Dofasco Inc. reported net income of $96.8 million on consolidated sales of $1.11 billion for the fourth quarter and net income of $376.9 million on consolidated sales of $4.22 billion for 2004. Dofasco attributes its record earnings to excellent operating performance and robust North American flat rolled steel demand.

Fourth Quarter Results—Net income of $96.8 million ($1.26 per common share) compares to a restated consolidated net income of $2.4 million ($0.03 per share) in the same quarter in 2003. Excluding QCM's capital restructuring and operating results, pro forma net income in the fourth quarter of 2003 was $26.6 million ($0.35 per share).

Consolidated net income was $96.8 million ($1.26 per common share). In the fourth quarter of 2003, restated consolidated net income was $2.4 million or $0.03 per share after deducting preferred share dividends.

Consolidated gross income was $219.7 million, a 64% increase over gross income of $133.8 million for the same quarter of 2003, which included $8.8 million from QCM. This increase was driven by significantly improved results at both Steel Operations and Gallatin Steel.

Full Year Results—Net income of $376.9 million ($4.92 per share after deducting preferred share dividends), compares to $117.7 million ($1.55 per share) restated net income in 2003. These results are well above the previous record for annual net income of $260.8 million reported in 1999. The 2003 results, which included the results from Quebec Cartier Mining (QCM), have been restated to include the impact of a change in accounting policy for asset retirement obligations at the company's Wabush Mines joint venture. Excluding the impact of QCM's capital restructuring and results of operations, pro-forma net income for 2003 was $133.2 million ($1.76 per common share). On December 31, 2003, Dofasco disposed of its common shares in QCM and accounts for its remaining preferred share investment on a cost basis.

Consolidated sales of $4.22 billion compare to $3.55 billion in 2003. Steel shipments, at 5 million tons, were an increase from the previous record of 4.83 million tons set in 2003. Consolidated net income set a new record at $376.9 million ($4.92 per share), exceeding last year's net income of $117.7 million ($1.55 per share). These results are well above the previous record for annual net income of $260.8 million reported in 1999. The 2003 results, which included the results from Quebec Cartier Mining (QCM), have been restated to include the impact of a change in accounting policy for asset retirement obligations. Consolidated gross income was $836.2 million, an increase of $277.6 million over last year, which included $28.5 million from QCM.

In 2004, Dofasco set new records in key operating areas including health and safety, production, shipments, customer service and quality.

Comments—Dofasco's President and CEO Don Pether said, "Dofasco people continue to implement our strategy with excellence, and continue to deliver value to our customers and shareholders. While we enjoyed record pricing levels in 2004, we also successfully managed significant challenges on the cost side and seamlessly executed major capital projects in our manufacturing facilities."

Dofasco continued to implement its five-year, $700 million Finishing Division Improvement Program in Hamilton, which will enable the company to further increase value-added throughput, improve quality and reduce costs.

Segment Results—Dofasco's Steel Operations segment, which includes the company's Hamilton operations, reported income before income taxes of $394.7 million for the year, compared to $180.6 million for 2003, reflecting stronger pricing and record shipments. Shipments from Hamilton were 4.24 million tons compared to 4.09 million tons in 2003. Average realized revenue per ton increased by $100 during the year due to the strength of the North American steel market, a slightly higher value product mix and the implementation of the raw materials surcharge, partially offset by the significant strengthening of the Canadian dollar. Average cost per ton increased by $69 over the high levels experienced in 2003, driven primarily by record high scrap prices and increased costs of other raw materials.

Gallatin Steel posted record income before taxes, record production and record shipments for the year 2004 as a result of record high U.S. spot market selling prices and continued excellent operating and market performance. Dofasco's 50% share of Gallatin Steel's income before taxes for the year increased to $171.0 million from $2.9 million in 2003.

Dofasco has concluded that it will not pursue the construction of a galvanizing line in the southern United States. After conducting a comprehensive evaluation of a range of alternatives for this project, the company has concluded that the investment does not, at this time, meet its investment criteria. Dofasco remains committed to growing in its target markets and will continue to explore investment opportunities that create value for shareholders.

"In 2004, Dofasco was again listed on the Dow Jones Sustainability World Index — for the sixth year in a row," said Pether. "Additionally, for the third consecutive year, we were chosen as one of Canada's top 100 employers by MediaCorp Canada and Maclean's magazine, and were named one of Canada's 50 best employers by Report on Business Magazine and Hewitt Associates. This reflects the fact that Dofasco's workforce is highly engaged, which is integral to the company's ongoing success."

"Looking forward, Dofasco remains well positioned for continued success in 2005. We expect North American flat rolled steel demand to continue to grow, although at a slower rate than what we have seen over the past year. Input cost pressures are expected to continue throughout 2005 as the strength of the global steel market continues to drive raw material prices higher," said Pether.

"The continuing efforts of everyone at Dofasco contributed to our record setting financial and operating performance in 2004," said Pether. "As a result, we approach the future with confidence and the ability to reinvest in our business. Our focus remains on safety, quality, customer service, cost reduction and growing in our strategic market segments."

Dofasco is a leading North American steel solutions provider. Product lines include hot rolled, cold rolled, galvanized, Extragal^(TM), Galvalume^(TM) and tinplate flat rolled steels, as well as tubular products, laser welded blanks and Zyplex^(TM), a proprietary laminate. Dofasco's wide range of steel products is sold to customers in the automotive, construction, energy, manufacturing, pipe and tube, appliance, packaging and steel distribution industries.