ASTL) 2025 Q1 法說會逐字稿

Greetings. Welcome to Algoma Steel Group Incorporated first quarter 2025 earnings call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. If anyone requires operator assistance, please press 0 on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Michael Moroka, Vice President, corporate development and treasurer.

問候。歡迎參加 Algoma Steel Group Incorporated 2025 年第一季財報電話會議。此時，所有參與者都處於只聽模式。正式演講結束後將進行問答環節。如果有人需要接線生幫助，請按電話鍵盤上的 0。提醒一下，本次會議正在錄製中。現在我很高興介紹公司發展和財務主管副總裁 Michael Moroka。

Thank you, Michael. You may begin.

謝謝你，麥可。你可以開始了。

Good morning, everyone and welcome to Algoma Steel Group Inc's first quarter 2025 earnings conference call. Leading today's call are Michael Garcia, our Chief Executive Officer, and Rajat Marwah, our Chief Financial Officer. As a reminder, this call is being recorded and will be made available for reply later today in the investors section of Algoma Deal's corporate website at www.algoma.com.

大家早安，歡迎參加 Algoma Steel Group Inc 2025 年第一季財報電話會議。主持今天電話會議的是我們的執行長 Michael Garcia 和財務長拉賈特馬爾瓦 (Rajat Marwah)。提醒一下，本次通話正在錄音，並將於今天稍晚在 Algoma Deal 公司網站 www.algoma.com 的投資者部分提供回應。

I would like to remind you that comments made on today's call may contain forward-looking statements within the meaning of applicable securities laws which involve assumptions and inherent risks and uncertainties. Actual results may differ materially from statements made today. In addition, our financial statements are prepared in accordance with IFRS accounting standards, which differ from US GAAP, and our discussion today includes references to certain non-gap financial measures.

我想提醒您，今天電話會議上的評論可能包含適用證券法含義內的前瞻性陳述，其中涉及假設和固有風險和不確定性。實際結果可能與今天的聲明有重大差異。此外，我們的財務報表是根據與美國公認會計準則不同的國際財務報告準則編制的，我們今天的討論包括對某些非差距財務指標的引用。

Last evening we posted an earnings presentation to accompany today's prepared remarks. The slides for today's call can be found in the investors section of our corporate website. With that in mind, I would ask everyone on today's call to read the legal disclaimers on slide 2 of the accompanying earnings presentation and to also refer to the risks and assumptions outlined in Algoma Steel's first quarter 2025 management's discussion and analysis. Please note that our financial statements are prepared using the US dollar as our functional currency and the Canadian dollar as our presentation currency.

昨晚，我們發布了一份收益報告，以配合今天的準備好的演講。今天電話會議的幻燈片可以在我們公司網站的投資者部分找到。考慮到這一點，我要求今天電話會議上的每個人閱讀隨附收益報告第 2 張投影片上的法律免責聲明，並參考 Algoma Steel 2025 年第一季管理層討論和分析中概述的風險和假設。請注意，我們的財務報表以美元作為功能貨幣，以加幣作為列報貨幣編制。

Please note all amounts referred to on today's call are in CAD unless otherwise noted. Following our prepared remarks, we will conduct a question-and-answer session. I will now turn the call over to our Chief Executive Officer, Michael Garcia. Mike.

請注意，除非另有說明，今天電話會議上提到的所有金額均以加幣為單位。在我們準備好的發言之後，我們將進行問答環節。現在我將電話轉給我們的執行長邁克爾加西亞。麥克風。

Thank you, Mike, and good morning, everyone. Thank you for joining us to discuss our first quarter 2025 results. Employee safety remains our highest priority and of core value. We continue to focus on this priority, emphasizing a culture of safety throughout the steelworks with construction activity levels at the site continuing, maintaining a strong safety focus is more critical than ever. Before turning to financial results, I want to highlight three important themes.

謝謝你，麥克，大家早安。感謝您加入我們討論 2025 年第一季的業績。員工安全仍然是我們的首要任務和核心價值。我們將繼續關注這項優先事項，強調整個鋼鐵廠的安全文化，隨著現場施工活動水準的持續，保持強烈的安全關注比以往任何時候都更加重要。在談到財務結果之前，我想先強調三個重要主題。

First, our quarterly results reflect the continued challenging conditions across global steel markets, particularly due to tariff uncertainty and Canadian trade policy, which led to lower realized pricing and higher production cost.

首先，我們的季度業績反映了全球鋼鐵市場持續面臨的挑戰，特別是關稅不確定性和加拿大貿易政策，導致實際價格下降和生產成本上升。

Second, we continued to advance EAF construction activities across the site and commissioned several critical systems positioning us to achieve first steel production from our initial EAF during the 2nd quarter with no material change to our project cost or 2025 production expectations.

其次，我們繼續推進整個廠區的電弧爐建設活動，並委託了幾個關鍵系統，使我們能夠在第二季度從最初的電弧爐實現首次鋼鐵生產，而我們的項目成本或 2025 年生產預期沒有發生重大變化。

And third, our balance sheet and liquidity position remain strong, with over $226 million in cash at quarter end and total liquidity of $587 million. We remain well funded to complete our transformative EAF project. The steel industry is navigating a period of elevated volatility largely due to ongoing tariff actions, creating uncertainty in both US and Canadian markets as customers adjust purchasing patterns in anticipation of supply disruptions. This trade uncertainty has also impacted on the US dollar exchange rate, influencing our raw material cost and competitive pricing position.

第三，我們的資產負債表和流動性狀況依然強勁，季末現金超過 2.26 億美元，總流動性為 5.87 億美元。我們仍然擁有充足的資金來完成我們的變革性 EAF 專案。鋼鐵業正經歷一段波動加劇的時期，這主要是由於持續的關稅行動，由於客戶預期供應中斷而調整購買模式，這給美國和加拿大市場帶來了不確定性。這種貿易不確定性也影響了美元匯率，影響了我們的原料成本和競爭定價地位。

We are managing our existing operations during this period to respond to rapidly changing market conditions, strategically adjusting our product mix between plate and coil products based on capacity and contractual obligations. Our first quarter results were in line with our expectations for shipments and adjusted EBITDA, which include insurance proceeds that Rajat will discuss shortly.

在此期間，我們正在管理現有業務，以應對快速變化的市場條件，並根據產能和合約義務策略性地調整板材和捲材產品之間的產品組合。我們第一季的業績符合我們對出貨量和調整後 EBITDA 的預期，其中包括 Rajat 將很快討論的保險收益。

The quarter reflected challenging market dynamics that began mid-2024, driven by US election uncertainty, interest rate concerns, and softening demand, factors that intensified with new US trade policies announced in March. As a result, we saw softer real life steel prices and higher costs leading to an overall decline in revenues and adjusted EBITDA compared to the prior year. On a positive note, we continue to ramp up production at our fully modernized plate mill. For the quarter, plate shipments reached approximately 91,000 tons, up from 82,000 tons in Q4 of 2024 and 73,000 tons in Q3 of 2024.

本季反映了自 2024 年中期以來充滿挑戰的市場動態，其原因是美國大選的不確定性、利率擔憂以及需求疲軟，而這些因素因 3 月美國宣布的新貿易政策而加劇。結果，我們看到實際鋼鐵價格走軟，成本上升，導致收入和調整後 EBITDA 與前一年相比整體下降。從積極的方面來看，我們繼續提高完全現代化的板材廠的產量。本季度，板材出貨量達到約 91,000 噸，高於 2024 年第四季的 82,000 噸和 2024 年第三季的 73,000 噸。

Looking ahead, we expect Q2 2025 plate production to again be directionally higher as we continue to capitalize on our position as Canada's only discrete plate producer, steadily ramping toward our expected annual run rate capacity of over 650,000 net tons. We recently announced our participation in team vigilance, strengthening our position in the Canadian defense supply chain, and we are encouraged by the federal government's renewed focus on domestic military procurement and infrastructure spending, which we believe will support future demand for our plate products.

展望未來，我們預計 2025 年第二季的板材產量將再次呈方向性走高，因為我們將繼續利用我們作為加拿大唯一離散板材生產商的地位，穩步提升我們預期的年運行產能超過 650,000 淨噸。我們最近宣布參與團隊警戒，加強我們在加拿大國防供應鏈中的地位，聯邦政府重新關注國內軍事採購和基礎設施支出令我們感到鼓舞，我們相信這將支持我們板材產品未來的需求。

Turning to our transformational electric arc furnace project. While unusually harsh weather conditions that began in November and persisted through much of the winter impacted project timelines, we used the opportunity to advance other work not on the critical path. This included commissioning the fume treatment plant and water treatment plant, positioning the furnace, and energizing the substation. We anticipate achieving first steel production from our initial EAF during the 2nd quarter with no material change to our project cost or 2025 production expectations.

談到我們的轉型電弧爐專案。雖然從 11 月開始並持續整個冬季的異常惡劣天氣條件影響了專案進度，但我們利用這個機會推進了非關鍵路徑上的其他工作。這包括調試煙霧處理廠和水處理廠、定位爐子以及為變電站通電。我們預計，我們的第一個電弧爐將在第二季度實現首次鋼鐵生產，而我們的專案成本或 2025 年產量預期不會發生重大變化。

Despite the challenging market conditions, we have faced, our balance sheet and liquidity position remain robust. Once both furnaces achieve full operation, we anticipate reaching a steady state shipping capacity of 3 million tons annually. This production level will optimize our currently underutilized downstream finishing capacity, significantly enhancing our operational efficiency and cost structure.

儘管我們面臨嚴峻的市場情勢，但我們的資產負債表和流動性狀況依然強勁。一旦兩座高爐全面投入運營，我們預計每年的穩定運輸能力將達到 300 萬噸。這一生產水準將優化我們目前未充分利用的下游精加工產能，顯著提高我們的營運效率和成本結構。

As of March 31, 2025, cumulative investment for the EAF project was $824 million including $83 million during the first quarter of 2025. All material aspects of the project have been contracted, and we continue to anticipate completing the remainder of the project, including those structured as time and material agreements within 5% of the upper end of the previously announced budget range. Our startup plan continues to include normal production from our existing steelmaking facility while ramping up production from our EAFs throughout 2025 and 2026, followed by a complete transition to EAF production.

截至 2025 年 3 月 31 日，EAF 專案的累計投資為 8.24 億美元，其中包括 2025 年第一季的 8,300 萬美元。該項目的所有實質性方面均已簽訂合同，我們預計在先前宣布的預算範圍上限的 5% 範圍內完成項目的剩餘部分，包括那些以時間和材料協議形式構建的部分。我們的啟動計畫繼續包括現有煉鋼設施的正常生產，同時在 2025 年和 2026 年期間提高電弧爐的產量，然後完全過渡到電弧爐生產。

As a significant milestone in this transition, we plan to shut down #7 coke battery at our Coke making facility later this summer. Number 7 battery is our least efficient battery, and we do not expect it to shut down to result in any increase in operating costs. This action reflects our confidence that our EAF transition plan remains firmly on track.

作為這一轉變的一個重要里程碑，我們計劃在今年夏天晚些時候關閉可口可樂製造廠的 7 號焦炭電池。7 號電池是我們效率最低的電池，我們預計它的關閉不會導致營運成本增加。這項措施體現了我們對 EAF 過渡計畫仍在穩步推進的信心。

In summary, despite very challenging market and weather conditions, we've maintained our focus on the safe operation of existing facilities, continued our ramp in plate production, and our approaching first EAF steel production during the quarter. Steel markets have had periods of great volatility in the past and during those times we do what we always stay focused on the things within our control and never take our eye off the ball as we prepare to take a tremendous step forward for our company and community. I'd like to once again thank all of our employees for their hard work, dedication, and professionalism.

總而言之，儘管市場和天氣條件非常嚴峻，我們仍然專注於現有設施的安全運行，繼續提高板材產量，並在本季度即將實現首批電弧爐鋼的生產。鋼鐵市場在過去經歷過劇烈波動的時期，在那些時期，我們所做的就是始終專注於我們能控制的事情，永不放棄，為公司和社區邁出巨大的一步做好準備。我想再次感謝我們所有員工的辛勤工作、奉獻精神和專業精神。

Thank you, and I'll now turn the call over to Rajat for a deeper dive into our financials.

謝謝，現在我將把電話轉給 Rajat，讓他更深入地了解我們的財務狀況。

Thanks, Mike. Good morning and thank you all for joining the call. As a reminder, all numbers are expressed in CAD unless otherwise noted. Our first quarter results included adjusted EBITDA that was a loss of $46.7 million, which reflects an adjusted a bitter margin of 9% and cash generated by operating activities of $92.1 million. We finished the quarter with a strong balance sheet including $226 million in cash and availability of $361 million under a revolving trade facility. Now let me dive into the key drivers of our performance.

謝謝，麥克。早安，感謝大家參加電話會議。提醒一下，除非另有說明，所有數字均以 CAD 表示。我們第一季的業績包括調整後的 EBITDA，即虧損 4,670 萬美元，這反映了調整後的 9% 的利潤率和經營活動產生的現金 9,210 萬美元。我們以強勁的資產負債表結束了本季度，其中包括 2.26 億美元的現金和 3.61 億美元的循環貿易融資可用額度。現在讓我深入探討一下我們業績的關鍵驅動因素。

We shipped 470,000 tons in the quarter, up 4.2% versus the prior year quarter. The prior year quarters shipment was lower due to the impact on operations from the utility's corridor collapse and subsequent blast furnace shut down. Net sales realization averaged 986 per ton compared to $1260 per ton in the prior year period. The decrease versus the prior year level reflects weakening market conditions partially offset by improvements in value-added product mix as a proportion of sales.

本季我們的出貨量為 47 萬噸，比去年同期成長 4.2%。由於公用事業走廊坍塌以及隨後的高爐關閉對營運造成影響，去年同期的出貨量較低。淨銷售額平均達到每噸 986 美元，而去年同期為每噸 1,260 美元。與前一年相比，銷售額的下降反映了市場環境的疲軟，但增值產品組合在銷售額中所佔比例的提高部分抵消了這一影響。

This resulted in steel revenue of $463 million in the quarter, down 18.5% versus the prior year period as lowered selling prices more than offset higher shipments. On the cost side, Algoma's cost per ton of steel products sold average $1,137 in the quarter, up 4% versus the prior year period on account of higher utility costs due to harsh winter conditions and tariffs. Starting March 12, the company has been subject to 25% tariff on all outbound steel shipments to the United States, and for the first quarter, tariff costs were $10.5 million which was included in the cost of sales. Net loss in the quarter was $24.5 million compared to net income of $28 million in the prior year quarter. The decrease was driven primarily by lower reliance pricing and higher input costs, as detailed above, partially offset by a $150 million receivable recorded as other income.

這導致本季鋼鐵收入為 4.63 億美元，較去年同期下降 18.5%，因為銷售價格的下降超過了出貨量的增加。在成本方面，Algoma 本季每噸鋼鐵產品的平均銷售成本為 1,137 美元，較去年同期上漲 4%，因為嚴酷的冬季條件和關稅導致公用事業成本上升。自 3 月 12 日起，該公司所有出口到美國的鋼鐵產品均需繳納 25% 的關稅，第一季的關稅成本為 1,050 萬美元，已計入銷售成本。本季淨虧損為 2,450 萬美元，而去年同期淨收入為 2,800 萬美元。如上所述，這一下降主要是由於依賴定價降低和投入成本增加，但記錄為其他收入的 1.5 億美元應收帳款部分抵銷。

Recognizing the approval of a second advance of insurance proceeds from the January 2024 collapse of the utility corridor. This amount exceeds previous expectations of $20 to $30 million, and the company expects to receive proceeds from the second advance payment prior to the end of this quarter.

確認已批准因 2024 年 1 月公用事業走廊倒塌而預付的第二筆保險收益。這筆金額超過了先前預期的2,000萬至3,000萬美元，該公司預計將在本季結束前收到第二筆預付款的收益。

The company is working closely with the insurance advisors and carriers to finalize the remaining claims with the balance of payout expected by year end. Cash generated by operations total $92 million for the quarter compared to $121 million in the prior year period, reflecting the softer market conditions discussed earlier. As we previously outlined, we targeted a release of approximately $100 million in working capital between March 24 and March 25, a goal we have now achieved. This was driven primarily by a significant reduction in inventory.

該公司正與保險顧問和保險公司密切合作，以完成剩餘的索賠，預計年底前支付餘額。本季經營活動產生的現金總額為 9,200 萬美元，而去年同期為 1.21 億美元，這反映了先前討論過的較弱的市場條件。正如我們之前所概述的，我們的目標是在 3 月 24 日至 3 月 25 日期間釋放約 1 億美元的營運資金，這一目標現已實現。這主要是由於庫存大幅減少。

For context, inventory levels declined by $138 million compared to the prior quarter and by $185 million since December 31, 2024. We remain focused on further enhancing working capital efficiency as we transition to EAF-based steelmaking. Liquidity at quarter end totaled approximately $587 million consisting of $226 million in cash and $361 million of availability under our existing credit facility. Based on our current liquidity position and expected cash generation, we believe we are well positioned to complete the EAF project using existing resources. We have a strong funding plan and remain engaged in government programming that supports domestic steelmaking.

具體而言，庫存水準與上一季相比下降了 1.38 億美元，自 2024 年 12 月 31 日以來下降了 1.85 億美元。在向電弧爐煉鋼轉型的過程中，我們仍將專注於進一步提高營運資金效率。季度末的流動資金總額約為 5.87 億美元，其中包括 2.26 億美元現金和 3.61 億美元現有信貸額度下的可用資金。根據我們目前的流動性狀況和預期的現金產生情況，我們相信我們有能力利用現有資源完成 EAF 專案。我們擁有強大的融資計劃，並繼續參與支持國內鋼鐵生產的政府計劃。

I'd now like to turn the call back to our CEO Michael Garcia for closing comments.

現在，我想將電話轉回給我們的執行長 Michael Garcia 進行最後發言。

Thank you, Rajat.

謝謝你，拉賈特。

In summary, despite persistently challenging market conditions and ongoing trade policy uncertainty, we have remained focused on the safe operation of our facilities, continued the steady ramp up of our plate production, and advanced our transformative EAF project.

總而言之，儘管市場環境持續充滿挑戰，貿易政策也持續存在不確定性，但我們始終專注於設施的安全運行，繼續穩步提高板材產量，並推動變革性的電弧爐專案。

We are optimistic that the newly elected Canadian government will work constructively with industries like ours to advance timely solutions that strengthen both our company, the community, and support the nation's broader economic goals. With trade relationships evolving, we believe it is critical that the government immediately engage with the United States to address the Section 232 tariffs currently in place and to support fair and balanced trade between both countries. Resolving these issues is essential to ensuring a level playing field for Canadian steel producers, supporting ongoing investment in low carbon steelmaking and protecting jobs in Canada's manufacturing sector.

我們樂觀地認為，新當選的加拿大政府將與像我們這樣的行業進行建設性合作，及時推動解決方案，加強我們的公司和社區，並支持國家更廣泛的經濟目標。隨著貿易關係的發展，我們認為政府必須立即與美國接洽，解決目前實施的第 232 條關稅問題，並支持兩國之間的公平和平衡貿易。解決這些問題對於確保加拿大鋼鐵生產商的公平競爭環境、支持對低碳鋼鐵生產的持續投資以及保護加拿大製造業的就業至關重要。

We are ready to stand up for Canada and to help build Canada strong. With Canadian steel, Canadian workers, and a shared commitment to a more sustainable future. 2025 is shaping up to be one of the most exciting chapters in Algoma's history with our modernization advancing, our transition to low carbon steel making underway, and our role as a critical supplier to Canada's manufacturing and infrastructure sectors expanding. We believe Algoma is well positioned to deliver sustainable long-term value for all of our stakeholders. I would like to once again thank all of our employees for their hard work, dedication, and professionalism. Thank you very much for your continued interest in Algoma steel.

我們準備為加拿大挺身而出，幫助加拿大建立強大。擁有加拿大鋼鐵、加拿大工人以及對更永續未來的共同承諾。 2025 年將成為阿爾戈瑪歷史上最令人興奮的篇章之一，我們的現代化進程不斷推進，我們向低碳鋼製造的轉型正在進行中，我們作為加拿大製造業和基礎設施領域重要供應商的角色也不斷擴大。我們相信，Algoma 有能力為所有利害關係人提供可持續的長期價值。我想再次感謝我們所有員工的辛勤工作、奉獻精神和專業精神。非常感謝您對 Algoma 鋼鐵的持續關注。

Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press 2 if you would like to remove your question from the queue, and for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment while we pull for questions.

謝謝。我們現在將進行問答環節。如果您想提問，請按電話鍵盤上的 1。確認音將表示您的線路已進入問題佇列。如果您想從佇列中刪除您的問題，您可以按 2；對於使用揚聲器裝置的參與者，可能需要先拿起聽筒，然後再按星號鍵。請稍等，我們正在回答問題。

Our first question is from Kaajancy with BMO Capital Markets. Please proceed.

我們的第一個問題來自 BMO 資本市場的 Kaajancy。請繼續。

Thank you for Answering my questions. Maybe starting on the near term looking to you, how should we think about shipments given that the environment remains pretty challenging?

感謝您回答我的問題。也許從短期來看，鑑於環境仍然相當具有挑戰性，我們應該如何考慮出貨量？

Yeah, hi Kaja, this is Rajat. The way we see it is that we probably be higher on a quarter over quarter basis, so higher trajectory from where we were last time from shipments. The environment is challenging, for sure, but we'll come down to, a little less than our normal run rate as we move into the second quarter, but quarter to quarter will be higher. Sorry, just to go and on the plate side we will be higher as well as you've seen the ramp, from last couple of quarters we've gone down to gone up to 90 and we'll be, going higher up on the on the plate side.

是的，你好，Kaja，我是 Rajat。我們的看法是，我們的季度出貨量可能會比上一季更高，因此出貨量軌跡比上次更高。毫無疑問，環境充滿挑戰，但進入第二季度後，我們的運行率將略低於正常水平，但逐季度都會有所提高。抱歉，只是要說一下，在盤子方面，我們也會更高，正如您所看到的斜坡，從過去的幾個季度開始，我們已經下降到 90，而且我們將在盤子方面走得更高。

And if we look year over year for the total volume, is it, getting close to that, I think last year it was probably around 500,000 tons. Is that reasonable? And specifically, how much higher can the plane go in the near term? Versus the 91.

如果我們逐年查看總量，是否接近這個數字，我認為去年的總量大概是 50 萬噸。這樣合理嗎？具體來說，飛機在短期內可以飛多高？與 91 相比。

Kaa, this is Mike. So, obviously we'll be approaching the 100,000 ton per quarter level. I expect that that will be at or near that in the next quarter that we report. Our share of the Canadian steel market versus, if you look at where we were when we really excited and completed the modernization. Our share of the Canadian steel plate market has really almost doubled since that time. There's still some competition in the Canadian plate market, although we're the only domestic plate producer. We still face competition from foreign plate every day in the market in Canada, whether it's from Taiwan, Turkey, Italy, France, Korea.

卡阿，這是麥克。因此，顯然我們將接近每季 10 萬噸的水平。我預計我們報告的下一季的數字將達到或接近這個數字。如果您看看我們當時真正興奮地完成現代化時的情況，您會發現我們在加拿大鋼鐵市場的份額。自那時起，我們在加拿大鋼板市場的份額實際上幾乎翻了一番。儘管我們是加拿大唯一的國內板材生產商，但加拿大板材市場仍然存在一些競爭。在加拿大市場上，我們每天仍面臨外國板材的競爭，無論是來自台灣、土耳其、義大利、法國或韓國。

And even from the US with some con some contracts that they have. So, we expect that there's still room to grow and that the plating and more importantly, the Canadian plate market itself will grow. I think it's shrunk over the last few years, but with the renewed focus by the government on Building Canada strong, that means a focus on infrastructure, especially energy infrastructure, defense, and maritime. All of those consume plate, and the government, I think, acknowledges and understands the strategic importance of a strong domestic steel industry, especially in plate, so, I think you know this next quarter will see us moving towards 100,000 tons and then continuing to move towards our annual run rate of 650,000 tons.

甚至與美國也簽訂了一些合約。因此，我們預計仍有成長空間，而且電鍍市場以及更重要的是加拿大電鍍市場本身將會成長。我認為過去幾年這個數字有所縮小，但隨著政府重新將重點放在建設強大的加拿大上，這意味著重點關注基礎設施，特別是能源基礎設施、國防和海事。所有這些都會消耗鋼板，我認為政府承認並理解強大的國內鋼鐵業（尤其是鋼板）的戰略重要性，因此，我認為您知道下個季度我們的產量將達到 10 萬噸，然後繼續朝著 65 萬噸的年產量邁進。

And maybe staying on the plate market, we saw plate prices in the US increasing. How is pricing currently in the Canadian market?

也許就板材市場而言，我們看到美國板材價格正在上漲。目前加拿大市場的定價如何？

Canadian market, it's still our most attractive pricing in the Canadian market. I think in general; the Canadian market is oversupplied in steel. Over 50% of the Canadian market is serviced by imported steel, and a lot of that imported steel is coming in at pretty low pricing. We believe there's a significant amount of it that is unfairly traded into Canada. We're having active discussions with the Canadian government around what's the right trade policy that they should be putting in place to protect the strength of the domestic Canadian steel industry because it is a vitally strategic part of the Canadian economy going forward, so, but you know your question was specifically about steel pricing. It's still the most attractive segment for us.

加拿大市場，這仍然是我們在加拿大市場最具吸引力的定價。我認為總體來說；加拿大市場鋼鐵供應過剩。超過 50% 的加拿大市場依賴進口鋼材，而且許多進口鋼材的價格都相當低。我們認為，有大量的黃金以不公平的方式銷往加拿大。我們正在與加拿大政府進行積極的討論，討論他們應該制定什麼樣的正確貿易政策來保護加拿大國內鋼鐵業的實力，因為這是加拿大經濟未來發展至關重要的戰略組成部分，所以，你知道你的問題具體是關於鋼鐵定價的。對我們來說，它仍然是最具吸引力的部分。

Thank you. Although it's lower than the than the US steel pricing.

謝謝。儘管它低於美國鋼鐵價格。

Our next question is from David Ocampo with Coremark Securities. Please proceed.

下一個問題來自 Coremark Securities 的 David Ocampo。請繼續。

Thanks for taking my questions. Mike, I was hoping you could provide a little bit more commentary on the sheet pricing discount. I think on the last conference call you guys noted a discount as high as 25%. Is that still the case? And have you been able to find in incremental pocket demand to be able to shift more of your mix from the US to Canada because it has been as high as 60%.

感謝您回答我的問題。麥克，我希望您能對單張定價折扣提供更多評論。我認為在上次電話會議上你們提到了高達 25% 的折扣。現在還是這樣嗎？您是否能夠發現增量需求，從而能夠將更多的產品從美國轉移到加拿大，因為這一比例已經高達 60%。

Yeah, David, thanks for the question. In sheet and coil it, it's difficult. The Canadian market price has pretty much adjusted. Almost equal to a 25% discount to the US coil price. So, it makes for us, particularly, it makes us a little Indifferent to whether we service a sheet order in the US and pay a 25% discount or take it in Canada at a 25% lower market price and that's one of the challenges we're facing with the current Canadian steel market. It's just, it's oversupplied with coil and with the uncertainty around, where the tariffs and where demand is going to go, there's not much of a, there's not much.

是的，大衛，謝謝你的提問。在板材和卷材中，這很困難。加拿大市場價格已基本調整。幾乎相當於美國卷材價格的25%折扣。因此，對我們來說，特別是對於是否在美國提供板材訂單並支付 25% 的折扣還是在加拿大以低於 25% 的市場價格提供訂單，這讓我們有點無所謂，這是我們在當前加拿大鋼鐵市場面臨的挑戰之一。只是，線圈供應過剩，而且由於關稅和需求走向存在不確定性，所以供應不多，供應不多。

Increased demand right now to support higher pricing and then I spoke about the presence of all the foreign steel in Canada over 50% of the market. So I think all those factors are leading to the current situation where the Canadian market pricing is significantly lower than the US market pricing and it's settling out about that at that 25% lower level.

目前需求增加以支持更高的價格，然後我談到所有外國鋼鐵在加拿大的市佔率超過 50％。所以我認為所有這些因素導致了目前的局面，即加拿大市場定價明顯低於美國市場定價，並且穩定在 25% 左右的低點。

Okay, that makes sense. And then I just look at the futures market just as an indication of what's to come. I mean, it's getting close to $800 a ton and with a 25% discount and then compare that to, I think your break even cost structure on sheet at $650. It does suggest that there's more negative even to prints to come. It is that the right way to frame kind of Q2, Q3?

好的，這很有道理。然後我只是觀察期貨市場，以預測未來的走勢。我的意思是，它的價格接近每噸 800 美元，並且有 25% 的折扣，然後與之相比，我認為您的盈虧平衡成本結構為 650 美元。這確實表明，未來的印刷品將面臨更多負面影響。這是建構 Q2、Q3 的正確方法嗎？

Yeah, I think, looking at the future and just discounting it, and looking at the math, you'll come to those conclusions, but you start adding. Adding plate to it does, it does make a difference, as we are selling more and more plate and moving more to value added products, we do sell co road and others where we fetch higher margins. So sheet based, that's how the trajectory shows, but overall, it is different and to that we've also been working on our cost side we know that there will not be big change from raw material perspective as they are normally linked to either fixed price on the cold side and indices on the on the RO side, but there are other costs that we are looking at optimizing and reducing to reduce our cost as we go through this year.

是的，我認為，展望未來，只是將其打折，並看看數學，你就會得出這些結論，但你開始添加。添加板材確實會產生影響，因為我們銷售的板材越來越多，並且更多地轉向增值產品，我們確實銷售道路板材和其他板材，從而獲得更高的利潤。因此，基於板材，這就是軌跡所顯示的，但總體而言，它是不同的，並且我們也一直在努力降低成本，我們知道從原材料的角度來看不會有大的變化，因為它們通常與冷側的固定價格和RO側的指數掛鉤，但還有其他成本，我們正在考慮優化和降低，以在今年降低成本。

So, just math makes sense what you're saying, but there are a lot of other moving parts and other value-added products that do make a difference.

所以，你所說的只是數學上講是有道理的，但還有很多其他活動部件和其他增值產品確實會產生影響。

Okay. And then just the last one for me on the tariff cost $10 million in the quarter, but that was a partial tariff. So, when I look at 2018, I think you guys got to close to $250 million for the year, so call it $60 million for the quarter. Is that a good proxy for the hit that you guys may see in Q2?

好的。對我來說，最後一個關稅在本季度花費了 1000 萬美元，但那是部分關稅。因此，當我回顧 2018 年時，我認為你們全年的收入接近 2.5 億美元，所以本季的收入為 6000 萬美元。這是你們可能在第二季看到的熱度的一個很好的代表嗎？

Yeah, it's close yeah that's how it should play out.

是的，很接近了，事情就該如此發展。

Okay, that, that's it for me. I'll hope back in the queue.

好的，對我來說就這樣了。我希望能回到隊列中。

Thanks David. Our next question is from Ian Gillies with Stefo. Please proceed.

謝謝大衛。下一個問題來自 Stefo 的 Ian Gillies。請繼續。

Morning everyone.

大家早安。

Mike, could you maybe just talk a little bit about what's transpired with the EAF between last update and this one? I acknowledge the delay is not long, but, I guess it's only been 6 weeks since we last spoke, and I'm just curious and maybe talk a little bit about what the critical path issues are over the next, I guess over the short term here, to get your first hot meal out of the EAF.

麥克，您能否簡單談談上次更新和本次更新之間 EAF 發生的情況？我承認延遲的時間並不長，但是，我想距離我們上次談話才過去 6 週，我只是很好奇，也許可以稍微談談下一步的關鍵路徑問題是什麼，我想在短期內，從 EAF 中得到第一頓熱飯。

Sure, so as we've been constructing and installing this, the new EAF complex really since April of 2022 is when we really started. We had the earthworks prepared and we really started construction in earnest. So, it's been a 3 year journey and as you start to approach the end of that journey and anticipate, fully energizing the furnace and producing metal in the furnace, you create a very detailed Gantt chart and timeline for all of the final critical steps that need to happen to put us in a position to kind of strike that first arc and melt that first heat of steel. So, as we started gaining visibility to this final timeline and final, Gantt chart for the second half of last year, that was placing the first arc in the first quarter of 2025, and that's what we communicated.

當然，我們一直在建造和安裝這個新的 EAF 綜合設施，實際上從 2022 年 4 月開始我們才真正開始。我們已經準備好土方工程並開始認真施工。所以，這是一個為期 3 年的旅程，當你開始接近旅程的終點並預期完全啟動熔爐並在熔爐中生產金屬時，你會創建一個非常詳細的甘特圖和時間表，列出所有需要發生的最後關鍵步驟，以讓我們能夠點燃第一道電弧並熔化第一爐鋼。因此，當我們開始了解去年下半年的最終時間表和最終甘特圖時，我們將第一個弧線放在了 2025 年第一季度，這就是我們所傳達的。

The last time we spoke six weeks ago, we now had visibility that that was going to happen in the second quarter. We were thinking second half of April, that's what we talked about, but, so, the change today is it's still happening in the 2nd quarter. The factors the team has run into has primarily been, weather related as we dealt with higher-than-expected snow events beginning in November, but really also in March we had higher than expected snow events. We had a colder than expected seasonal temperatures which affected our ability to commission some of the critical.

六週前我們上次談話時，我們已經知道這將在第二季發生。我們原本想在四月下半月發生，這就是我們所談論的，但是，今天的變化是它仍然發生在第二季。團隊遇到的因素主要是天氣因素，因為我們從 11 月開始就遇到了比預期更多的降雪事件，但實際上 3 月也遇到了比預期更多的降雪事件。本季的氣溫比預期要低，這影響了我們啟動一些關鍵專案的能力。

A system, especially the water treatment plant, you don't, you can't really commission a water treatment plant when you have Sustained temperatures, below zero, complex piping and piping installation and hydraulics check out. So really, it's this last intense work were, we're executing the plan, every day as aggressively as possible, but there's always things that could cause you to slip. A slip a day or a week at a time and so really what's happened is we slipped from the first quarter of 2025 into the second quarter.

一個系統，特別是水處理廠，當你處於持續的零度以下的溫度下，複雜的管道和管道安裝以及液壓檢查時，你無法真正調試水處理廠。所以實際上，這是最後的緊張工作，我們正在執行計劃，每天都盡可能積極地執行，但總是會有一些事情可能導致你失誤。每次延後一天或一周，所以實際發生的情況是，我們從 2025 年第一季推遲到了第二季。

Understood that that's helpful and just a quick follow on for that one when do you think you'll fire up the second furnace?

我明白這很有幫助，並且只是快速跟進一下，您認為什麼時候會啟動第二個爐子？

Second furnace will be at the end of the year. We're focusing on the first furnace right now. A lot of the major work for the second furnace has already been in place. I imagine the team's going to learn a lot about the final sequence of startup events and what needs to happen in order to strike that first arc. So, we'll certainly apply. All of that learning to the second furnace, but right now, the second furnace is showing the end of 2025.

第二座熔爐將於年底投入使用。我們現在專注於第一個熔爐。第二座高爐的大部分主要工作已經就位。我想團隊將會學到很多關於啟動事件的最終序列以及為了達到第一個弧線需要發生什麼的知識。所以，我們一定會申請。所有這些學習都是針對第二座熔爐的，但是現在，第二座熔爐顯示的是2025年末。

Understood. Maybe switching gears, two separate questions in and around liquidity, I guess the first one with respect to the working capital facility in the event that EBITDA is negative, are you still able to draw on that facility or are there covenants that wouldn't allow you to draw on that in the event you're generating negative EBITDA?

明白了。也許換個話題，關於流動性有兩個不同的問題，我想第一個問題是關於營運資金便利的，如果 EBITDA 為負，您是否仍然能夠利用該便利，或者是否存在契約不允許您在產生負 EBITDA 的情況下利用該便利？

So, we can still draw on that. There is, there's a covenant that you have to test to draw the last 10%, but you can still draw on that.

所以，我們仍然可以藉鏡這一點。有一個契約，你必須測試它才能提取最後的 10%，但你仍然可以利用它。

And then I guess the follow on question fully acknowledging liquidity looks okay today. Like are you debating taking on any incremental debt or looking at any of these Canadian government loan programs at the time being, or are those just going to be left out there as call options in the event they're required?

然後我想，接下來的問題是充分承認流動性今天看起來還不錯。例如，您是否正在考慮承擔任何增量債務或考慮目前的任何加拿大政府貸款計劃，或者這些計劃是否只是在需要時作為看漲期權保留下來？

So, as of now, no, we are reviewing, all scenarios and we know that any scenario that we look at right now will be different in just a few weeks. So, though we are reviewing all scenarios we have enough liquidity right now we are working closely with the government on the work related to the trade policies in Canada and we would want the government to be active on discussing with the US government on the trade front as well, and you know at the same time we're looking at you know optimizing our working capital, as much as we can.

因此，截至目前，我們正在審查所有情況，我們知道，我們現在看到的任何情況在短短幾週內都會有所不同。因此，儘管我們正在審查所有情況，但我們目前擁有足夠的流動性，我們正在與政府密切合作，開展與加拿大貿易政策相關的工作，我們希望政府也能積極與美國政府就貿易方面進行討論，同時，我們正在盡可能地優化我們的營運資金。

So, that we have, we can optimize it and we can use that cash if needed, but as of now we don't see a need as we go through and the government programs are there and we are looking at all that is coming that has come out up until now and there will be more clarity as the government is in play and definitely we'll be looking at all the government programs that are out there to manage the tariffs.

因此，我們可以對其進行最佳化，並在需要時使用這些現金，但截至目前，我們還沒有看到任何需求，而且政府計劃已經存在，我們正在研究迄今為止出現的所有問題，隨著政府的行動，情況將會更加明朗，我們肯定會研究所有現有的政府計劃來管理關稅。

Okay, and with respect to working capital, it was obviously a very strong quarter for inventory releases. Can you maybe just update us on how much, how big of a source of funds you think working capital will be this year now that you're through Q1 and whether that's changed?

好的，就營運資金而言，這顯然是庫存釋放非常強勁的一個季度。您能否告訴我們，現在您已經度過了第一季度，您認為今年營運資金的資金來源將有多少，有多大，以及這是否有所變化？

So we will see, from inventory perspective, and when you look at working capital there are so many moving parts primarily on the receivable side based on how pricing is, and how much you're realizing, but, we do see a reduction, during the year. Now December we'll make, we'll be using some amount of, inventories as we build inventories, but March to March we will not see any cha any big increase that'll only be a reduction. And we'd only build a little as we go through the year on the on the inventory side specifically the raw materials by December so there will be definitely some release the $50 million that that is booked as a receivable in the in the quarter will be released and we've collected most of the money on the insurance side by now and we'll get the rest during this quarter so that would be a permanent release as you're seeing. On the receivable side, so they'll be puts and takes, but we'll see some release.

因此，從庫存角度來看，當您查看營運資本時，您會發現很多變動部分，主要在應收帳款方面，這取決於定價方式以及您實現的金額，但我們確實看到，在這一年中有所減少。現在，12 月份我們將製造，我們將使用一定量的庫存，因為我們正在建立庫存，但是從 3 月份到 3 月份，我們不會看到任何大幅的增長，而只會有所減少。到 12 月份，我們在庫存方面只會增加一點點，特別是原材料，因此肯定會有一些釋放，本季度記為應收賬款的 5000 萬美元將會被釋放，到目前為止，我們已經在保險方面收回了大部分資金，我們將在本季度收回剩餘的資金，因此，正如您所看到的，這將是永久性的釋放。在應收帳款方面，它們會有投入和支出，但我們會看到一些釋放。

Okay, Thanks very much.

好的，非常感謝。

Thanks Ian.

謝謝伊恩。

As a reminder to start one on your telephone keypad, if you would like to ask a question. Our next question is from James McGarrigle with RBC Capital Markets. Please proceed.

提醒一下，如果您想提問，請在電話鍵盤上啟動一個。我們的下一個問題來自加拿大皇家銀行資本市場的 James McGarrigle。請繼續。

On I just had a question of how we should be thinking about cost of goods sold into Q2. I know you flagged, so, some cost control initiatives you're working through, some of the input costs are contracted, but with the EIF ramping up, can you just give us some color on how we should be, modeling things directionally into Q2 versus, what we saw in Q1?

我只是想問我們應該如何考慮第二季的銷售成本。我知道您提到了這一點，您正在實施一些成本控制舉措，一些投入成本已經縮減，但隨著 EIF 的增加，您能否給我們一些說明，說明我們應該如何將第二季度的情況與第一季度的情況進行方向性建模？

Yeah, so, in Q1, the cost was higher because of, one is volume, the other is the cost of utilities as the winter was quite harsh and we were not expecting that much higher cost. That cost will come down. We should be around overall cost of production. We should be around, 1,020, 1,030, let's say 1,020 to 10,040.

是的，所以在第一季度，成本較高，因為一個原因是產量，另一個原因是公用事業的成本，因為冬天相當嚴酷，我們沒想到成本會這麼高。成本將會下降。我們應該關注整體生產成本。我們應該在 1,020、1,030 左右，或說 1,020 到 10,040 左右。

Range in CAD overall reed cost, as we come out and we and we keep on optimizing that during this year.

隨著我們推出 CAD 整體簧片成本範圍，我們在今年將繼續對其進行優化。

Hey thanks and just like another one on some of the recent developments on auto tariffs, the US announced they're going to provide carmakers with credits for up to 15% of the value of vehicles that are assembled in the US that can then be applied against the value of imported parts. I know Steel wasn't specifically.

嘿，謝謝，就像最近關於汽車關稅的一些進展一樣，美國宣布將向汽車製造商提供高達在美國組裝的汽車價值 15% 的抵免額，然後可用於抵消進口零件的價值。我知道 Steel 並不是特別的。

Talked about in that announcement, but does that announcement, impact your ability to pass on pricing into the US at all or does that impact, demand, for your sales into the US at all just trying to see if there's any impact from that announcement.

在公告中談到了這一點，但該公告是否會影響您將定價轉嫁到美國的能力，或者是否會影響您在美國銷售的需求，只是想看看該公告是否有任何影響。

Hi James, this is Mike. First of all, welcome to the to the call and thank you for picking up coverage on Algoma Steel. I think the biggest impact of the recent announcements yesterday around the auto industry is just it gives more certainty to the entire automotive supply chain around. What the exact impact of the current tariff's regime will be, and I think anytime you have more certainty, it leads to better predictability by the whole supply chain so it kind of helps us from understanding what the volume levels will be and probably stronger volume levels because those will always dip when there is uncertainty, but on the pricing side, it really won't, we don't see it giving us, the opportunity to benefit from pricing, but certainly the lower level of uncertainty helps that segment for us.

你好，詹姆斯，我是麥克。首先，歡迎您參加電話會議並感謝您選擇 Algoma Steel 的報導。我認為昨天發布的有關汽車行業的公告的最大影響就是為整個汽車供應鏈提供了更多的確定性。當前關稅制度的具體影響是什麼？我認為，只要有更大的確定性，整個供應鏈的可預測性就會更高，這有助於我們了解交易量水平將會是多少，甚至可能達到更高的交易量水平，因為當存在不確定性時，交易量總是會下降，但在定價方面，它實際上不會，我們認為它不會給我們從定價中獲益的機會，但較低的不確定性肯定會對我們在這一領域有所幫助。

Okay, thank you very much and I'll turn the line over.

好的，非常感謝，我會轉台。

With no further questions at this time, I would like to turn the floor back over to Mike Moroka for closing remarks.

現在沒有其他問題了，我想把發言權交還給邁克·莫羅卡 (Mike Moroka) 做最後發言。

Thanks again for your participation in our first quarter 2025 earnings conference call and your continued interest in Algoma Steel. We look forward to updating on our results and progress when we report our second quarter results this summer. Have a great day.

再次感謝您參加我們的 2025 年第一季財報電話會議以及您對 Algoma Steel 的持續關注。我們期待在今年夏天報告第二季業績時更新我們的業績和進展。祝你有美好的一天。

Thank you, this will conclude today's conference. We thank you for your participation. You may now disconnect your lines.

謝謝大家，今天的會議到此結束。我們感謝您的參與。現在您可以斷開線路了。