Dofasco Reports Record Quarterly Earnings

Dofasco Inc. reported third quarter net income of $91.8 million, compared to $21.9 million in the third quarter of 2001. This represents Dofasco's highest ever quarterly earnings.

John Mayberry, Dofasco's chairman and CEO, commented on the results saying, "These earnings reflect continued strong demand for Dofasco and Gallatin's products and the benefits achieved from the very successful Hamilton hot mill improvement program completed in late 2001."

Dofasco's consolidated sales in the quarter were $930.8 million on shipments of 1.209 million tons tons. In the third quarter of 2001, consolidated sales were $719.2 million and shipments were 1.043 million tons.

Dofasco's Steel Operations segment, which includes the company's Hamilton operations, reported income before income taxes of $106.9 million in the third quarter, compared to $49.5 million pre-tax income reported in the same quarter of 2001. Shipments from Hamilton of 1.025 million tons, 16 percent higher than the 879,000 tons shipped in the third quarter of 2001.

Higher average selling prices for all products and a higher value-added sales mix resulted in the average revenue per ton of steel shipped from Hamilton in the quarter growing by $50 from the year-earlier period.

Higher electricity and scrap prices contributed to a slight increase in the average cost per ton of steel shipped in the quarter, although on a year-to-date basis the average cost per ton is lower than in 2001.

Gallatin Steel, Dofasco's joint venture steelmaking facility in Kentucky, also posted higher earnings due to record quarterly shipments and strong U.S. hot rolled selling prices.

Dofasco's 50 percent share of Gallatin's pre-tax income for the quarter increased to $24.1 million from a loss of $6.5 million in the third quarter of 2001. During the quarter, Gallatin shipped 368,000 tons compared to 328,000 tons in the same quarter in 2001.

Quebec Cartier Mining Company (QCM), Dofasco's joint venture iron ore mine in Quebec, continues to operate at reduced levels in a difficult iron ore market. QCM shipped 3.3 million metric tons of iron ore products in the quarter, down from 3.8 million metric tons in the same quarter a year ago. Dofasco's 50 percent share of QCM's loss before income taxes in the quarter was $4.4 million, compared to pre-tax income of $5.5 million in the third quarter of 2001.

During the quarter, Dofasco completed the acquisition of an advanced automotive tubular manufacturing and processing facility located in Marion, Ohio. The facility, now named Dofasco Marion Inc., started operations in mid- September. From its tubemaking facilities in Hamilton, Mexico and Ohio, Dofasco is now capable of manufacturing approximately 550,000 tons per year of value-added tubular product.