IPSCO Reports Second Quarter Results

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

Lisle, Illinois, July 23, 2003 - IPSCO Inc. (NYSE/TSX:IPS), announced today its net loss for the second quarter of 2003 was $3.5 million and the net loss attributable to common shareholders was 14 cents per diluted share. This compares to net income attributable to common shareholders of 3 cents per diluted share in both the second quarter of 2002 and the first quarter of 2003. Higher raw material and energy costs hurt results as expected, and combined with a higher effective tax rate, resulted in a quarterly loss that exceeded expectations. 

Net income was $0.9 million for the first six months of 2003, and the net loss attributable to common shareholders was 10 cents per diluted share. This compares to net income of $3.5 million through the first six months of 2002, and a net loss attributable to common shareholders of 5 cents per diluted share.

Sales for the quarter were a record $298.2 million, up $10.6 million or 4% over the same period last year. Higher prices and improved mix helped to offset the 8% drop in volume. Sales were up $18.4 million or 7% over the prior quarter and tons shipped increased 11%. Year to date sales totaled $578.1 million, an increase of 3% over the first six months of 2002. 

Although steel mill product sales of $184.9 million were up 18% over the first quarter of 2003, they were down 6% from the same quarter last year reflecting a cautious distribution sector in the face of continuing weak industrial markets and a difficult pricing environment. Tubular product sales, however, were up 23% from the same quarter last year principally reflecting the stronger North American energy market.

"Activity in the Western Canadian energy sector was down slightly more than expected through much of the second quarter because of a prolonged spring breakup, but this sector has rebounded nicely and we anticipate that it will continue to strengthen as the year progresses. We are very pleased with this business, which remains on track for record sales this year," said David Sutherland, the Company's President and Chief Executive Officer. "However we continue to face very difficult business conditions in our industrial markets where cost increases for scrap and energy have exceeded price increases. IPSCO's major target markets in the North American steel business continue to suffer low product demand which has slowed potential pricing recovery resulting in very poor margins." 

"Momentum towards a recovery in industrial demand has shown few signs of materializing and is questionable as we enter the last half of 2003. That circumstance will result in continued weak margins in the third quarter, offset to some extent by improving energy tubular results. Therefore we anticipate only minor improvement over the second quarter pretax loss." 

"We are actively working on many fronts to offset poor market conditions and improve operating results. However a sustained recovery will require improved product demand associated with a stronger economic recovery. With our modern facilities and cost efficient operations, combined with aggressive cost reducing programs, we continue to be well positioned to capitalize on business when economic conditions improve in the industrial sectors," Sutherland concluded. 

This news release contains forward-looking information with respect to IPSCO's operations. Actual results may differ from these forward looking statements due to numerous factors, including potential markets and demand for the materials produced, levels of potential imports, production levels, market forces, North American pricing of steel products, trade laws, pricing of energy and raw material inputs, outcome of trade and safeguard cases and other matters. These and other factors are outlined in IPSCO's regulatory filings with the Securities and Exchange Commission, including those in IPSCO's Annual Report for 2002 and Form 40-F.

Company Contact:
Bob Ratliff
Vice President and Chief Financial Officer
IPSCO 
Tel. 630-810-4769
Release 03-20

Second Quarter 2003 Financial Statements
Excel HTML version - Internet Explorer only

PDF version - Internet Explorer or Netscape or printing
20 Kb  Est. download time = 0 sec @ DSL/Cable,  1 sec @ 56K Dial-up
You will need the free Acrobat Reader

Back to News