IPSCO Reports Continued Strong Quarterly Results

IPSCO Inc. announced third quarter sales of $705 million, an increase of 10 percent over the same quarter last year and 6 percent over the prior quarter. Income before tax was $216 million, 8 percent higher than the third quarter of 2004 and 1 percent higher than the prior quarter.

IPSCO's favorable sales performance versus the prior year and prior quarter was driven by record energy tubular sales volumes partially offset by declines in steel mill product sales related to a planned maintenance outage at the Montpelier Steelworks and unplanned outages at the Mobile Steelworks due to Hurricanes Dennis and Katrina.

Total third quarter shipments were 848,000 tons, virtually flat compared to last year, but 44,000 tons greater than the prior quarter due to record energy tubular shipments of 216,000 tons and large diameter pipe shipments of 45,000 tons. Energy tubular shipments increased 46 percent and 39 percent, respectively over last year and prior quarter. IPSCO's average third quarter product price was $832 per ton, inclusive of surcharge, comparable to $760 per ton a year ago and $830 in the second quarter. The impact of higher energy and large diameter pipe shipments offset a decline in steel mill product pricing.

"IPSCO withstood the impact of planned and unplanned outages at our U.S. steelworks as well as a temporary decline in demand from service centers early in the quarter. Our third quarter operating income of $235 per ton remains among the highest in the industry," said David Sutherland, President and Chief Executive Officer.

"We are well positioned to take advantage of strong end user demand for our steel mill products and anticipated record activity in the energy tubular sector in the fourth quarter. As mentioned last quarter, large diameter pipe shipments in the fourth quarter are expected to increase significantly. We anticipate our shipment volumes for the fourth quarter will increase in all of these product lines."

Through September, sales totaled a record $2.1 billion, an increase of 27 percent over the same time last year. The company’s gross margin of 34 percent this year improved from 26 percent during the same time period of 2004. Steel mill product sales of $1.3 billion increased $257 million from a year earlier. Steel mill average pricing increased $176 per ton, while tons shipped declined 83,000 or 5 percent.

The company believes that end user demand for its steel mill products will remain strong throughout the year and into 2006. Steel mill product orders increased rapidly in September and October due to continued strength in orders from end users, including several large project orders, and also as service centers returned to buying at higher levels. Our order books are fully committed for the remainder of the year. All steelworks have successfully completed required annual maintenance programs and are poised to satisfy the increased demand.