IPSCO Reports Continued Strong Earnings In First Quarter 2005

Results Are Reported In U.S. Dollars

Lisle, Illinois, April 26, 2005 - IPSCO Inc. (NYSE/TSX: IPS) announced today first quarter sales of $746 million, an increase of $263 million over the first quarter of 2004. Net income was $154 million in the first quarter compared to $31 million in last year’s corresponding quarter. Basic and diluted earnings per share in the first quarter of 2005 were $3.10 and $3.05, respectively, compared to $0.65 and $0.57 per share in the first quarter of 2004. Operating income per ton shipped for the quarter was $288, compared to $69 per ton in the first quarter of 2004. In comparison to IPSCO’s record fourth quarter, sales decreased 4%, while net income declined by $34.4 million, largely due to the increase in the effective tax rate from 28% to 36%.

IPSCO’s first quarter revenue reflected significantly higher year-over-year prices in all product lines, partially offset by lower volumes of tubular product shipments. First quarter shipments amounted to 855,800 tons or 9% less than last year’s corresponding quarter. First quarter shipments of discrete plate, cut plate and hot rolled coil, steel mill products, were 618,100 tons, slightly higher than the first quarter of 2004, while tubular shipments were 237,700 tons in the quarter, a decline of 95,200 tons from the corresponding quarter of 2004. In spite of strong demand, unusual and difficult weather conditions in Western Canada during the first quarter impeded drilling activity resulting in a decline in the shipments of energy tubular products. The non-energy tubular market continued to remain weak. No significant large diameter pipe project shipments occurred in the first quarter of 2005 as had benefited each quarter in 2004. 

IPSCO’s first quarter pricing continued to increase on a majority of its products compared to the prior quarter, but due to a product mix shift and declining scrap surcharges overall pricing remained essentially flat.

"We are benefiting from being well-positioned in great market niches for this phase of the economic cycle. The plate market has distinguished itself as being robust as capital spending remains strong and tubular sales are benefiting from strong energy markets," said David Sutherland, President and Chief Executive Officer. "We continue to make significant reductions in our debt levels, while also making progress in our previously announced share buyback program, value added growth investments and increasing dividends. We remain committed to looking for opportunities to create and deliver additional shareholder value."

In February, the Company increased its quarterly cash dividend on common shares from CDN $0.10 to $0.12 per share after doubling the dividend rate the prior October. Also, the Company announced a share repurchase program, by way of a normal course issuer bid, of up to 10% of the public float of its outstanding Common Shares. Authority was granted by the TSX with 8 trading days left in the quarter and the Company purchased 294,000 shares for $16.3 million. The Company also announced the redemption of $57 million principal amount of its 7.32% Series B Senior Notes due April 1, 2009. These notes, along with open market purchases of $15 million principal amount of the Company’s 8.75% Senior Notes due June 1, 2013, will be retired in the second quarter of 2005. 

Outlook

IPSCO’s key product groups of plate and energy tubular products, with the exception of large diameter pipe, continue to exhibit strong demand and pricing levels. The demand and supply conditions in the plate market have reached a more orderly level where buyers are able to obtain what they require from a variety of sources. The April price increase in plate products has been fully implemented. In addition, the scrap surcharge will increase $27 per ton in May, in accordance with our formula. In the case of tubular products, the second quarter is traditionally IPSCO’s seasonally weakest quarter as the weather related spring break up occurs in Canada affecting energy tubular sales. 

The Company expects second quarter earnings to meet or exceed $2.75 per diluted share, a more than two-fold increase from the second quarter of 2004, primarily due to higher pricing levels. Compared to the first quarter of 2005, a less favorable product mix is anticipated, combined with some modest pressure on margins. Also the second quarter of 2005 will include $6.5 million in costs related to early extinguishment of debt.

IPSCO has scheduled the live webcast of its first quarter 2005 results conference call at 10:00 AM EDT on Tuesday, April 26, 2005. During the call IPSCO President and CEO, David Sutherland and Senior Vice President and CFO, Vicki Avril will discuss IPSCO Inc.’s first quarter results. 

Persons wishing to listen to the webcast may access it in the Investor Information, Presentations section. The conference call, including the question and answer portion, will also be archived on IPSCO’s web site for three months. 

IPSCO, traded as "IPS" on both the New York Stock Exchange and Toronto Stock Exchange, operates steel mills at three locations and pipe mills at six locations in the United States and Canada. As a low cost North American steel producer, IPSCO has a combined annual steel making capacity of 3,500,000 tons. The Company's tubular facilities produce a wide range of tubular products including line pipe, oil and gas well casing and tubing, standard pipe and hollow structurals. Steel can also be further processed at IPSCO's five temper leveling and coil processing facilities. 

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, but not limited to, weather conditions affecting the oil patch, drilling rig availability, demand for oil and gas, supply, demand and price for scrap metal and other raw materials, supply, demand and price for electricity and natural gas, demand and prices for products produced by the Company, general economic conditions and changes in financial markets. These and other factors are outlined in IPSCO's regulatory filings with the Securities and Exchange Commission and Canadian securities regulators, including those in IPSCO's Annual Report for 2004, its MD&A, particularly as discussed under the heading "Business Risks and Uncertainties", and its Form 40-F.

Company Contact:
Vicki Avril
Senior Vice President and Chief Financial Officer
Tel. 630-810-4769
Release 05-18

2005 First Quarter Financial Statements
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Tons Shipped by Quarter
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Sales Information By Product Group
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