Bermuda Bakery Limited Six Month Unaudited Financial Results For Period January 1st to June 30th

After a comprehensive review of the bread products market, and the unsatisfactory earnings and losses in the Bakery Operations over many years, the Company's Directors are moving forward with a restructuring plan that includes the discontinuation of the baking of breads and rolls. The bread baking operation will cease. Arrangements have been finalized to secure the supply of these products from alternate sources.

With over 80 years of baking the highest quality products, The Bermuda Bakery is committed to ensuring the continuity of the supply of the key brands and products that Bermudians have come to know and trust.

The suspension of baking bread and rolls is part of a planned restructuring of the Bakery Operations and is designed to protect shareholder interests while balancing commitment to employees, customers and other stakeholders. However, it will regretfully result in the redundancy of one-third of current operations employees. Unfortunately shrinking markets and escalating costs and expenses have contributed to the present situation. The Bakery will retain two-thirds of its workforce and will continue to distribute breads and to bake cake and snack products from its present location. We are proud of our workforce and the contribution that generations of Bermudians have made to the company over the years.

The overall restructuring plan will ensure the remaining cake and snack production positions, and the sales department, which comprises the Island's most extensive bread products distribution network. These changes will result in improved revenues and will better position the Bakery Operations to meet customer needs in a changing market. It will also provide the flexibility needed to evaluate the long term requirements of the Bakery Operations, and the opportunities for the future utilization of the Pitts Bay Road property.

The Belvedere Building, and other holdings and investments of the real estate division, continue to perform well as a result of the significant improvement in the control of costs and the capital investments made in 2002 to improve energy efficiency.

Construction and installation of the new, highest efficiency air conditioning and air quality system is proceeding on schedule and is expected to be completed by the end of summer. This $750,000 project is the final phase in a planned upgrade to the Belvedere Building to ensure the most modern of facilities and environment for our tenants.

Total Revenue of $2.85 million is $139,364 (4.7%) less than the first six months of 2002 due to the reduced sales of bread and roll products during this period.

Earnings were $0.53 Per Share for the first half of 2003, a decline of $0.71 (57.3%) compared to $1.24 Per Share in the first six months of 2002.

The Company paid $0.25 Per Share Dividend in the first quarter of the year. In order to conserve cash reserves and to facilitate the new restructuring plan, the Board of Directors has decided that no dividend will be paid for the second quarter.

In 2003 Total Revenue was $2,854,430 versus $2,993,794 in 2002. Net Income was $153,418 vs $353,886 and Earnings Per Share was $0.53 vs $1.24.

Signed by:

Vice Chairman of the Board

David A.J. White