Algoma Steel Group Inc.

Greetings and welcome to the Algoma Steel Group Fiscal First Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. A brief question and answer session will follow the formal presentation. As a reminder, this call is being recorded. I would now like to turn the call over to Michael Moraka, Vice President, Corporate Development and Treasurer. Thank you, Michael. You may begin.

Good morning, everyone, and welcome to Algoma Steel Group Inc.' 's first quarter fiscal 2025 earnings conference call. Leading today's call are Michael Garcia, our Chief Executive Officer, and Rajat Marwa, our Chief Financial Officer. As a reminder, this call is being recorded and will be made available for replay later today in the investor section of Algoma Steel's website. I would like to remind you that comments made on today's call may contain forward-looking statements within the meanings 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, which differs from US GAAP, and our discussion today includes references to certain non-IFRS financial measures. 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 two of the accompanying earnings presentation and to also to refer to the risks and assumptions outlined in Algoma Steel's first quarter fiscal 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. Our fiscal year runs from April 1st to March 31st and our financial statements have been prepared for the quarters ended June 30, 2024 and June 30, 2023. Please note all amounts referred to on today's call are in Canadian dollars unless otherwise noted. Following our prepared remarks, we will conduct a question and answer session. I will now turn over the call to our Chief Executive Officer, Michael Garcia. Mike?

Thank you, Mike. Good morning, and thank you for joining us to discuss our fiscal first quarter 2025 results. Ensuring the safety of our employees remains a core value and top priority for our company. This unwavering commitment led to significant improvements in our lost time injury performance during fiscal 2024 with continued focus into the current fiscal year. Our focus on safety is more crucial than ever as our site continues to be a hub of activity with the EAF project advancing. This dedication is further emphasized in Algoma's second annual ESG report, released this past Monday, which delves into a wide range of topics across the spectrum of environmental, social, and governance in greater detail. The report highlights our ongoing efforts not only in maintaining safety standards, but also in advancing our broader ESG commitments. reinforcing our role as a leader in sustainable and responsible business practices. Next, I'll cover the key events and milestones during our fiscal first quarter, as well as give an update on the progress at our transformative EAF project. I will then turn the call over to Rajat for a deeper dive into the numbers and a discussion of our strong liquidity and balance sheet, before closing with an update on market conditions. There are a few important themes I would like to get across on this call. First, our results for the quarter reflected overall conditions in steel markets, resulting in lower volumes and realized prices. Shipment volumes were also softer, reflecting the planned outage at our plate and strip facility in April. We prioritize plate production coming out of the outage and expect that we will continue to ramp up volumes over the next several quarters. Second, our balance sheet and liquidity are strong, having been bolstered by our US $350 million notes offering in April, leaving us with cash at quarter end of almost $500 million and total liquidity of over $800 million. We are well-funded to complete our EAF project. And finally, the EAF project is approaching a truly exciting milestone. Nearing the planned beginning of commissioning of Unit 1 in our calendar fourth quarter. Every day that goes by de-risks the project and brings us another step closer to being one of the greenest producers of steel in North America. Now let me give you some additional color on those key themes. Our results for fiscal first quarter of 2025 were in line with our previously disclosed guidance for both shipments and adjusted EBITDA. They reflected a continuation of the challenging market conditions we have seen this year in steel pricing. We are laser focused on ensuring the safe operation of our existing legacy facilities, some of which are over 70 years old, as we make the transition to EAF steelmaking. All told, the combination of lower shipments and softer realized steel prices led to an overall decline in revenues, adjusted EBITDA and cash flow generation versus the prior year period. As discussed on our last call, during the quarter we successfully completed substantially all of the remaining upgrades related to the modernization of our plate mill. This upgrade involved installing new equipment across the facility that has enhanced product quality and is resulting in a steady ramp to higher plate shipments. Despite the facility being offline for three weeks, Our plate shipments in the first fiscal quarter of 2025 were approximately 61,000 tons. The second phase of our two-part plate mill modernization project originally called for a final multi-week outage later this year. However, our team was able to accelerate additional work during this outage so that the vast majority of the modernization project at the facility is now substantially complete. We expect any remaining items to be addressed with other planned maintenance activities over the coming year. We expect our fiscal second quarter plate production to be close to 90,000 tons as we execute a steady ramp over the balance of the fiscal year towards our expected annual run rate capacity of over 650,000 net tons. With our previously announced exit from the wide coil market during our 2025 fiscal year, we will be in position to prioritize plate production and sales, taking advantage of our position as Canada's only discrete producer of plate products. This should result in a more favorable product mix that is expected to drive meaningful margin enhancement. With the maintenance outages on the blast furnace and the plate mill upgrade complete, our operations are running normally. and we continue to expect solid production levels in the second half of calendar 2024. In April, we completed a US $350 million note offering, which bolstered our liquidity position substantially as we enter the home stretch of our EAF project construction. Cash on hand at quarter end was almost half a billion dollars, and when combined with our undrawn credit facility, gives us great flexibility and security to execute our strategic growth strategy. Now let me give you an update on our progress during the quarter on our electric arc furnace project. This is a truly exciting time in Sault Ste. Marie as we continue to see the skyline change at the site of the EAF, with the exterior sheeting closing the building in anticipation of commissioning activities commencing by the end of this year. With EAF steel production expected by the end of the calendar first quarter of next year, we will begin the ramp towards a shipping capacity of approximately 3 million tons per year. During the quarter, cumulative investment in the EAF project reached $611 million. To date, we have committed contracts totaling approximately $850 million with over 90% tied to fixed price contracts. Progress to date on both the construction of the project and the contracted portion of work yet to be completed has significantly de-risked the project budget. We expect that all remaining contracted work will be settled during the current quarter. As a reminder, our startup plan continues to include normal production from our existing steelmaking facility while ramping up steel production from our EAFs in calendar 2025. followed by a complete switch to EAF production. In summary, in very tough market conditions, we focused on what was within our control in the quarter, operating our existing facilities safely, completing the important upgrades at our plate mill, and advancing the EAF project on schedule and on budget. Near-term pricing weakness can't dampen our excitement for what's happening at our company. and the huge step forward it represents for Algoma Steel and our community. I'd like to once again thank all our employees for their hard work, dedication, and professionalism. Now I will pass the call over to Rajat to go over our financial results for the quarter. Rajat?