Bermuda Bakery Issues Chairman's Report

Hamilton, Bermuda: 9th May 2005 - Bermuda Bakery Ltd. today released to the Bermuda Stock Exchange (BSX) the following Chairman's Report:

"Consolidated results for the Bermuda Bakery Limited and its subsidiary for the year 2004 show a net income of $1,028,641 compared to previous year's loss of $1,547,607, an increase of $2,576,248 or 166%.  Before the costs associated with the closure of the Bakery Division, the consolidated results for the year 2004 show an operating net income of $135,114 compared to the previous year's loss of $261,708, an increase of $396,819 or 152%. 

The net income of $1,028,641 reflects the net effect of redundancy pay of $570,786, gain on sale of assets of $217,660, write-off of redundant assets and inventories of $211,014, a one-time gain of the sale of the Bank of Bermuda shares of $1,089,904, and the special dividend of $225,282 received from the Bank of Bermuda.

The Bakery Division restructuring that began in September 2003, which included the closure of the Bakery Division and the sale of some of its assets in early June 2004, has now been completed.  The Bakery property will be rented on short-term leases while the Company is evaluating its options for the future utilization and development of the Pitts Bay Road property, which is the largest undeveloped commercial property west of Hamilton.

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 to improve energy efficiency over the past two years.

Total Revenue of $2.90 million is $2.25 million (44%) less than 2003 due to the closure of the Bakery Division in the beginning of June this year.

Earnings were $3.57 per share for the year 2004, an increase of $8.97 or 166% compared to a

loss of $5.40 per share in 2003.  Dividends paid last year amounted to $144,216 or $0.50 per share. Trading in Bermuda Bakery shares on the Bermuda Stock exchange was modest and in the range of $33.00 to $45.00

I wish to thank the Directors, management and staff for their dedication and support throughout the challenging past year."

Signed by:

David A.J. White

Chairman of the Board

2004                            2003

Total Revenue                          $2,898,286                  $5,154,748

Net Income                              $1,028,641                 -$1,547,607

Earnings Per Share                   $3.57                          -$5.40