IPSCO Announces Third Quarter Results

Note that IPSCO results are reported in US$ 

Lisle, Illinois, October 16, 2000 -- IPSCO Inc. (NYSE: IPS) announced today that its third quarter net income was $12.3 million, down 19 percent from the second quarter of this year and down 40 percent from the third quarter of 1999. After deducting preferred share dividends and interest on subordinated notes, net income available to common shareholders was $9.4 million and the basic earnings per common share were $0.23 for the quarter compared to $0.47 in the third quarter of 1999.

"The drop in profit from the year earlier period was principally due to a less favorable product mix, price erosion as the result of an influx of unfairly priced imports, and higher legal and research and development costs," said Roger Phillips, the company's President and Chief Executive Officer. Shipments at 524,300 tons surpassed those of the previous year's third quarter by seven percent.

Sales revenue at $223.0 million was up five percent over the third quarter of last year. Nine month sales were $717.3 million, an increase of 24 percent over the first nine months of 1999. Phillips said that this trend of higher sales should continue with the anticipated commissioning of the Mobile Steelworks early next year.

Steel mill products shipments at 231,200 tons were 25 percent ahead of the third quarter figure for 1999 while further fabricated products at 293,100 tons were down four percent.

Phillips added that the Montpelier Steelworks production was somewhat below an annualized one million ton rate due to a tougher than normal product mix involving higher priced, but more slowly produced, high strength pipe skelp and because of an unscheduled four day shutdown. At the Regina Steelworks a planned eight day outage was taken to undergo general maintenance.

Capital spending of $95.5 million continued to be concentrated on the Mobile Steelworks which remains scheduled for a first quarter 2001 startup. The precipitous fall of North American steel prices will have its impact on IPSCO for a full accounting period for the first time in the fourth quarter of 2000. Coupled with the price depression there may be weakness in distributor demand which could mean lower sales of steel mill products by IPSCO. Demand for steel mill products by most original equipment manufacturers does appear to be holding up. Oil country tubular goods shipments are expected to remain strong in the United States and finally reach levels in Canada more appropriate to the ongoing high natural gas and oil prices. Selling, research, and administration expenses are expected to fall as development work on high grade pipe steels will be basically completed. While IPSCO expects to remain profitable for the quarter, market volatility makes accurate forecasting impossible.

"Looking into 2001 a recovery in steel mill products pricing is expected with continuing strength for drilling related tubulars and some increase in demand for larger diameter line pipe. The timing of any price strengthening remains unclear, however, and will substantially depend on actions taken by the U.S. government and any independent trade actions that may be initiated by industry sources," Phillips concluded. 

This news release contains forward looking information with respect to IPSCO's operations and beliefs. Actual results may differ from these forward looking statements due to numerous factors, including estimated time of completion of equipment being installed at its facilities, cost of installation, changes to capital plans, potential markets for the materials produced, changes to funding sources, and use of funds for capital and other corporate uses. These and other factors are outlined in IPSCO's regulatory filings with the Securities and Exchange Commission, including those on IPSCO's Annual Report for 1999, its MD&A and Form 40-F.

Company Contact:
Bob Stefaniuk
Vice President of IPSCO Enterprises Inc.
Tel: 630-810-4787

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