Dofasco Inc. reported consolidated net income of $59.2 million on consolidated sales of $1,061.0 million for the second quarter of 2005.

Second Quarter Results—The $59.2 million consolidated net income ($0.77 per common share) compares to $110.5 million ($1.45 per share after deducting preferred share dividends) reported in the second quarter of 2004. Results were driven by solid shipments and a continued high, although declining, North American pricing environment.

Consolidated sales of $1,061.0 million are virtually unchanged from the same period in 2004. Steel shipments, at 1,204,000 tons, were down from the 1,284,000 tons shipped in the second quarter of 2004 due mainly to weaker demand in the construction and distribution market segments.

Commenting on the quarter, Dofasco's President and CEO Don Pether said, "We are coming off a record year in 2004, which was followed by our best first quarter ever. The 2005 second quarter results, although lower than what we have recently experienced, are good by historical standards and we are pleased with the efforts of the people working at our operations in Canada, the United States and Mexico."

Segment Results—Dofasco's Steel Operations segment, which includes the company's Hamilton operations, reported income before income taxes of $67.3 million for the quarter, compared to $105.1 million for the second quarter of 2004. Shipments from Hamilton were 1,030,000 tons, a decrease from 1,096,000 tons shipped in the same quarter of 2004. Average revenue realized per ton of steel shipped from Hamilton increased
by $64 compared to the same period in 2004, reflecting the impact of higher prices on contract business. Average cost per ton increased by $103 over the levels experienced in 2004, driven primarily by lower production levels,
significantly higher prices for purchased slabs, iron ore and coal, as well as increased costs of other raw materials and energy.

Dofasco's 50% share of Gallatin Steel's income before taxes was $26.3 million, compared to $46.5 million in the same quarter for 2004. The decline was driven by lower shipments, a higher average cost per ton and the impact of a weaker U.S. dollar on the translation of Gallatin's results. Shipments were 347,000 tons, significantly lower than the 376,000 tons shipped in the second quarter of 2004.

Outlook—Looking forward, Dofasco expects its third quarter results (excluding Quebec Cartier Mining Co.) to be significantly lower than the second quarter, with results expected to be more favorable in the fourth quarter. At its Hamilton operations, Dofasco expects third quarter steel shipments to be similar to the second quarter. However, average revenue per net ton is expected to decrease significantly, while average cost per net ton is expected to remain at high levels albeit marginally lower than in the second quarter. At Gallatin, shipments are expected to increase moderately from the low second quarter levels. Don Pether commented, "Hot band spot prices are expected to bottom out in the third quarter, as recent indicators suggest that demand is beginning to recover."

The No. 2 Blast Furnace rebuild in Hamilton was successfully completed late in June and the furnace was operating near capacity early in July. The rebuilt blast furnace features several advancements over earlier designs that make it one of the safest and most efficient furnaces in North America. Following the startup of No. 2 Blast Furnace, the No. 3 Blast Furnace has been idled and removed from service.

On July 22, 2005, Dofasco successfully completed the acquisition of Quebec Cartier Mining Co. (QCM), a leading producer of iron ore products. Dofasco effected the acquisition by purchasing all of the preferred shares of QCM owned by CAEMI of Brazil and Investissement Quebec for total consideration of $306 million. Dofasco already owned one third of the preferred shares. Effective July 22, 2005, all of the preferred shares of QCM were converted into common shares, resulting in Dofasco holding approximately 98.7% of the outstanding common shares.

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.