Dofasco outperforms second-quarter expectations

Dofasco Inc. announced tonight that its second quarter earnings will be considerably better than the $.43 to $.51 per common share originally expected.

The company now expects something in the range of $.89 a share when it reports quarterly earnings on July 24.

Algoma Steel's earnings announcement is slated for July 31.

Dofasco and Algoma are Canada's second- and third-largest steelmakers, respectively.

Here's the full text of Dofasco's announcement: ************************************************************************* Dofasco Second Quarter Earnings Will Exceed Earlier Guidance

HAMILTON, ON, July 15 /CNW/ - Dofasco Inc. announced today that it expects its consolidated second quarter earnings to be approximately $.89 per common share. This is significantly higher than the range of $.43 to $.51 per share reported by First Call, based on guidance provided by Dofasco during the company's April 24, 2002 first quarter earnings conference call.

"Record hot mill production, reflecting the results of our extremely successful hot mill improvement program, and the focused effort of our employees to meet the needs of our customers contributed to Dofasco's Hamilton operations shipping a record 1,114,000 tons in the second quarter," said John Mayberry, Dofasco Chair and Chief Executive Officer.

"Our record shipments, based on strong demand for Dofasco's products in all market segments, and continuing strong operating and cost performance are the major drivers of the variance between our actual consolidated results and our previous earnings expectations for the quarter".

Additionally, financial performance at Gallatin Steel, Dofasco's joint venture steelmaking operation in Kentucky, will exceed expectations, based upon prices for Gallatin's products which have recovered more quickly than anticipated during the quarter, and upon sustained excellent cost and operating performance.

As expected, losses at Quebec Cartier Mining Company (QCM), Dofasco's joint venture iron ore mine in Quebec, will be lower than those recorded in the previous quarter because of seasonally improved shipping levels and cost savings introduced in response to difficult iron ore market conditions.

Although Dofasco and Caemi, Dofasco's joint venture partner in QCM, have been pursuing the sale of QCM, this process has not been successful to date.

As a result, the partners and QCM are exploring other operating strategies for QCM.

The impact, if any, that these alternatives would have on the carrying value of Dofasco's investment in QCM is not determinable at this time. As at June 30, 2002, the carrying value of Dofasco's investment in QCM is $151 million and Dofasco also has letters of credit outstanding in support of QCM's credit facility and equipment leases of $32 million.

Mr. Mayberry continued, "Dofasco's strong overall performance this quarter reflects the success of consistent strategies of disciplined growth and prudent financial management, as well as the excellence with which our people - our greatest competitive advantage - have developed and implemented these strategies."

Specific details behind Dofasco's strong second quarter earnings will be provided during the company's quarterly conference call with the investment community, which will be broadcast at 1:00 p.m. on July 24th, 2002 from the investors section of Dofasco's website at www.dofasco.ca.

No further comment on the company's earnings will be made until the release of the second quarter earnings.

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 and laser-welded blanks.

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.

This News Release contains forward-looking information with respect to Dofasco's operations and future financial results. Actual results may differ from expected results for a variety of reasons including the factors discussed in the Management's Discussion and Analysis section of Dofasco's 2001 Annual Report and the quarterly Report to Shareholders for the period ended March 31, 2002.

**************************************************************************** Your opinion is sought

Will Algoma Steel's second-quarter results be better or worse than the restructured company's initial, two-month quarter? Can they possibly match Dofasco's performance? Your opinions are welcome in the News Response section on our Editorial page.