Mr. Gregg Ruhl reports

ALGOMA CENTRAL CORPORATION REPORTS FINANCIAL PERFORMANCE FOR THE 2023 THIRD QUARTER

Algoma Central Corp. has released its results for the three and nine months ended Sept. 30, 2023. Algoma reported revenues during the 2023 third quarter of $205,888, a 3-per-cent increase compared with the same period in 2022. Net earnings for the 2023 third quarter were $35,745, compared with $42,533 for the same period in 2022. The company reported 2023 third quarter EBITDA (earnings before interest, taxes, depreciation and amortization) of $68,242, compared with $73,604 for the same period in 2022. All amounts reported herein are in thousands of Canadian dollars, except for per-share data and where the context dictates otherwise.

"Strong customer demand and our focus on operational excellence continued to drive our steady results in the third quarter," said Gregg Ruhl, president and chief executive officer of Algoma. "As cargo demand varies, we are committed to continually enhancing our fleet operations to provide the best possible service for our customers. The raw materials we transport on behalf of our customers are essential to North American and global markets, serving as a cornerstone in sustaining economic growth across the vital industries these markets support," concluded Mr. Ruhl.

Financial highlights -- third quarter 2023 compared with 2022

Domestic dry-bulk segment revenue increased 11 per cent to $128,449 compared with $115,996 in 2022, reflecting higher base freight rates and 4 per cent higher volumes, which drove a 12-per-cent increase in revenue days. Operating earnings increased 16 per cent to $35,341 compared with $30,453 for the prior year, mainly reflecting additional customer demand this quarter, partially offset by higher operating costs.

Revenue for product tankers increased 4 per cent to $34,134 compared with $32,749 in 2022. This was mainly driven by higher freight rates and increased revenue generated by one vessel that entered domestic operations during the quarter. These items were partially offset by 4 per cent fewer revenue days. Despite the higher revenue, segment operating earnings decreased to $1,759 compared with $5,888 in 2022, reflecting more vessels on dry dock in the current year and increased operating costs.

Ocean self-unloader segment revenue decreased 15 per cent to $42,469 compared with $49,927 and operating earnings decreased 39 per cent to $4,773 compared with $7,856 in 2022, mainly as a result of a higher number of dry dockings falling in the current-year period.

Global short sea shipping segment equity earnings were $8,071 compared with $12,103 for the prior year; 2022 equity earnings include a $2,922 gain on the sale of two vessels; excluding this gain, earnings decreased 12 per cent. Earnings were driven by increased earnings in the cement fleet and reduced mini-bulker and handy-size fleet earnings as a result of a softening of freight rates compared with the prior-year period.

The MD&A (management discussion and analysis) for the three and nine months ended Sept. 30, 2023, and Sept. 30, 2022, includes further details. Full results for the three and nine months ended Sept. 30, 2023, and Sept. 30, 2022, can be found on the company's website and on SEDAR+.

2023 business outlook

On Oct. 22, 2023, subsequent to the quarter, St. Lawrence Seaway workers, represented by Unifor, began a work stoppage that resulted in a full closure of the Seaway system. The parties reached a tentative contract deal on Oct. 29, 2023, and the St. Lawrence Seaway reopened on Oct. 30, 2023. During the 72-hour strike notice received prior to closure and throughout the eight-day strike, the majority of the domestic dry-bulk fleet was at anchor, in standby berths or arranging for changes to their course. Although the seaway has reopened, the backlog created by this closure caused further delays before the fleet was able to fully resume trading. The full impact of the closure is unknown as the company is in the process of assessing the repercussions of the delays. The company's fleet was already fully booked for the fourth quarter given seasonally high demand to move the new grain harvest and build winter inventories of iron ore, salt and construction inputs. Given the capacity lost due to the strike, although the company will attempt to shift cargos to next year, some volumes will be lost.

Algoma expects customer demand in the product tanker segment to remain steady through the balance of the year, although energy markets are expected to remain volatile. Vessel utilization is expected to be strong; however, the company does expect inflation to continue to impact costs going forward. The Birgit Knutsen, soon to be renamed the Algoluna, will enter service under Canadian flag during the fourth quarter, replacing the Algosea when she retires in November.

In Algoma's international businesses, vessel supply at the ocean self-unloader pool level is tight for the remainder of the year, with two additional Algoma vessels on dry dock. Volumes in the aggregate industry are under pressure while volumes in the coal and gypsum sectors are expected 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 anticipated to continue to impact the segment going forward as mini-bulker and handy rates soften. Volumes and utilization are not expected to be affected by the lower rates.

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 nine months ending ended Sept. 30, 2023.

Cash dividends

The company's board of directors authorized payment of a quarterly dividend to shareholders of 18 cents per common share. The dividend will be paid on Dec. 1, 2023, to shareholders of record on Nov. 17, 2023.

Algoma Central is a global provider of marine transportation that owns and operates dry-bulk 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.