Grainnet

Maple Leaf Foods Reports 2Q Earnings of $18.9 Million, Down 64.1% From 2Q 2007

Toronto—Maple Leaf Foods Inc. (TSX: MFI) reported July 24 its financial results for the second quarter ended June 30, 2008.

"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.

For more information, call 416-926-2026.