Bermuda Press Holdings Release Interim Six-Month Report

In his report to Shareholders, Company President Roger Davidson states, "Shareholders will note that net income for the six months to 31st March 2004 was $2,000,172 which compares with $737,935 for the same period the previous year, with all divisions of the Company showing encouraging improvements in results. Net income this year includes $491,272 relating to a gain on the sale of our investment in The Bank of Bermuda Limited and the special dividend paid upon its acquisition by HSBC Holdings plc.

The Company has made significant efforts to control expenses while improving sales. Staff shortages, caused in part by the tight local labour market, in some areas of the Company have contributed to short-term savings, but will result in unsatisfactory long-term consequences if continued. Correcting this matter and absorbing rapidly rising local inflation will affect the balance of our fiscal year if we do not maintain corresponding increases in revenue.

Inflation in Bermuda is increasing at a faster rate than is being experienced by our major trading partners. This is caused primarily by increases in the cost of health insurance, oil prices, electricity and by wage inflation due to continued shortages in key employment sectors. In previous years local inflation and increasing hotel rates resulted in the closure of some local hotels. We may now face serious challenges in the Island's international business sector if inflation and rising local costs continue to advance at a higher rate than our trading partners, along with American election pressure to discourage offshore business.

For the next six months, we anticipate profits to be lower than for the first six months as local inflation takes effect. Careful consideration will be given to each of our highly competitive markets as to whether prices can be adjusted to maintain our margins of operation without losing market share.

As mentioned in my report on the last fiscal year, the adverse effects from Hurricane Fabian may be softened by an improvement in tourism resulting from the stronger

American economy, the declining value of the dollar against other currencies and by spending on repairs to the Island's infrastructure. The Island has weathered the ordeal reasonably well. Projections for tourism in the next few months are positive while the international sector's performance remains strong which bodes well for our markets.

The total interests of all directors and officers of the Company in the shares of the Company at 31st March 2004 amounted to 96,315 shares. No rights to subscribe for shares in the Company have been granted to or exercised by any director or officer.

Your Company has invested in technology each year and part of our success is attributable to having sufficient capacity to take advantage of sales opportunities without related increases in cost. Equipped with the advantages of modern technology, our staff provides determination and dedication to serve our customers and readers and I thank them for their efforts. The continued support of our shareholder is very much appreciated and encouraged."

Report highlights show Revenue at $15,551,274 up from $14,273,579 for the same period last year, Net Income from Operations rose from $772,119 to $1,603,398. Minority Interest up from $34,184 to $94,498. Net Income for the period was also up from $737,935 to $2,000,172 while earnings per share rose from 53 cents to $1.45. A 32-cent per share dividend totaling $441,678 was paid for the period, the same as in the previous year.