Maple Leaf Foods Reports SECOND Quarter Results



    Commodity Prices Pressure Earnings; Improvements Expected in 2nd Half '08

    TORONTO, July 24 /CNW/ - Maple Leaf Foods Inc. (TSX: MFI) today reported
its financial results for the second quarter ended June 30, 2008.

    
    -   Adjusted earnings (loss) per share of ($0.01) compared to $0.13 last
        year, as higher grain and fuel costs outpaced price increases
    -   Restructuring of protein operations on track
    -   Brandon plant expansion ahead of plan
    -   Benefits from restructuring, stabilization of commodity markets and
        pricing expected to improve earnings in the second half of 2008

    Note:  Adjusted earnings per share measures are defined as earnings per
    share from continuing operations before restructuring and other related
    costs and certain non-recurring tax adjustments.
    

    "We fully expected the first half of 2008 to be very difficult for Maple
Leaf due to the extreme inflation and volatility in commodity markets." said
Michael H. McCain, President and CEO. "We are focused on persevering through
these unprecedented market conditions, maintaining our focus on executing the
structural changes we have committed to and passing on price increases to
offset the effects of commodity inflation. While the first half has been
pressured, we believe the second half of 2008 will show a substantial recovery
as markets stabilize and the early benefits of restructuring are realized."

    Financial Overview
    ------------------

    Earnings from continuing operations before restructuring and other
related costs ("Adjusted Operating Earnings") decreased by 64.1% to
$18.9 million for the quarter. High wheat and fuel costs compressed margins in
the Bakery Products Group as price increases implemented earlier in the year
were not sufficient to cover high input costs. Hog production operations
continued to be affected by lower hog prices and higher feed costs. In the
protein business, declining poultry processor margins and a higher Canadian
dollar were only partly offset by improved pork processor margins. Also
included in earnings for the quarter were costs of $3.1 million (2007:
$0.4 million) related to consulting and systems conversion initiatives.
    Earnings per share from continuing operations before restructuring and
other related costs and certain non-recurring tax adjustments ("Adjusted EPS")
for the quarter were a loss of $0.01, compared to earnings of $0.13 last year.
Year-to-date earnings per share, on a comparable basis, were $0.03 compared to
$0.25 last year.

    
    Following is a summary of Adjusted EPS:

                                     Second Quarter         Year-To-Date
                                     2008      2007        2008      2007
                                     ----      ----        ----      ----
    EPS from continuing
     operations                    $(0.07)   $(0.05)     $(0.07)   $(0.01)
    Restructuring and other
     related costs,
     net of tax(i)                  $0.07     $0.18       $0.11     $0.26

    Adjusted EPS(ii)(iii)          ($0.01)    $0.13       $0.03     $0.25

    Discontinued operations                   $0.04                 $0.08

    EPS before restructuring
     and other related
     costs(ii)                     ($0.01)    $0.17       $0.03     $0.33

    (i)  Includes the per share impact of restructuring and other related
         costs net of tax and minority interest and includes the recognition
         of a tax benefit of $5.1 million in Q2 2007 related to the sale of
         the animal nutrition business.
    (ii) These are not recognized measures under Canadian GAAP. Management
         believes that this is the most appropriate basis on which to
         evaluate results, as restructuring and other related costs are not
         representative of continuing operations.
    (iii) Does not add due to rounding.

    Business Segment Review
    -----------------------

    Following is a summary of Adjusted Operating Earnings by business segment:

                                Second Quarter           Year-To-Date (iii)

    ($ millions)            2008    2007   Change     2008    2007   Change
                            ----    ----   -------    ----    ----- --------
    Meat Products Group    $ 5.7   $ 15.0   (62.0%)  $ 30.7  $ 36.5  (15.8%)
    Agribusiness Group(i)    7.6      4.7    62.2%      4.8     5.5  (12.5%)
                          ---------------------------------------------------
    Protein Group           13.3     19.7   (32.5%)    35.5    42.0  (15.4%)
    Bakery Products Group    8.7     33.4   (74.0%)    25.8    61.1  (57.7%)
    Non-allocated Costs(ii) (3.1)    (0.4)      -      (9.4)   (0.5)     -
                          ---------------------------------------------------
                          $ 18.9   $ 52.7   (64.1%)   $52.0  $102.5  (49.3%)
                          ---------------------------------------------------

    (i)   Agribusiness Group excludes the results of the animal nutrition
          business that are reported as discontinued operations.
    (ii)  Non-allocated costs include costs related to the Company's
          IT system conversion, certain shared services and consulting
          expenses related to restructuring initiatives. Management believes
          that not allocating these costs provides a more comparable
          assessment of segment operating results.
    (iii) Table does not add due to rounding.
    

    Meat Products Group (value-added processed packaged meats; chilled meal
    entrees and lunch kits; value-added pork, poultry and turkey products;
    and global meat sales.)

    Adjusted Operating Earnings for the second quarter were $5.7 million
compared to $15.0 million last year, primarily due to a decline in fresh
poultry margins as a result of higher feed and related live bird costs and the
effect of a stronger Canadian dollar, which offset improvements in pork
processor margins. In the fresh pork business, although results improved over
last year, the Company did not realize the full benefit of improved industry
margins due to volatility of hog prices in the period. The packaged meat and
meals business was impacted by inflationary pressures and costs of investment
in innovation. The Company will continue to increase prices to manage rising
costs.
    The restructuring of the Company's protein operations, which involves
significantly reducing the size of its hog and fresh pork operations and
expanding its value added meat and meals businesses, is proceeding on schedule
and is expected to be completed by the end of 2009. Early benefits were
realized from lower manufacturing overheads due to the closure of three
sub-scale processing plants, double-shifting the front-end processing at the
Brandon pork plant, and reduced administration expenses. The financial
benefits from these initiatives have to date been offset by start-up costs,
but management expects the restructuring to contribute on a net basis to
earnings in the second half of the year.
    A key element of the restructuring is the consolidation of six pork
processing plants into one double-shifted operation in Brandon, Manitoba,
which will supply raw materials for the Company's packaged meat business. In
2007, the front-end processing at Brandon was increased from 45,000 to 75,000
hogs a week on two shifts, enabling the closure of two older facilities in
Saskatoon and Winnipeg. In July 2008, the back-end "cut" operations were
commissioned, thus finalizing the double-shift expansion of this factory. In
the first month of operations, the facility has been running at target volumes
with a smooth startup. This expansion will enable the closure of another
facility in Winnipeg at the end of the third quarter of 2008. The Company has
also commenced marketing its pork facility in Burlington, Ontario, which
processes over two million hogs annually. By consolidating these operations in
Brandon and reducing the number of pigs processed, significant cost reduction,
scale efficiencies and margin improvements are expected to be realized. The
successful start up of the Brandon second shift will also result in the
cessation of duplicate and start up costs of this project that have so far
been charged to earnings, primarily in the second quarter.
    Concurrent with the Brandon expansion, expansion at the Lagimodiere Road
plant in Winnipeg has established an efficient operation for boning all of the
hams produced at the Brandon plant. The Lagimodiere plant will meet all the
Company's input requirements of boned hams for production of value-added
packaged meat products.
    Two new distribution warehouses in Western Canada were commissioned
during 2008, allowing the consolidation of existing warehouses and third party
storage into these facilities, in Coquitlam and Saskatoon. Although  start-up
costs associated with the commissioning of these facilities are expected,
reduced costs and improved efficiencies should contribute to earnings towards
the end of the year.

    Agribusiness Group (swine production and animal by-products recycling)

    Adjusted Operating Earnings for the second quarter were $7.6 million
compared to $4.7 million last year. The Company's rendering operations
achieved strong results in the quarter, benefiting from higher commodity
prices, and increased contributions from its biodiesel operations as higher
fuel prices and an increase in volumes contributed to profitability. The
Company's biodiesel facility in Montreal is now operating at full capacity.
    Hog production losses for the period increased by $2.2 million compared
to last year, an improved performance compared to the first quarter of 2008.
North American hog producers benefited from an improvement in prices in the
second quarter, however, Canadian hog producers were disadvantaged by a
decline in the US dollar which reduces net revenues for finished hogs. The
Company continues to reduce the size of its hog production operation,
marketing 299,000 finished hogs during the quarter compared to 332,000 last
year and 338,000 in the first quarter of 2008. Following the sale of its
Alberta and Ontario investments, this number will decline to approximately
212,000 hogs per quarter by the end of July 2008. Restructuring of the core
hog production operations in Manitoba is materially complete and the Company
benefited from cost reductions in these operations during the quarter. High
feed prices and related production losses are resulting in some herd
liquidation in North America that should improve supply and demand dynamics
and contribute to improved hog production margins later in 2008 or early in
2009.

    Bakery Products Group (fresh, frozen and branded value-added bakery
    products, including frozen par-baked bakery products; and specialty pasta
    and sauces)

    Adjusted Operating Earnings for the quarter were $8.7 million compared to
$33.4 million last year. High wheat, fuel and other input costs compressed
margins as price increases implemented earlier in the year were not sufficient
to cover these rapid cost increases. Management anticipates that a decrease in
wheat prices from new crops, due to be harvested in August, and improved
supplies will lower costs toward the end of the year and restore margins. As
the rest of the year progresses, any further inflationary increases, such as
energy, or unanticipated increases in the cost of wheat will be managed by
further price increases. Bakery Products Group earnings were also impacted by
increased investments in marketing and innovation initiatives.
    Earnings in the U.K. operations continue to track ahead of last year,
benefiting from the contribution of acquisitions in new product categories.
Bagel growth rates were slower in the first half of the year as production was
curtailed in the Company's U.K. bagel plant due to an oven fire. Growth rates
are expected to improve in the second half of the year as production rates and
advertising and promotion activities are restored from July 2008.
    The North American frozen bakery operations are implementing changes to
increase capacity utilization and improve margins. This includes the closure
of a bagel facility in Toronto and transfer of production to other regional
plants. An expansion at the Company's Roanoke Virginia plant is expected to be
commissioned through the second half of 2008, improving product costs and
reducing freight and distribution costs to supply regional customers.

    Other Matters
    -------------

    On July 24, 2008, Maple Leaf Foods Inc. declared a dividend of $0.04 per
share payable on September 30, 2008 to shareholders of record on September 8,
2008. Unless indicated otherwise, by the corporation, in writing at or before
the time the dividend is paid, each dividend paid by the corporation in 2008
or a subsequent year is an eligible dividend for the purposes of the "Enhanced
Dividend Tax Credit System."
    On July 17, 2008, the Company purchased 458,800 additional shares in
Canada Bread for cash consideration of $32.6 million. The Company's ownership
interest in Canada Bread has increased from 88.0% to 89.8%, as a result of
this transaction.

    Forward-Looking Statements
    --------------------------

    This document contains, and the Company's oral and written public
communications often contain, forward-looking statements that are based on
current expectations, estimates, forecasts and projections about the
industries in which the Company operates and beliefs and assumptions made by
the Management of the Company. Such statements include, but are not limited
to, statements with respect to our objectives and goals, as well as statements
with respect to our beliefs, plans, objectives, expectations, anticipations,
estimates and intentions. Words such as "expect", "anticipate", "intend",
"attempt", "may", "will", "plan", "believe", "seek", "estimate", and
variations of such words and similar expressions are intended to identify such
forward-looking statements. These statements are not guarantees of future
performance and involve assumptions and risks and uncertainties that are
difficult to predict. Therefore, actual outcomes and results may differ
materially from what is expressed, implied or forecasted in such
forward-looking statements. The Company does not intend, and the Company
disclaims any obligation to update any forward-looking statements, whether
written or oral, or whether as a result of new information, future events or
otherwise except as required by law.
    These forward-looking statements are based on a variety of factors and
assumptions including, but not limited to: the condition of the Canadian and
United States economies; the rate of appreciation of the Canadian dollar
versus the U.S. dollar and Japanese yen; the availability and saleability of
prices of livestock, raw materials, energy and supplies; product pricing; the
competitive environment and related market conditions; improvement of
operating efficiencies; continued access to capital; the cost of compliance
with environmental and health standards; adverse results from ongoing
litigation; no expected actions of domestic and foreign governments and the
general assumption that none of the risks identified under "Risk Factors" in
the Company's 2007 Annual Information Form will materialize. These assumptions
have been derived from information currently available to the Company
including information obtained by the Company from third-party industry
analysts.
    Actual results may differ materially from those predicted by such
forward-looking statements. While the Company does not know what impact any of
these differences may have on its business, results of operations, financial
condition and the market price of its securities may be materially adversely
affected. Factors that could cause actual results or outcomes to differ
materially from the results expressed or implied by forward-looking statements
are discussed more fully in the Company's Management's Discussion and Analysis
for the year ended December 31, 2007, which is available on SEDAR at
www.sedar.com.
    Maple Leaf Foods Inc. is a leading food processing company, headquartered
in Toronto, Canada. The Company employs approximately 23,500 people at its
operations across Canada and in the United States, the United Kingdom and
Asia. The Company had sales of $5.2 billion in 2007.
    An investor presentation related to the Company's second quarter
financial results is available at www.mapleleaf.com and can be found under
Investor Relations on the Quarterly Results page. A conference call will be
held at 11:00 a.m. EDT on July 24, 2008 to review Maple Leaf Foods' second
quarter financial results. To participate in the call, please dial
416-641-6143 or 866-542-4241. For those unable to participate, playback will
be made available an hour after the event at 416-695-5800 / 800-408-3053
(Passcode 3265946 followed by the number sign).
    A webcast presentation of the second quarter financial results will also
be available at http://investor.mapleleaf.ca via a link
http://events.startcast.com/events/91/B0027.


    
           Consolidated Financial Statements
           (Expressed in Canadian dollars)

           MAPLE LEAF FOODS INC.

           Three and six months ended June 30, 2008 and 2007


    MAPLE LEAF FOODS INC.
    Consolidated Balance Sheets
    (In thousands of Canadian dollars)

    -------------------------------------------------------------------------
                                             As at        As at        As at
                                           June 30,     June 30, December 31,
                                              2008         2007         2007
    -------------------------------------------------------------------------
                                        (Unaudited)  (Unaudited)

    ASSETS

    Current assets
      Cash and cash equivalents        $    16,419  $    50,249  $    28,222
      Accounts receivable                  239,596      207,449      202,285
      Inventories                          388,746      387,009      351,064
      Future tax asset - current            39,886        9,415       25,409
      Prepaid expenses and other assets     23,922       23,856       16,529
      Assets held for sale                       -      348,376       10,092
      -----------------------------------------------------------------------
                                           708,569    1,026,354      633,601

    Investments in associated companies      2,656        1,068        1,207

    Property and equipment               1,172,268    1,104,217    1,126,727

    Other long-term assets                 312,423      278,608      303,360

    Future tax asset - non-current          39,011       18,270       22,837

    Goodwill                               856,758      802,403      817,477

    Other intangibles                       93,263       85,521       92,635

    -------------------------------------------------------------------------
                                       $ 3,184,948  $ 3,316,441  $ 2,997,844
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY

    Current liabilities
      Bank indebtedness                $    10,092  $    10,667  $     9,845
      Accounts payable and accrued
       charges                             534,754      565,025      550,528
      Income and other taxes payable         7,243       21,144       12,881
      Current portion of long-term debt     12,251       74,787       17,945
      Liabilities related to assets
       held for sale                             -       61,433            -
      -----------------------------------------------------------------------
                                           564,340      733,056      591,199

    Long-term debt                       1,089,793    1,257,611      855,281

    Future tax liability - non-current      68,349        7,013       61,935

    Other long-term liabilities            247,530      249,269      248,448

    Minority interest                       81,586       83,269       79,554

    Shareholders' equity                 1,133,350      986,223    1,161,427

    -------------------------------------------------------------------------
                                       $ 3,184,948  $ 3,316,441  $ 2,997,844
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------




    MAPLE LEAF FOODS INC.
    Consolidated Statements of Earnings
    (In thousands of Canadian dollars, except share amounts)

    -------------------------------------------------------------------------
                                Three months ended          Six months ended
                                           June 30,                  June 30,
    (Unaudited)                  2008         2007         2008         2007
    -------------------------------------------------------------------------

    Sales                 $ 1,355,301  $ 1,318,773  $ 2,558,564  $ 2,634,908

    Cost of goods sold      1,204,824    1,149,931    2,252,161    2,298,703
    -------------------------------------------------------------------------

    Gross margin          $   150,477  $   168,842  $   306,403  $   336,205
    Selling, general and
     administrative
     expenses                 131,587      116,175      254,415      233,679
    -------------------------------------------------------------------------

    Earnings from
     continuing operations
     before restructuring
     and other related
     costs                $    18,890  $    52,667  $    51,988  $   102,526
    Restructuring and
     other related costs      (11,618)     (30,715)     (19,340)     (43,425)
    -------------------------------------------------------------------------

    Earnings from
     continuing
     operations           $     7,272  $    21,952  $    32,648  $    59,101

    Other income                1,933        1,501        1,918        1,969
    -------------------------------------------------------------------------

    Earnings from
     continuing operations
     before interest and
     income taxes         $     9,205  $    23,453  $    34,566  $    61,070

    Interest expense           21,868       25,352       43,531       49,943
    -------------------------------------------------------------------------

    Earnings (loss) from
     continuing operations
     before income taxes  $   (12,663) $    (1,899) $   (8,965) $    11,127

    Income taxes               (4,079)       1,749       (1,959)       7,965
    -------------------------------------------------------------------------

    Earnings (loss) from
     continuing operations
     before minority
     interest             $    (8,584) $    (3,648) $    (7,006) $     3,162

    Minority interest             769        2,810        2,357        4,354
    -------------------------------------------------------------------------

    Net loss from
     continuing
     operations           $    (9,353) $    (6,458) $   (9,363) $    (1,192)
    Net earnings from
     discontinued
     operations
     - net of income tax            -        4,787            -        9,984
    -------------------------------------------------------------------------
    Net earnings (loss)   $    (9,353) $    (1,671) $   (9,363) $     8,792
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic earnings (loss)
     per share
      from continuing
       operations         $     (0.07) $     (0.05) $     (0.07) $     (0.01)
      from discontinued
       operations                   -         0.04            -         0.08
    -------------------------------------------------------------------------
                          $     (0.07) $     (0.01) $     (0.07) $      0.07
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Diluted earnings (loss)
     per share
      from continuing
       operations         $     (0.07) $     (0.05) $     (0.07) $     (0.01)
      from discontinued
       operations                   -         0.04            -         0.08
    -------------------------------------------------------------------------
                          $     (0.07) $     (0.01) $     (0.07) $      0.07
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Weighted average
     number of shares
     (millions)                 126.9        127.7        127.1        127.4
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------





    MAPLE LEAF FOODS INC.
    Consolidated Statements of Comprehensive Income (Loss)
    (In thousands of Canadian dollars)

    -------------------------------------------------------------------------
                                Three months ended          Six months ended
                                           June 30,                  June 30,
    (Unaudited)                  2008         2007         2008         2007
    -------------------------------------------------------------------------

    Net earnings (loss)
     for the period       $    (9,353) $    (1,671) $   (9,363) $     8,792

    Other comprehensive
     income (loss)
      Change in accumulated
       foreign currency
       translation
       adjustment               1,507       (6,704)       8,234       (7,590)
      Change in unrealized
       derivative loss
       on cash flow hedges     (1,593)       5,491       (4,639)      10,814
    -------------------------------------------------------------------------
                          $       (86) $    (1,213) $     3,595  $     3,224
    -------------------------------------------------------------------------
    Comprehensive income
     (loss)               $    (9,439) $    (2,884) $    (5,768) $    12,016
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------





    Consolidated Statements of Retained Earnings
    (In thousands of Canadian dollars)

    -------------------------------------------------------------------------
                                                    Six months ended June 30,
    (Unaudited)                                            2008         2007
    -------------------------------------------------------------------------

    Retained earnings, beginning of period          $   390,784  $   204,415

    Net earnings (loss) for the period                   (9,363)       8,792
    Dividends declared ($0.08 per share; 2007:
     $0.08 per share)                                   (10,448)     (10,224)
    Premium on shares repurchased for cancellation       (5,515)           -
    Premium on shares issued from Restricted
     Share Unit Trust                                      (822)           -

    -------------------------------------------------------------------------
    Retained earnings, end of period                $   364,636  $   202,983
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------





    MAPLE LEAF FOODS INC.
    Consolidated Statements of Cash Flows
    (In thousands of Canadian dollars)

    -------------------------------------------------------------------------
                                Three months ended          Six months ended
                                           June 30,                  June 30,
    (Unaudited)                  2008         2007         2008         2007
    -------------------------------------------------------------------------

    CASH PROVIDED BY (USED IN)
    Operating activities
    Net loss from
     continuing
     operations           $    (9,353) $    (6,458) $   (9,363) $    (1,192)
    Add (deduct) items not
     affecting cash:
      Depreciation and
       amortization            38,637       34,889       73,709       69,982
      Stock-based
       compensation             3,923        3,414        8,186        7,085
      Minority interest           769        2,810        2,357        4,354
      Future income taxes      (8,944)      (7,472)      (9,248)     (10,883)
      Loss (gain) on sale
       of property and
       equipment                   37          377          118          (82)
    Change in other
     long-term receivables         52          128          396       (2,182)
    Decrease in net
     pension asset             (5,031)     (11,668)     (11,062)     (28,092)
    Asset impairments and
     change in restructuring
     provisions                 7,381       24,425       11,344       28,146
    Other                         (66)      (6,632)      (3,631)      (3,423)
    Change in non-cash
     operating working
     capital                  (87,636)     (38,447)    (111,905)     (78,619)
    -------------------------------------------------------------------------
    Cash provided by
     (used in) operating
     activities of
     continuing
     operations           $   (60,231) $    (4,634) $   (41,837) $   (14,906)
    Cash provided by
     (used in) operating
     activities of
     discontinued
     operations                     -        4,232            -       (3,117)
    -------------------------------------------------------------------------
                          $   (60,231) $      (402) $   (41,837) $   (18,023)
    Financing activities
      Dividends paid           (5,262)      (5,133)     (10,448)     (10,224)
      Dividends paid to
       minority interest         (184)        (183)        (416)        (434)
      Net increase in
       long-term debt         103,810       45,784      221,334      117,627
      Increase in share
       capital                  1,513       12,887        3,110       15,102
      Purchase of
       treasury stock          (4,992)           -      (11,341)           -
      Shares repurchased
       for cancellation       (11,814)           -      (11,814)           -
      Other                    (1,816)        (729)      (1,301)       7,377
    -------------------------------------------------------------------------
    Cash provided by
     financing activities
     of continuing
     operations           $    81,255  $    52,626  $   189,124  $   129,448
    Cash provided by
     (used in) financing
     activities of
     discontinued
     operations                     -            9            -         (389)
    -------------------------------------------------------------------------
                          $    81,255  $    52,635  $   189,124  $   129,059
    Investing activities
      Additions to
       property and
       equipment              (62,654)     (59,300)    (108,364)    (111,725)
      Proceeds from sale
       of property and
       equipment                2,524        1,040       10,545        1,786
      Acquisition of
       businesses
       - net of cash
       acquired                   (87)      (2,628)     (61,659)     (13,431)
      Proceeds on sale
       of investments               -        1,622            -        1,622
      Proceeds on disposal
       of business                  -            -            -        5,470
      Purchase of Canada
       Bread shares                 -            -            -       (6,521)
      Other                       210       (2,787)         141          121
    -------------------------------------------------------------------------
    Cash used in investing
     activities of
     continuing
     operations           $   (60,007) $   (62,053) $  (159,337) $  (122,678)
    Cash used in investing
     activities of
     discontinued
     operations                     -         (813)           -       (4,140)
    -------------------------------------------------------------------------
                          $   (60,007) $   (62,866) $  (159,337) $  (126,818)
    Increase (decrease)
     in cash and
     cash equivalents         (38,983)     (10,633)     (12,050)     (15,782)
    Net cash and cash
     equivalents,
     beginning of period       45,310       50,215       18,377       55,364
    -------------------------------------------------------------------------
    Net cash and cash
     equivalents,
     end of period        $     6,327  $    39,582  $     6,327  $    39,582
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------





    MAPLE LEAF FOODS INC.
     Segmented Financial Information
    (In thousands of Canadian dollars)

    -------------------------------------------------------------------------
                                Three months ended          Six months ended
                                           June 30,                  June 30,
    (Unaudited)                  2008         2007         2008         2007
    -------------------------------------------------------------------------

    Sales
      Meat Products Group $   856,638  $   878,966  $ 1,619,183  $ 1,774,692
      Agribusiness Group       61,567       64,445      120,161      127,349
      Bakery Products Group   437,096      375,362      819,220      732,867
    -------------------------------------------------------------------------
                          $ 1,355,301  $ 1,318,773  $ 2,558,564  $ 2,634,908
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings from
     continuing operations
     before restructuring
     and other related
     costs
      Meat Products Group $     5,718  $    15,033  $    30,730  $    36,514
      Agribusiness Group        7,596        4,684        4,816        5,505
      Bakery Products Group     8,671       33,391       25,828       61,053
      Non-allocated costs      (3,095)        (441)      (9,386)        (546)
    -------------------------------------------------------------------------
                          $    18,890  $    52,667  $    51,988  $   102,526
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Capital expenditures
      Meat Products Group $    38,756  $    24,406  $    71,851  $    61,124
      Agribusiness Group        4,077        3,986        6,976        6,626
      Bakery Products Group    19,821       30,908       29,537       43,975
    -------------------------------------------------------------------------
                          $    62,654  $    59,300  $   108,364  $   111,725
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Depreciation and
     amortization
      Meat Products Group $    19,552  $    17,204  $    37,578  $    34,590
      Agribusiness Group        4,333        4,769        8,167        9,657
      Bakery Products Group    14,752       12,916       27,964       25,735
    -------------------------------------------------------------------------
                          $    38,637  $    34,889  $    73,709  $    69,982
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                             As at        As at        As at
                                           June 30,     June 30, December 31,
                                              2008         2007         2007
    -------------------------------------------------------------------------
                                        (Unaudited)  (Unaudited)

    Total assets
      Meat Products Group              $ 1,716,978  $ 1,603,563  $ 1,560,244
      Agribusiness Group                   251,004      652,496      302,999
      Bakery Products Group                901,740      823,844      823,137
      Non-allocated assets                 315,226      236,538      311,464
    -------------------------------------------------------------------------
                                       $ 3,184,948  $ 3,316,441  $ 2,997,844
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Goodwill
      Meat Products Group              $   450,930  $   450,643  $   450,929
      Agribusiness Group                    12,922        2,042        2,058
      Bakery Products Group                392,906      349,718      364,490
    -------------------------------------------------------------------------
                                       $   856,758  $   802,403  $   817,477
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    





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