Profitable Quarter For IPSCO Despite Falling Prices

Please Note That IPSCO Results are Reported in U.S. Dollars

Lisle, Illinois - 17 April 2001 - IPSCO Inc. (NYSE/TSE:IPS) announced today that its first quarter net income was $8.5 million, down 33 percent from the fourth quarter of 2000 and down 51 percent from the same quarter a year ago. Net income available to common shareholders was $5.7 million or 14 cents per share, down 63 percent from the same quarter last year." 

The first quarter for IPSCO was a good news, bad news story. The bad news was a drop in profits from the previous quarter and the same quarter a year ago as the result of lower selling prices as the import surges in the last half of 2000 made their full impact on domestic steel prices. The good news is that prices for hot rolled coil and plate appear to have bottomed and in fact some modest strengthening seems to be taking place as we start the second quarter," said Roger Phillips, the company's President and Chief Executive Officer.

Average unit selling prices fell 4.6 percent from the fourth quarter and 8.8 percent from the first quarter of 2000. In contrast costs were flat as compared to the previous quarter and decreased 3.5 percent from the year before.

Sales revenue at $232.5 million was down ten percent from the first quarter of last year.
Steel mill product shipments at 226,400 tons were seven percent lower than a year earlier. "Severe price depression on hot rolled coil caused lower volumes of this product to be offered for sale while discrete plate sales, suffering somewhat less price erosion were up substantially from the prior year," Phillips added.

Further fabricated products at 357,200 tons were three percent higher than in the first quarter of 2000.

Capital spending of $35.5 million during the quarter was predominantly dedicated to the Mobile Steelworks which is about to commence an expected six month startup and hot commissioning period.

IPSCO is anticipating that it will be one of the few hot rolled steel producers in North America that will report a profit for the first quarter of 2001. Looking further into the year Phillips notes that from a volume perspective the year 2001 is shaping up well. IPSCO discrete plate and hot rolled coil, cut-to-length plate and sheet from its coil processing facilities, and non-energy tubulars all more or less vary in demand with the overall economy but very little of this tonnage is directly impacted by automobile production which appears to be the industrial sector which has been affected most adversely. Despite talk of a recession IPSCO's order book remains strong, but prices for steel, depressed by an overhang of dumped steel inventories, remain weak. Some very modest improvements will impact slightly on the second quarter but there has been no sign of a material upswing. If inventory on hand at distributors is any indication, further demand will result in the last half seeing further upward price moves. "Demand for energy tubulars will weaken in the second quarter in Canada because of seasonal factors and is then expected to rebound strongly for the balance of the year. Prices for these items should remain steady," Phillips added.
"Because of the seasonal drop in energy products, resulting in a lower percentage of value-added products, the second quarter will be weaker in terms of profits than the first, albeit the company is expected to remain in the black," Phillips reminded shareholders. While profitability should undoubtedly improve in the last half as oil country tubular sales rebound and a modest improvement in large diameter pipe sales occurs, uncertainties as to the direction of the overall economy and potential government actions with respect to imports make numerical predictions difficult this early in the year.

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 estimated time of startup of the Mobile Steelworks, dramatic pricing developments or overall economic fluctuations, government actions, and potential markets for the materials produced. These and other factors are outlined in IPSCO’s regulatory filings with the Securities and Exchange Commission, including those on IPSCO’s Annual Report for 2000, its MD&A and Form 40-F.

For Further Information Please Contact:
IPSCO Inc.
Bob Ratliff
Vice President and Chief Financial Officer
Tel. 630-810-4769
Release 01-17

First Quarter 2001 Financial Statements
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