Mr. Gregg Ruhl reports

ALGOMA CENTRAL CORPORATION REPORTS FINANCIAL PERFORMANCE FOR THE 2023 SECOND QUARTER

Algoma Central Corp. has released its results for the three and six months ended June 30, 2023. Algoma reported revenues during the 2023 second quarter of $202,406, a 10-per-cent increase compared with the same period in 2022. Net earnings for the 2023 second quarter were $33,144, compared with $47,045 for the same period in 2022; earnings in 2022 included a $10,563 gain from the sale of Station Mall. The company reported 2023 second-quarter EBITDA (earnings before interest, taxes, depreciation and amortization) of $65,204, compared with $61,412 for the same period in 2022. All amounts reported herein are in thousands of dollars, except for per-share data and where the context dictates otherwise.

"This year we have focused on driving long-term value for our stakeholders by optimizing our diversified growth, while maintaining our operating vigilance in changing markets," said Gregg Ruhl, president and chief executive officer of Algoma. "Historically, we know shifting market demand and economic challenges have not stopped Algoma's progress, but instead made us think differently in order to adapt and effectively move our strategic plan forward. In the second quarter, we advanced several incremental growth investments demonstrating our ability to find and execute on attractive opportunities to deploy capital."

Financial highlights -- second quarter 2023 compared with 2022:

• Domestic dry-bulk segment revenue increased 27 per cent to $126,584 compared with $99,288 in 2022, reflecting 17-per-cent-higher volumes, which drove a 24-per-cent increase in revenue days. Operating earnings increased 53 per cent to $32,806 compared with $21,504 for the prior year, mainly reflecting full-fleet utilization this quarter, partially offset by higher operating costs.
• Revenue for product tankers decreased 12 per cent to $28,046 compared with $31,923 in 2022. This was mainly driven by higher off-hire days on two vessels, which resulted in 7-per-cent-fewer revenue days, and a decrease in fuel cost recovery. Segment operating earnings decreased to $1,078 compared with $3,683 in 2022, reflecting the higher off-hire days and increased operating costs.
• Ocean self-unloaders segment revenue decreased 6 per cent to $47,120 compared with $50,292 as a result of higher scheduled dry-dockings driving 8 per cent fewer revenue days, and lower fuel pass through charges. Operating earnings decreased 28 per cent to $8,003 compared with $11,139 in 2022, mainly as a result of dry-dockings and lower daily earning rates.
• Global short sea shipping segment equity earnings were $5,155, compared with $9,454 for the prior year; 2022 equity earnings include a $4,782 gain on the sale of two vessels; excluding this gain, earnings increased 10 per cent. The higher earnings were driven by increased earnings in the cement fleet due to the larger fleet size this year and strong freight rates, partially offset by lower earnings in the mini-bulker and handy fleets as a result of a softening of freight rates and the smaller mini-bulker fleet this year.

The management's discussion and analysis for the three and six months ended June 30, 2023, includes further details. Full results for the three and six months ended June 30, 2023, can be found on the company's website and on SEDAR+.

2023 business outlook

Looking ahead to the second half of 2023, typical seasonal weakness in grain shipments and a soft market for export iron ore has led to a brief summer lay-up on one vessel in the domestic dry-bulk segment. Full-fleet utilization is expected to resume in August and continue through the balance of the year, driven by strong demand for vessel capacity. Recent weather conditions in the Canadian prairies have resulted in some uncertainty about the 2023 grain harvest; however, demand in other sectors is expected to offset any weakness in agricultural products. Customer demand in the product tanker segment is projected to remain steady in the second quarter, although energy markets remain volatile due to continuing hostilities in Europe. While vessel utilization is expected to be robust, inflation is anticipated to continue to impact costs going forward.

In Algoma's international businesses, vessel supply at the ocean self-unloader pool level appears to be fairly well balanced for the remainder of the year, although three Algoma vessels will be dry-docked. The aggregate industry experienced an anticipated volume decline in the second quarter, and the sector is expected to continue facing challenges throughout the year; however, volumes in other sectors are projected to remain steady. In Algoma's global short sea shipping segment, the company anticipates steady revenues from the cement fleet, with strong fleet utilization. Rate pressure resulting from continuing global economic and geopolitical situations is expected to impact the segment. Rate levels in the mini-bulker and handy-size fleets are projected to be lower over the course of the year, though volumes and utilization are not expected to be affected.

Normal course issuer bid

Effective March 21, 2023, the company renewed its normal course issuer bid with the intention to purchase, through the facilities of the Toronto Stock Exchange, up to 1,926,915 of its common shares, representing approximately 5 per cent of the 38,538,301 shares that were issued and outstanding as at the close of business on March 7, 2023. Under the current NCIB, 442,395 shares were purchased and cancelled for a weighted average purchase price of $15.25 for the six months ended June 30, 2023.

Cash dividend

The company's board of directors has authorized payment of a quarterly dividend to shareholders of 18 cents per common share. The dividend will be paid on Sept. 1, 2023, to shareholders of record on Aug. 18, 2023.

About Algoma Central Corp.

Algoma Central is a global provider of marine transportation that owns and operates dry and liquid bulk carriers, serving markets throughout the Great Lakes-St. Lawrence Seaway and internationally. Algoma is aiming to reach a carbon emissions reduction target of 40 per cent by 2030 and net-zero by 2050 across all business units with fuel-efficient vessels, innovative technology and alternative fuels.

We seek Safe Harbor.