Ipsco Inc. announced record quarterly earnings attributable to common shareholders of $66.4 million on record sales of $548.3 million for the quarter ending June 30, 2004.

Second Quarter Results—Earnings attributable to common shareholders of $66.4 million ($1.22 per diluted share) compares to a net loss of $0.14 per diluted share in the second quarter of 2003 and net earnings of $0.57 per diluted share the first quarter of 2004. Ipsco's trailing 12-month return on capital has now reached 13%, the median reported by Standard & Poor's for BBB-rated industrial companies for the years 2000 - 2002.

Sales set a new record at $548.3 million, up $250.1 million or 84% over the same period last year. Price, volume and mix all contributed to this growth. Sales were up $65.4 million, or 14%, over the prior quarter. Overall higher prices and improved mix help to offset the seasonal decline in volume in the tubular market.

As of the beginning of the second quarter of 2004, the company implemented a change in accounting regarding maintenance reserves which the company believes more appropriately recognizes such costs in the period incurred. The impact of the change on the second quarter of 2004 was negligible. Results of prior comparative periods have been adjusted to retroactively reflect the accounting change.

During the quarter, Ipsco redeemed the company's outstanding preferred shares. As a result of the redemption, diluted earnings per share increased by $0.06 for the second quarter and $0.03 for the six months ended June 30, 2004.

Throughout the quarter, product demand on Ipsco's steel manufacturing facilities continued to exceed available capacity. Energy tubular shipments in the second quarter, a lower demand period, were higher than recent historical levels. Drilling activity in Western Canada increased sharply late in the quarter and U.S. demand for tubular products remained strong. Year over year second quarter cost of production increased, most markedly scrap which was up over 65%. This increase in scrap cost has been addressed through introduction of a raw material surcharge effective January 1, 2004. Overall, results were driven by strong global market conditions combined with good operational performance.

Six Month Results—Net income attributable to common shareholders of $97.7 million ($1.78 per diluted share) compares to a net loss of $3.5 million ($0.07 per diluted share) for the first six months of 2003.

Year-to-date sales totaled $1.0 billion, an increase of 78% over the first six months of 2003. Steel mill product sales of $349.6 million were 89% higher than the second quarter of 2003. Tubular product sales of $198.7 million were 75% higher than last year.

"With our modern facilities and cost efficient operations, Ipsco was well positioned to capitalize on business when economic conditions improved in the industrial sectors. Ipsco has reported record earnings for two consecutive quarters primarily due to the favorable market conditions. However, we are also reporting operating margins per ton that are among best in class," said David Sutherland, the company's President and CEO.

"During this period of rapidly changing market dynamics, we are working hard to address the interests of our customers and stakeholders. We are committed to positioning the company to be a long-term sustainable supplier to the steel markets we serve," concluded Sutherland.

Outlook—Demand for Ipsco's products remains strong in this environment with the third quarter fully committed. Given scrap prices have again increased at the start of the third quarter, the raw material surcharge has been adjusted accordingly. The seasonal pick-up in tubular products is expected to continue in the third quarter, further contributing to another anticipated record quarter. Ipsco expects earnings in the third quarter to exceed second quarter earnings.

Ipsco is an electric furnace flat rolled steel producer and a leader in the development of high strength steel and pipe. Headquartered in Lisle, Ill., it operates facilities in the U.S. and Canada with the capacity to make 3,500,000 tons of steel annually.