As improvements continue throughout the company IVACO expects outstanding year in 1995.

MONTREAL--(BUSINESS WIRE)--May 25, 1995--IVACO INC. (ME,TSE:IVA.A ) Paul Ivanier, President and Chief Executive Officer of Ivaco Inc. said at the annual shareholders' meeting today that 1995 will be an outstanding year for both sales and earnings for the Company.

"Our objective in the short term is to exceed the $89 million pre-tax profit achieved in 1987, which was the Company's second best year. With the continuation of the profit improvement program, I am very confident that this achievement will be met very soon," he said.

Mr. Ivanier also expects Ivaco to beat "sooner than later" its all-time record of $108.3 million achieved in 1988. Pre-tax profits in the first quarter of 1995 amounted to $23.2 million compared with $7.5 million a year earlier.

Since the first quarter of 1992, when the Company began an extensive cost-cutting and productivity improvement program, cumulative pre-tax profits have consistently improved, quarter by quarter, compared to prior years.

The total improvement for the 3 1/4 years since inception of the program up to the first quarter of 1995 was $142.3 million. Working capital generated from operations also improved substantially.

"Ivaco's manufacturing plants have substantial backlogs and its steel mills are well booked into the third quarter. As a result, we expect the second quarter of 1995 will continue to show a strong earnings performance," Mr. Ivanier told shareholders.

One explanation of this success is that Ivaco has a greatly diversified range of products which are used by a broad spectrum of users, thus eliminating Ivaco's dependence on any one specific industry group.

Matters of importance

During the annual meeting, Mr. Ivanier shared thoughts with shareholders concerning several matters of importance for the Company's future performance.

First, the Company's effective income tax rate, which has been extremely high in the past several years, should come down to more normal levels as U.S. losses are reduced.

Second, Ivaco has surplus properties strategically located in downtown Atlanta, and in Metropolitan Toronto which are beginning to attract interest on the part of prospective buyers. The sale of this real estate would enhance shareholder value substantially.

Third, the Company is actively pursuing several joint venture opportunities at the present time and some of them could come to fruition during the year. In some cases, they could generate a significant amount of cash which would be used to reduce debt which is a key strategic objective, and at the same time, would allow for synergistic combinations which would create a stronger more profitable entity.

Finally, Ivaco plans to increase capital spending to the upper side of $45 million. This program has two objectives: to increase production of more value-added products within existing lines and to produce rapid cost-cutting benefits. Continuous process

Mr. Ivanier stressed that the drive to reduce costs and increase efficiency and productivity is an on-going process at Ivaco. Its clearly stated objectives is for each unit to be the low-cost producer in its market.

In 1994, virtually every one of Ivaco's operating units generated improved results. Only Atlantic Steel and Canron's structural steel unit did not deliver earnings from their ongoing operations. However, both anticipate strongly improved results in 1995. Atlantic is expected to reach profitability during the second half and the structural steel unit was profitable in the first quarter.

Regarding 49.8 p.cent-owned Laclede Steel, the outlook for 1995 remains highly positive. Ivaco is still willing, in principle, to divest its interest in Laclede but this is not something that will be done until an appropriately substantial value can be realized.

Ivaco is a steel producer with annual steelmaking and rolling capacity of more than two million tons located at Ivaco Rolling Mills in Ontario, Atlantic Steel in Georgia and at Laclede Steel in Illinois. Its products include steel billets, hot-rolled bars and shapes, wire rod, wire, welded wire fabric, nails, fasteners, precision-machines components, forgings, wire ropes and cables. Ivaco also fabricates and erects structural steel. Through joint ventures, the Company is involved in the manufacturing of pipes and fittings, and tire cord and tire bead.

The Ivaco Group has 51 plants, 33 of which are in Canada and 18 in the United States, and employs approximately 7,600 people. With 1994 sales in excess of $1.4 billion, Ivaco ranks 91st in the Financial Post Top 500.

CONTACT: Paul Ivanier, [phone]