Algoma Steel reports revenue losses for second quarter
The largest employer in Sault Ste. Marie, Ontario, Algoma Steel, recently reported their revenue dropped 41% during the second quarter of 2022.
Algoma Steel shipped over 435,000 tons of steel in the three-month period (July to September). But that's over 150,000 fewer tons when compared to the last year’s second quarter data.
The company is attributing the losses to rising costs and the instability of steel markets.
On a conference call with investors, CEO Michael Garcia said Algoma has continually been impacted by the COVID-19 pandemic.
"We experienced a concentrated [COVID-19] outbreak," said Garcia. "We are implementing various measures to address labor availability, including cross training more employees to better handle an absenteeism event."
On top of supply chain issues, rising costs and labor issues, Garcia mentioned during the call that one of the company’s facilities caught fire in August. Garcia said no one was injured, but the accident impacted Algoma’s ability to produce coke, a type of coal that fuels steel making.
"All repairs are complete," said Garcia, referring to the facility that caught fire. "We are operating the coke ovens at capacity. The fire negatively impacted our ability to produce coke internally during the quarter, forcing us to buy third party product which unfavorably impacted cost and profitability."
Garcia said the price of steel has been declining for most of the year and that the war in Ukraine has also factored into global market values.
According to Algoma, the average price per ton of steel fell 21% from the first to second quarter this year.