RBC Capital Cuts Algoma Steel (ASTL) PT to C$8 Following Q2 Net Loss
Algoma Steel Group reported a net loss of $110.6 million, which was a sharp contrast to the net income of $6.1 million in the prior year's quarter. Adjusted EBITDA was a loss of $32.4 million, which reflected a negative margin of 5.5%. This was driven by a 10.5% year-over-year decline in steel revenue to $534 million, as well as lower steel shipments of 472,000 net tons, down 6.2% from the previous year.
A factory worker operating a machine that processes steel products.
The average net sales realization was $1,132 per ton, a decrease from $1,187 per ton in the prior year period, while the average cost per ton of steel products sold increased by 7% year-over-year to $1,144. A major factor contributing to the financial downturn was $64 million in direct tariff costs on outbound steel shipments to the US, which is a market now effectively closed to Canadian steel producers due to prohibitive tariffs. The company also reported ending the quarter with inventories valued at $736 million, a decrease from $800 million in the prior year quarter.
Algoma Steel Group Inc. (NASDAQ:ASTL) produces and sells steel products in Canada, the US, and internationally.
While we acknowledge the potential of ASTL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the .
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Disclosure: None. This article is originally published at Insider Monkey.
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