Mr. Gregg Ruhl reports

ALGOMA CENTRAL CORPORATION REPORTS FINANCIAL RESULTS FOR THE 2024 FIRST QUARTER

Algoma Central Corp. today released its results for the three months ended March 31, 2024. Algoma reported revenues of $109,214, a 2-per-cent decrease compared with the same period in 2023. Net loss for 2024 was $17,253 compared with a net loss of $19,640 for the same period in 2023. Prior-year first quarter results included a $3,481 after-tax gain from the sale of two vessels in the product tankers segment. Excluding this gain, the 2024 first quarter loss was 25 per cent lower than the prior year. Due to the closing of the canal system and the winter weather conditions on the Great Lakes-St. Lawrence Seaway, the majority of the domestic dry-bulk fleet does not operate for most of the first quarter. All amounts reported below are in thousands of Canadian dollars, except for per-share data and where the context dictates otherwise.

"Algoma's first quarter results surpassed the past five years," said Gregg Ruhl, president and chief executive officer of Algoma Central. "The ocean self-unloaders segment achieved its strongest first quarter yet, while the product tankers segment continued its strong earnings trend after a year of transition and growth. Our joint ventures also made solid contributions, and we anticipate further earnings growth with the introduction of three more new-build product tankers into our FureBear joint venture later this year. As the 2024 navigation season progresses, the Algoma Bear, our newest Equinox Class self-unloader, is scheduled to commence regular operations in the domestic dry-bulk fleet in May, marking another milestone for us on the Great Lakes-St. Lawrence Seaway as we also set sail on our 125th anniversary year."

Financial highlights: first quarter 2024 compared with first quarter 2023

Net loss decreased 12 per cent to $17,253 compared with $19,640 in 2023. Basic and diluted loss per share were 44 cents compared with 51 cents. Results for 2023 included a $3,481 after-tax gain on the sale of two vessels in the product tankers segment.

EBITDA (earnings before interest, taxes, depreciation and amortization) for the first three months of $(861) is near breakeven and the best first quarter EBITDA performance ever for the company.

Revenue for product tankers increased 6 per cent to $34,046 compared with $32,081 in 2023, driven primarily by a 3-per-cent increase in revenue days, largely due to having seven vessels operating at full capacity, coupled with higher freight rates on new vessels. Segment operating earnings increased $2,832 to $3,976.

Although ocean self-unloaders segment revenue decreased 3 per cent to $43,199 compared with $44,385, operating earnings increased 69 per cent to $8,354 compared with $4,952 in 2023, primarily due to the reduced numbers of vessels on dry-dock this quarter.

Domestic dry-bulk segment revenue decreased 10 per cent to $31,075 compared with $34,499 in 2023, reflecting a 6-per-cent decrease in revenue days. Operating loss increased 6 per cent to $35,613 compared with $33,643 in 2023.

Global short sea shipping segment equity earnings were $1,832 compared with $1,998 for the prior year. Earnings were impacted by lower rates for the mini-bulker and handy-size fleets and higher off-hire time due to dry-dockings in the handy-size fleet. The decrease was largely offset by increased earnings in the cement fleet.

EBITDA

The company uses EBITDA as a measure of the cash generating capacity of its businesses. The attached table provides a reconciliation of net loss in accordance with GAAP to the non-GAAP EBITDA measure for the three months ended March 31, 2024, and 2023 and presented in the attached table.

The MD&A (management's discussion and analysis) for the three months ended March 31, 2024, and 2023 includes further details. Full results for the three months ended March 31, 2024, and 2023 can be found on the company's website and on SEDAR+.

2024 business outlook

In the domestic dry-bulk segment, the company expects a softening in demand for domestic dry-bulk capacity with deicing salt volumes dropping more than anticipated due to the record mild winter across the Great Lakes-St. Lawrence region. Weaker markets for export iron ore and construction raw materials are also expected to reduce cargo volume. Consequently, Algoma has adjusted the expected sailing dates for some of its less efficient vessels to align with market demand. There are positive indicators that domestic iron ore volume will increase and grain shipments are expected to hold relatively steady with improved soil moisture levels creating potential for a large 2024 grain crop.

In the product tanker segment, the company anticipates customer demand to remain steady in 2024 and for fuel distribution patterns within Canada to support strong vessel utilization for the vessels trading under Canadian flag throughout the year. With delivery of its first FureBear tanker having occurred in February, nine additional new tankers are being constructed at China Merchants Jinling Shipyard in Yangzhou, China, with delivery expected between mid 2024 and late 2026, including three in 2024.

Internationally, in the ocean self-unloaders segment, volumes are expected to improve modestly for the remainder of the year and vessel utilization is expected to improve in 2024 with substantially fewer dry-dockings compared with 2023. Two out of the three new-build kamsarmax-based ocean self-unloader orders are scheduled to begin construction this year. In the company's global short sea shipping segment, the company expects consistent earnings from the cement fleet with the assets largely employed on longer-term time charter contracts. The handy-size and mini-bulker fleets in this segment are likely to continue to face rate pressures due to continuing global economic and geopolitical situations, with rates softening since the latter half of 2023. Despite the lower rates, the company does not anticipate any adverse effects on volumes and utilization.

Normal course issuer bid

Effective March 21, 2024, the company renewed its normal course issuer bid (the NCIB) with the intention to purchase, through the facilities of the Toronto Stock Exchange, up to 1,975,857 of its common shares representing approximately 5 per cent of the 39,517,144 shares which were issued and outstanding as at the close of business on March 7, 2024.

Cash dividends

The company's board of directors authorized payment of a quarterly dividend to shareholders of 19 per common share. The dividend will be paid on June 3, 2024, to shareholders of record on May 17, 2024. Following this dividend the company expects an adjustment to the conversion price of the convertible debentures, reducing it to $14.10.

We seek Safe Harbor.