Greetings, and welcome to the Algoma Steel Group Inc. Fourth Quarter 2025 Earnings Call. At this time, all participants are in a listen-only mode. If anyone should require operator assistance, as a reminder, this conference is being recorded. It is now my pleasure to introduce Laura Devoni, vice president of human resources and corporate affairs. Please go ahead.

Good morning, everyone, and welcome to Algoma Steel Group Inc. Fourth Quarter 2025 Earnings Conference Call. My name is Laura Devoni, vice president of human resources and corporate affairs, and I will be moderating today's call. The prepared remarks are Rajat Marwah, chief executive officer, and Mike Moraca, our chief financial officer. As a reminder, this call is being recorded and will be made available for replay later today in the Investors section of Algoma Steel Group Inc.'s corporate website at www.algoma.com. 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, 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 refer to the risks and assumptions outlined in Algoma Steel Group Inc.'s fourth 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. As a reminder, the company changed its fiscal year end from March 31 to December 31, resulting in a nine-month fiscal reporting period ending 12/31/2024. For ease of comparison, we will focus our comments today on the three- and twelve-month periods ending 12/31/2025 and 2024. Please also note that 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 the call over to our chief executive officer. Rajat?

Thank you, Laura. And good morning, everyone. Thank you for joining us to discuss our fourth quarter and full year 2025 performance. Before I get into our results, I want to acknowledge this is Mike's and my first earnings call as CFO and CEO, respectively, roles we formally assumed on January 1. I also want to recognize Michael Garcia, who led this company through one of its most consequential transformations and who left Algoma Steel Group Inc. in a fundamentally strong position. Employee safety remains our top priority and a core value. The scale of activity on our site today with the end of blast furnace operations and our EAF running around the clock demands an unwavering focus on safe execution, and I am proud of the discipline our teams have demonstrated throughout this transition. Every milestone we achieved in our transformation must be earned with the same commitment to sending every employee home safely, every day. Before I get into the details of the quarter, I want to highlight three key themes. First, the 50% US Section 232 tariff has permanently altered the landscape for Canadian steel producers. With the American market effectively closed to us, we have responded accordingly, exiting our primary blast furnace and coke oven operations, pivoting our entire commercial strategy towards the Canadian market, restructuring our cost base, and accelerating our transformation that positions Algoma Steel Group Inc. for the realities of this new trade environment. Second, we have the financial foundation to execute. The Canadian $500,000,000 in government-backed liquidity support combined with our ABL facility provides the runway we need to advance our transformation, reduce cash burn, and pursue new opportunities to diversify the business. Third, our operational pivot is not a plan. It is underway. Blast furnace and coke oven operations have been…

Thanks, Rajat. Good morning, and thank you all for joining the call. Before I get into the details, I want to remind listeners that our functional currency is the US dollar; we present our results in Canadian dollars. The Canadian dollar strengthened approximately 5% over the course of 2025, moving from roughly C$1.44 per US dollar at year-end 2024 to approximately C$1.37 at 12/31/2025. I would encourage you to keep that currency backdrop in mind as we go through the numbers. Our fourth quarter results included adjusted EBITDA that was a loss of $95,200,000, which reflects an adjusted EBITDA margin of minus 20.9%, and cash used in operating activities of $3,000,000. We finished the quarter with a strong balance sheet including $77,000,000 of cash, availability of $195,000,000 under our revolving credit facility, and $417,000,000 available under the large enterprise tariff loan facility. Now let me dive into key drivers of our performance. We shipped 378,000 net tons in the quarter, down 31% versus the prior-year quarter. The decrease in shipments was largely attributable to the impact of US tariffs, which, as Rajat said, effectively closed that market to our products. Net sales realizations averaged $1,077 per ton compared to $976 per ton in the prior-year period. The increase versus prior-year level reflects improvements in value-add product mix as a proportion of sales, partially offset by weaker market conditions. Plate pricing continued to enjoy a significant premium relative to hot-rolled coil during the quarter, driven by resilient demand. That resulted in steel revenue of $408,000,000, down 23.9% versus the prior-year period as the lower shipment volumes more than offset higher realized prices. On the cost side, Algoma Steel Group Inc.'s cost per ton of steel products sold averaged $1,332 per ton in the quarter compared to $1,032 per ton in the…

Thanks, Mike. Let me close with this. 2025 was the most challenging year in recent memory for Canadian steel producers. The 50% US Section 232 tariff dismantled the cross-border business model that had defined this industry for decades, flooded the Canadian market with excess supply, and forced every producer to fundamentally adjust how they operate. We were not immune to those pressures, and our financial results this year reflect that reality. But what I am most proud of is how this organization responded. We did not wait for conditions to improve. We were compelled to make difficult decisions, accelerating the wind-down of our blast furnace and coke oven operations ahead of our original timeline, pivoting our commercial strategy towards the Canadian market, and securing the financial resources to execute our transformation without compromising our future. Those were not easy calls, and they required conviction, speed, and coordination across every part of this business. None of this came without real human cost. The accelerated transition required us to wind down our blast furnace and coke oven operations earlier than planned, and that had meant issuing layoff notices to approximately a thousand of our colleagues, effective later this month. I want to be direct about this. Those are not just numbers. They are people who helped build this company. We have worked with our unions and government resources to put mitigation programs in place, and I am committed to the view that this is not the end of the story for Algoma Steel Group Inc.'s workforce. We are actively exploring product diversification initiatives to expand our footprint and support Canadian industrial policy, and we applaud the Canadian and Ontario governments for the measures they have taken to support the Canadian steel industry. The result is a fundamentally different Algoma Steel Group Inc.…

Operator, please give the instructions for the question and answer session.

We will now be conducting our question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. Our first question is from Katja Jancic with BMO Capital Markets.

Hi, thank you for taking my questions. Maybe starting on the shipment side, you mentioned first quarter shipments sequentially are going to be lower. But can you remind us how you are thinking about full-year shipments? And then also how this is going to be split between plate and sheet?

Hey, Katja. Good morning. It is Mike. I think that over the course of the year, we expect to have total shipments between 1,000,000 and 1,200,000 tons. There will be a little bit of a ramp as we are building up our capacity at the EAF, and we will see slightly lower shipments in the first quarter, but ramping up to a run rate in that 1,000,000 to 1,200,000 tons as the year progresses. So slightly lower in Q1, but growing over the course of the year.

And then on the mix?

The mix will be roughly 50/50, I would say, on the plate and sheet based on what we see today.

Okay. And maybe just shifting gears to your cost side. Can you talk about how much of your energy cost are exposed to the current spot market?

Sure. I think that we are generating power from our own natural-gas-fired power plant, so there is commodity price exposure to the natural gas price. And we do consume power directly from the grid, which is subject to Ontario's spot rate pricing. So, it is a nice mix to have because we do have the ability to generate our own power. So if the Ontario pricing does swing up to a higher price, we are generating our own as a safeguard. Further to that, as you know, we have the Northern Electricity Advantage Program, which is specific to Northern Ontario-based producers and does give us a C$20 per megawatt advantage on our power pricing.

And just on the natural gas, are you hedged at all, or are you fully on spot for your own power supply?

We generally would have fixed price for the most volatile months of the year, which is traditionally the winter months where we have fixed pricing. And then the other months where there is less volatility, we would take it on spot.

Okay. Thank you.

Our next question is from Ian Gillies with Stifel. Good morning, everyone.

Morning, Ian.

Can you provide an update on what you are seeing as it pertains to plate pricing in Canada? Obviously, over the last number of months, there have been some new government initiatives to try and keep imports out of the country, and I am just curious on how that is progressing and whether you are seeing that flow through into your price book.

Sure. So the pricing on the plate side is holding up. It is much better than the sheet pricing. On the sheet side, we are seeing a 40% lower pricing from the index. On the plate side, it is less than that. It is ranging anywhere between 15% to 20%. The pricing is definitely better. The measures that the government is taking definitely are helping. It is slow coming in right now, but we see a lot of inbounds coming from customers and some new customers for steel, and that is encouraging.

As it pertains to the HRC side, and pricing being 40% lower, can you just help reconcile that pricing discount versus what we might be seeing in the Fastmarkets Canadian price quote that is now out that is saying Canadian steel prices are around $800 a ton right now?

I do not know how those pricing are calculated by Fastmarkets, but the pricing in the market is roughly 40% lower. And it makes a lot of sense as well when you see what the tariffs are and what is happening in Canada. Over time, what we have seen is that pricing started strengthening a little bit in Canada where it was better. But overall, it is hovering around a 40% discount to the index.

As it pertains to the beam mill, can you maybe outline how or critical milestones that you think may be achieved or may be announced over the next, call it, twelve to eighteen months? Because it feels like bidding is moving along reasonably quickly, but formal contracts will not be announced until 2028. So just curious there.

So from our perspective, we are working on the beam project. It is a big project. So we are doing engineering, cost estimates, and timelines. We are also working on the market side. There is not much that I can share right now, but what I can say is that the beam market is one where the supply is less than the demand in Canada, and we are very well suited to support that market with our EAF. Now from Hanwha’s perspective, that is one of the components of, let us say, the whole project. Their application has been in, and I think the government is really moving pretty fast to decide which one will get it. I think the government will do the right job in finding the right partner for Canada. But from our perspective, we are moving fast on our assessment of this project, and once we have more details around it, we will definitely come out and disclose on the key milestones.

And last one for me. As you think about how the business progresses through the remainder of this year, where do you think CapEx ends up for the full year? And is there really much left on the EAF at this point?

Ian, I think that we have said we are at $920,000,000-ish or so. We do not expect any change in the total project budget. So we will incur those capital costs over the first half of this year as we ramp up the second EAF. As for sustaining CapEx, I think we are seeing a step-change lower as we have taken blast furnace and coke-making facilities out of the mix. So you should expect to see significantly lower sustaining CapEx in line with what we had mentioned in the past of being close to around $80,000,000 a year.

And one last one, actually. On the scrap side, can you just provide an update on how that has gone so far as it pertains to the EAF? And how your JV is working as well on the sourcing side?

It is going pretty well. The scrap availability and supply and the use is going pretty well. The JV is working fine, and we are ramping up pretty fast from that. So we are pretty happy with the way things are moving on the scrap side and also the availability.

Okay. Thank you very much. I will turn it back over.

Thanks, Ian. Thank you. There are no further questions at this time. I would like to hand the floor back over to Laura Devoni for any closing comments.

Thank you again for your interest in our fourth quarter 2025 earnings conference call and for your continued interest in Algoma Steel Group Inc. We look forward to updating you on our results and progress when we report our first quarter results in the spring.

This concludes today's conference. Thank you again for your participation. You may disconnect your lines at this time. Thanks, Paul.