Dofasco Inc. reported record consolidated net income of $115.0 million on record consolidated sales of $1,089 million for the third quarter of 2004. Dofasco attributes the results to higher pricing, strong operating performance and robust demand in the quarter.

Third Quarter Results—Consolidated net income of $115.0 million ($1.50 per share after deducting preferred share dividends) compares to restated consolidated net income of $29.7 million ($0.39 per share) earned in the same quarter last year. Excluding Quebec Cartier Mining (QCM) results, pro forma net income was $21.4 million ($0.28 per share) in the third quarter of 2003. Dofasco disposed of its common shares in QCM on December 31, 2003, and accounts for its remaining preferred share investment on a cost basis.

Consolidated sales of $1,089 million compare to $858 million in the same period last year. Steel shipments of 1.19 million tons were slightly more than the 1.17 million tons for the same quarter in 2003.

Nine Month Results—Consolidated net income was $280.1 million, surpassing the previous record for full-year earnings of $260.8 million reported in 1999.

"Thanks to the efforts of employees throughout our company, Dofasco continues to capitalize on strong market conditions and create value for our customers and shareholders," said Don Pether, President and CEO of Dofasco Inc. "We posted a record quarter and have already achieved a record year."

Segment Results—Dofasco's Steel Operations segment, which includes the company's Hamilton operations, reported income before income taxes of $109.4 million compared to $39.3 million in the same quarter last year, reflecting strong pricing and robust steel demand. Shipments from Hamilton were 1.0 million tons, virtually the same as the third quarter of 2003. Average realized revenue per ton increased by $164 relative to the third quarter of 2003, due to the continued strengthening of the North American steel market, driving prices to record highs.

The third quarter of 2004 was also favorably impacted by slightly higher value product mix. The average cost per ton increased by $97 over the same quarter of 2003, due primarily to unprecedented high scrap costs, as well as the high cost of other raw materials and energy.

Gallatin Steel posted record results for the second consecutive quarter, a result of record selling prices and continued excellent operating performance. Dofasco's 50% share of Gallatin Steel's pre-tax income for the quarter increased to $69.1 million from a loss of $1.5 million in the third quarter of 2003.

Gallatin Steel's third quarter shipments were 382,000 tons, compared to the 345,000 tons shipped in the same period last year. Continued escalation in hot band spot market selling prices from very low 2003 levels resulted in an increase of US$428 (150%) over Gallatin's average realized revenue per ton from the third quarter last year. Average cost per ton increased $145 (more than 50%) over the same period last year as a result of record high scrap prices.

Other News—During the quarter, the company was named to the Dow Jones Sustainability World Index (DJSI World) for 2005. Dofasco has been listed on the DJSI World six years in a row, is the only steelmaker in the world listed on the index, and is one of 13 Canadian companies listed. The sustainability ranking is based on environmental, social and economic performance, and includes more than 50 general and industry-specific criteria. "Dofasco is proud to have been listed in this global index since its inception six years ago," said Pether. "We believe our inclusion on the index is validation of our focus on sustainability and our commitment to the triple bottom line of environmental responsibility, social well-being and financial performance."

In October, Dofasco became the first steel company to be certified to the steel for construction products standard of Environment Canada's Environmental Choice^(M) Program. As a result, Dofasco is the first steel company to earn the right to use the EcoLogo^(M) symbol. "The EcoLogo symbol represents certification to a demanding environmental standard," said Pether. "We are pleased Dofasco can now provide added value to our customers with the assurance our steel construction products meet this highly regarded third party certification."

Outlook—"As a result of continued excellent operating performance and robust demand, we anticipate strong results in the fourth quarter, although not at the record third quarter levels," said Pether. "In Hamilton, we continue to renew our contract business in a sustained and strong market, which positions us well for longer-term performance. While we anticipate some easing in spot market prices, we are confident they will remain at high levels. At Gallatin, we anticipate continued solid performance in this market environment."

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.