IPSCO Reports Continued Strong Earnings In Third Quarter

Results Are Reported In U.S. Dollars

Lisle, Illinois, October 29, 2004 - IPSCO Inc. (NYSE/TSX: IPS) today announced quarterly earnings attributable to common shareholders of $144.5 million, or $2.76 per diluted share for the quarter ending September 30, 2004. This is a new record for the Company. The quarter results include a $20.8 million, or $0.39 per diluted share, reduction of a tax valuation allowance. These results compare to a net loss of $0.04 per diluted share in the third quarter of 2003 and net earnings of $1.22 per diluted share in the second quarter of 2004.

Net income attributable to common shareholders was $242.2 million for the first nine months of 2004, or $4.49 per diluted share, including the previously mentioned tax valuation allowance adjustment. This compares to a net loss of $5.2 million, or $0.11 per diluted share, for the first nine months of 2003. 

Sales for the quarter set a new record at $641.9 million, up $306.9 million or 92% over the same period last year. Price, volume and mix all contributed to this growth. Year over year third quarter cost of production increased markedly due to the cost of scrap, which was up over 70%. The impact of increased scrap costs on gross margin this year, however, was effectively neutralized through a scrap surcharge. Steel mill product sales of $411.3 million were 121% higher than the third quarter of 2003 and tubular product sales of $230.6 million were 55% higher. Third quarter sales were up $93.6 million, or 17%, over the second quarter of 2004. Year to date sales totaled $1.7 billion, an increase of 83% over the first nine months of 2003. 

“IPSCO’s strong operating results are being driven by demand in North America for plate steel and for oil and gas tubular products. In recent quarters, demand for steel mill production has exceeded capacity. This appears to be an industry-wide reality. IPSCO has just finalized the allocation of its steel production for the fourth quarter and expects that its operating results in the fourth quarter will exceed those of the third. Additionally, IPSCO has recently increased plate prices and will shortly allocate its capacity for the first quarter of 2005,” said David Sutherland, the Company’s President and Chief Executive Officer. “Although it is difficult to project too far into the future, the significant increase in order backlog at many of our major original equipment manufacturer customers, coupled with strength in oil and gas, suggests that these robust market conditions will continue beyond the first quarter of 2005.”

Given the strong cash flow experienced by the Company in its current quarter and the near term positive outlook, IPSCO expects its cash position to exceed debt by the end of 2005. IPSCO is currently involved in a disciplined process to evaluate cash uses, including capital investment opportunities, debt retirement, share repurchase or dividend increases.  The recently announced decisions to increase the common share dividend and to redeem the subordinated debt are initial outcomes of this process. IPSCO has no plans to build new steel mills in North America given the current relative balance of supply and demand. However, the Company will continue to round out the capacity opportunities inherent in the existing mills and also to investigate value-added downstream opportunities and other means of increasing shareholder value including further dividend increases.

IPSCO has scheduled the live webcast of its third quarter 2004 results conference call at 10:00 AM EDT on Friday, October 29, 2004. During the call IPSCO President and CEO, David Sutherland and Senior Vice President and CFO, Vicki Avril will discuss IPSCO Inc.’s third quarter results. 

Persons wishing to listen to the webcast may access it in the Investor Information, Presentations section. The conference call, including the question and answer portion, will also be archived on IPSCO’s web site for three months. 

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, but not limited to, weather conditions affecting the oil patch; drilling rig availability; demand for oil and gas; supply, demand and price for scrap metal and other raw materials; supply, demand and price for electricity and natural gas; demand and prices for products produced by IPSCO; general economic conditions and changes in financial markets. These and other factors are outlined in IPSCO’s regulatory filings with the Canadian securities regulators and the Securities and Exchange Commission, including those in IPSCO’s Annual Report for 2003, its MD&A, particularly as discussed under the heading “Business Risks and Uncertainties,” its Annual Information Form, and its Form 40-F.

Company Contact:
Vicki Avril
Senior Vice President and Chief Financial Officer
Tel. 630-810-4769
Release 04-41

2004 Third Quarter Financial Statements
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