Mr. Gregg Ruhl reports

ALGOMA CENTRAL CORPORATION REPORTS FINANCIAL RESULTS FOR FISCAL 2023

Algoma Central Corp. has released its results for the year ended Dec. 31, 2023. Algoma reported revenues of $721,220, a 6-per-cent increase compared with the same period in 2022. Net earnings for 2023 were $82,870 compared with $119,966 for the same period in 2022. Prior year results included a $9,977 gain from the sale of Station Mall and a $10,848 impairment reversal. The company reported 2023 EBITDA (earnings before interest, taxes, depreciation and amortization) of $187,115 compared with $204,961 for the same period in 2022. All amounts reported below are in thousands of Canadian dollars, except for per-share data and where the context dictates otherwise.

"Despite rate pressures in some markets and a high dry-docking year, our solid 2023 financial results underscores our resilience and adaptability," said Gregg Ruhl, president and chief executive officer of Algoma. "As we look forward into 2024, we remain agile and committed to navigating economic uncertainty and changing markets with a strong and dependable fleet of vessels and strategic foresight. The Fure Vanguard, the first of 10 newbuild tankers under construction for our FureBear joint venture, was delivered in February and will load her first cargo in March, while the Algoma Bear, our newest Equinox Class self-unloader, is set to arrive this spring. As we eagerly await their arrivals, our teams are diligently preparing our domestic fleets for the upcoming 2024 navigation season," concluded Mr. Ruhl.

Financial highlights: fiscal 2023 compared with 2022

Net earnings decreased 31 per cent to $82,870 compared with $119,966 in 2022. Basic earnings per share were $2.15 compared with $3.17 and diluted earnings per share were $2 compared with $2.89. Earnings in 2022 include a $9,977 gain on the sale of Station Mall within the investment properties segment and an impairment reversal of $10,848 within the domestic dry-bulk segment. Excluding these other items, earnings decreased 16 per cent.

Domestic dry-bulk segment revenue increased 13 per cent to $408,170 compared with $360,139 in 2022, reflecting higher base freight rates and 7 per cent higher volumes, which drove a 14-per-cent increase in revenue days. Operating earnings decreased 9 per cent to $59,379 compared with $65,373 for the prior year, entirely due to the $14,759 impairment reversal recorded in 2022. Excluding the impairment reversal, operating earnings increased 17 per cent.

Revenue for product tankers increased 11 per cent to $132,166 compared with $118,686 in 2022. All domestic tankers were fully utilized during the year and additional revenue days were generated as we introduced new vessels to the fleet prior to the departure of retiring vessels. Despite the higher revenue, segment operating earnings decreased 37 per cent to $8,229 compared with $13,109 in 2022, reflecting the increased operating costs of dry-dockings this year.

Ocean self-unloaders segment revenue decreased 8 per cent to $178,031 compared with $193,730 and operating earnings decreased 36 per cent to $25,723 compared with $40,442 in 2022, mainly as a result of a significantly higher number of dry-dockings in 2023, resulting in 11 per cent fewer revenue days.

Global short sea shipping segment equity earnings were $21,271 compared with $31,712 for the prior year; 2023 equity earnings include a $545 gain on the sale of one vessel and 2022 equity earnings include a $7,814 gain on the sale of three vessels. Excluding these gains, earnings decreased 13 per cent. Earnings were impacted by reduced mini-bulker and handy-size fleet earnings as a result of a softening of freight rates compared to the prior year, partially offset by increased earnings in the cement fleet.

The MD&A (management's discussion and analysis) for the years ended Dec. 31, 2023, and 2022 includes further details. Full results for the years ended Dec. 31, 2023, and 2022 can be found on the company's website and on SEDAR.

2024 business outlook

In the domestic dry-bulk segment, customer demand should be relatively strong in 2024, with all domestic dry-bulk vessels expected to be in service during the year. Opportunities for additional domestic and export iron ore, along with strong grain demand and steady construction volumes are expected to offset a potential reduction in salt volumes driven by the mild winter in the Great Lakes-St Lawrence region. The spring arrival of the Algoma Bear, the newest Equinox Class self-unloader, replacing the recently retired Algoma Transport, is expected to drive an increased rate of earnings when coupled with contractual freight rate escalation and anticipated higher earnings from new business.

The company expects customer demand in the product tanker segment to be steady in 2024 and for fuel distribution patterns within Canada to support strong vessel utilization for the vessels throughout the year. Subsequent to 2023, two additional tankers were purchased. The vessels will initially be on bareboat charters back to the sellers. Following completion of their bareboat charters later this year, Algoma plans to begin trading one vessel in the company's Canadian fleet and one in Europe.

In the ocean self-unloader segment, volumes in 2024 are expected to remain steady and vessel utilization is expected to improve with substantially fewer scheduled dry-dockings compared to 2023.

In the global short sea shipping segment, the company expects consistent earnings from the cement fleet, maintaining a high level of fleet utilization. The segment is likely to face continued rate pressure due to continuing global economic and geopolitical situations, resulting in a softening of mini-bulker and handy rates in the future. Despite the lower rates, the company does not anticipate any adverse effects on volumes and utilization. In addition to the Fure Vanguard, a second Vinga series newbuild product tanker is expected to enter service for FureBear in the third quarter, with a third scheduled for the fourth quarter.

Normal course issuer bid

Effective March 21, 2023, the company renewed its normal course issuer bid (NCIB) with the intention to purchase, through the facilities of the TSX, up to 1,926,915 of its common shares, representing approximately 5 per cent of the 38,538,301 shares which were issued and outstanding as at the close of business on March 7, 2023. Under the current NCIB, 515,461 shares were purchased and cancelled for a weighted average purchase price of $15.19 for the year ending Dec. 31, 2023.

The company intends to renew its normal course issuer bid upon receipt of the required approvals from regulatory authorities.

Cash dividends

As previously announced, the company's board of directors authorized payment of a quarterly dividend to shareholders of 19 cents per common share. The dividend will be paid on March 1, 2024, to shareholders of record on Feb. 16, 2024.

We seek Safe Harbor.