IPSCO Remains Profitable

Please Note That IPSCO Results are Reported in U.S. Dollars

Lisle, Illinois, 21 October 2002 - IPSCO Inc. (NYSE/TSX:IPS), announced today that its third quarter net income attributable to common shareholders was $1.1 million or 2 cents per share compared to $1.2 million or 3 cents per share in the prior quarter. Net income was $3.9 million for the quarter. Despite successes in increasing its market position and enhancing its customer base, earnings were affected by low levels of activity in IPSCO's markets, in particular the oil and natural gas sector, scheduled and unscheduled outages that affected conversion costs and production levels, and increases in raw material costs. 

Sales for the quarter were $266.9 million, up $37.8 million or 16 percent over the same period last year on the strength of higher shipments of flat rolled products and some improvement in pricing. Sales were down seven percent from the previous quarter. Shipments of 697,800 tons were up six percent over the same period last year and down 14 percent from the previous quarter reflecting facility outages at all three steelworks. "On a positive note we were pleased that, in spite of the Montpelier Steelworks mechanical failure on the static shear and the production outages, IPSCO was able to minimize any disruption to customer deliveries. With three steelworks located throughout the North American heartland complemented by our five coil processing centers, IPSCO's geographical and operational flexibility has proven to be a real strength," stated David Sutherland, IPSCO's President and Chief Executive Officer. 

Year-to-date sales of $825.6 million were up $144.3 million or 21 percent on the strength of 2,258,000 tons shipped, an increase of 23 percent. Energy tubular product sales as well as sales of large diameter pipe were off significantly due to less than expected exploration and development and project work. The discrepancy between the dollar sales increase and the tons shipped increase reflects changes in product mix as well as the fact that composite selling prices were still below 2001 levels year-to-date. Through nine months net income was $7.4 million and the loss attributable to common shareholders was $1.1 million or 2 cents per diluted share.

The third quarter saw mixed results for IPSCO's product groupings. Steel mill products saw improved volumes and pricing, whereas tubular product volumes dropped markedly compared to the prior year. While steel products pricing was up compared to the prior year and quarter, IPSCO's product range did not see the much larger price increases evident in hot rolled coil pricing, while we did experience comparable scrap price increases.

Flat rolled product sales of $174.8 million were up 63 percent over the same quarter last year reflecting both improved pricing overall and higher production volumes from the Mobile Steelworks which had been in the commissioning process in 2001. Sales of tubular products were down 27 percent from last year and off five percent from last quarter. Drilling activity continued to be off significantly year over year, with an average rig count decrease of 30 percent in North America. 

"During the quarter management continued to concentrate on production and spending control. Unfortunately, production performance fell short of expectations because of the unscheduled outages. In addition, all three steelworks experienced higher scrap prices. However, spending for all capital, both working and investment has remained under tight control," said Sutherland. "Looking ahead, that portion of the steel industry serving the capital goods sector continues to await either an upturn in demand through positive economic growth or a restructuring of the supply environment before sustained improvement is seen in IPSCO's product markets. Within this overall market IPSCO expects to continue to secure and develop its market position." 

Sutherland concluded, "It does appear that expected momentum towards a recovery in industrial demand has not yet materialized and is not imminent as we approach the end of 2002. In light of that we think current analyst estimates, which are in the range of 21 to 38 cents per share, are too aggressive. IPSCO does anticipate a return to a more traditional relationship between oil and natural gas pricing and the level of field exploration and development which will translate quickly into increased demand for the Company's tubular products. While IPSCO has demonstrated the ability to maintain profitability in this very difficult environment, a more robust recovery in the demand/supply balance in steel markets will be necessary to break out of the current situation."

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 potential markets and demand for the materials produced, levels of potential imports, production levels, market forces, domestic pricing of steel products, trade laws, pricing of energy and raw material inputs, and outcome of trade and safeguard cases. These and other factors are outlined in IPSCO's regulatory filings with the Securities and Exchange Commission, including those in IPSCO's Annual Report for 2001, its MD&A and Form 40-F.

Company Contact: 
Bob Ratliff
Vice President and Chief Financial Officer
IPSCO Inc.
Tel. 630-810-4769
Release #02-29

Third Quarter 2002 Financial Statements
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