Steel Companies Report Profit for Quarter, Full Year

IPSCO Posts Solid Numbers for Year

IPSCO Inc. announced record sales of $1.08 billion, up 20 percent over 2001 and 14 percent higher than the previous record set in 2000. Net income was $20.3 million compared to $38.9 million last year. Operating profit per ton shipped for the year was $17, compared to $16 per ton in 2001.

Fourth quarter net income was $12.8 million. Sales for the quarter were $256.1 million, up $33.6 million or 15 percent over the fourth quarter of 2001.

"While IPSCO had record sales and production levels, and continued to enjoy solid market penetration as a result of our newer facilities in the United States, we were disappointed with our profitability," said David Sutherland, president and CEO. "Demand for our plate products was adversely affected by soft market conditions in the industrial markets we serve, and low drilling rates throughout North America hurt sales and earnings for tubular products, most notably oil country tubular goods in Canada."

Record annual sales volume of 2,896,900 tons exceeded 2001 shipments by 19 percent. Sales of steel mill products, comprising hot rolled coil, cut plate and discrete plate, totaled 2,115,000 tons. The 35 percent improvement over 2001 reflected the first full year of operation for the Mobile Steelworks. Sales volume for tubular products, which include standard pipe, hollow structurals, and energy related tubular products, fell by 11 percent.

Sales volume for the fourth quarter totaled 638,700 tons, up 6 percent over the fourth quarter of 2001. Quarterly sales of steel mill products were 461,400 tons, 16 percent higher than in the fourth quarter of 2001. Tubular product sales of 177,300 tons in the fourth quarter were down 15 percent from the year earlier period.

Sutherland concluded that “the outlook for overall product demand is one filled with considerable uncertainty based on market trends. Extremely soft conditions in the industrial markets we serve continue to depress steel mill product sales volume and pricing. Any change in this outlook for IPSCO's industrial markets would require an improvement in the overall economy. In addition, recent scrap market trends are resulting in cost increases. Consequently, the consensus of analysts' estimates of first quarter 2003 results is significantly higher than current conditions would warrant. While IPSCO expects to be profitable in the first quarter, the level will be heavily dependent on the performance of the energy tubular sector.”

Oregon Steel Mills Sees Profit for Quarter

Oregon Steel Mills, Inc. reported net income of $3.3 million for the fourth quarter of 2002 compared to net income of $.6 million for the fourth quarter of the previous year.

Fourth quarter 2002 product revenues of $225.7 increased 23 percent over fourth quarter 2001 revenues of $184.0 million. Average sales price per ton of $515 was a 12 percent increase over 2001 fourth quarter average sales price of $458. The increase in average sales price was primarily due to product mix. During the fourth quarter of 2002, the company experienced higher shipments of its welded pipe and rail products than in the comparable 2001 quarter.

Shipments for the fourth quarter of 2002 were 438,700 tons compared to 401,300 tons in the comparable 2001 quarter, an increase of 9 percent.

For the fiscal year the company reported net income of $13.5 million before extraordinary items and the cumulative effect of a change in accounting principle. The Company's product revenues and shipments for the year 2002 were $850.5 million and 1.8 million tons, respectively, compared to $707.0 million and 1.6 million tons for 2001.

Average selling price for 2002 was $477 per ton, up from $439 per ton in 2001. Operating income of $60 million, $34 per shipped ton, was 142 percent greater than 2001 operating profit of $24.8 million, $15 per shipped ton.

Joe Corvin, president and CEO of Oregon Steel Mills, stated, "Our results for 2002 reflect mixed market conditions for our products. In spite of lackluster economic conditions in some markets, the company had record shipments during 2002. Sales of welded pipe were strong and we enjoyed a dominant market share for our rail products. Plate markets, however, remained sluggish. While a number of steel products benefited from the 201 trade sanctions, plate was not one of them and pricing remained weak. During 2002, we were selective about the plate markets we entered and continued to seek out niche markets for specialty products. This strategy did allow us to achieve higher than average plate prices but resulted in reduced production volumes at our Portland plate mill."

This year the company expects to ship about 1.8 million tons. In the Oregon Steel Division, the product mix will shift from approximately 51 percent welded pipe shipments and 49 percent plate and coil to approximately 25 percent welded pipe and 75 percent plate and coil. This shift in product mix is expected to have a negative impact on the average sales price and operating income for the division.

The Company's Rocky Mountain Steel Mills Division expects rail and rod/bar sales to be similar to those experienced in 2002. Seamless pipe shipments will be dependent on market conditions in the drilling industry.

While the company anticipates that average product selling prices will be similar in 2003 as in 2002, higher raw material and energy costs are expected to have a negative impact on the operating income for the division.