Algoma Steel Group Inc. shares fall in mid-morning trading Wednesday after the company warned that shipments and prices for its products were lower and it faced operational challenges in its fiscal second quarter that will affect earnings.
At 11:09 a.m. ET, its shares were down 9.9% at C$9.16.
The Sault Ste. Marie, Ontario-based steelmaker said that a delay in commissioning its plate-mill modernization was the most significant challenge it faced, made worse by workforce shortages.
It said it expects a decline in shipments to an estimated 415,000 to 425,000 metric tons for the quarter and adjusted earnings before interest, tax, depreciation and amortization of about 75 million Canadian dollars ($54.6 million) to C$80 million. Analysts polled on FactSet were expecting C$125.5 million for the period.
Algoma said it is currently addressing all the issues weighing on the company in the quarter, and most plate mill issues have been resolved and it is operating at above 80% capacity.
Meanwhile, a coal conveyor that was damaged by fire in early August forced higher costs on the company, though Algoma said repair work is expected to be completed in early October which should allow internal coke production to return to full capacity.
Chief Executive Officer Michael Garcia said: "Our projected fiscal second-quarter results largely reflect previously disclosed operational challenges, as well as the continued decline in prices for our finished products, both of which had a negative impact on overall profitability."
