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Maple Leaf Foods Reports Strong Operating Performance



Toronto, Ontario
— Maple Leaf Foods
Inc. (TSE:MFI) today announced its results for the second quarter ended June
30, 2001.

Financial Results

Sales for the second quarter increased 23% to over $1.2 billion from $993
million last year, reflecting strong top-line growth in all our operating
groups. Earnings from operations for the second quarter rose 84% to $38.9
million from $21.2 million also resulting from increased earnings in all three
groups. Net earnings for the quarter were $12.8 million or $0.12 per share
compared to $3.0 million or $0.02 per share last year, bringing earnings for
the six months to $22.5 million or $0.21 per share compared to $8.5 million or
$0.07 per share last year.

“We are encouraged by the strong operating gains in each of our groups. Our
long-term strategy and vision have begun to materialize into bottom-line
results. We are optimistic that the solid foundation of world-class assets,
strategies and talent now in place will drive the company forward” said Mr.
Michael H. McCain, President & Chief Executive Officer of Maple Leaf Foods.

Meat Products Group


Meat Products Group sales increased 34% to $827 million as Maple Leaf Pork sales
nearly doubled quarter over quarter reflecting the inclusion of a full quarter
of sales from the Brandon, Manitoba pork facility, as well as sales from the
Winnipeg fresh pork facility acquired in the first quarter of this year.
Year-to-date sales of over $1.5 billion compared to $1.1 billion last year.
Operating earnings for the quarter were $9.1 million compared to a loss of $6.9
million last year, largely reflecting an improvement in overall fresh pork
operations and strong performance from the international trading operations.
Six month operating earnings of $19.5 million compared to a loss of $8.8
million the year before.

The Brandon pork facility accounted for a significant portion of the improvement
in Maple Leaf Pork’s operating earnings. The facility is not yet operating at
breakeven, due in part to seasonally high hog prices which put pressure on
margins; however, substantial operating improvements continue to be achieved.
We are still targeting for Brandon to contribute to profits by the end of the
year. Maple Leaf Foods International posted strong results due to increased
global sales, while Maple Leaf Consumer Foods and Maple Leaf Poultry reported
satisfactory results.

In July, Maple Leaf Poultry launched Maple Leaf Prime Naturally, Canada’s first
100% vegetable-grain fed, air-chilled branded chicken. Researchers at Shur-Gain
developed Nutri-Prime branded feed containing a premium blend of vegetable
grains and a proprietary blend of vitamins and minerals with no animal
by-products or animal fat. Maple Leaf Prime Naturally is one example of Maple
Leaf Foods’ commitment to innovation in response to emerging consumer
preference, and we are highly optimistic for its ongoing success in the
marketplace.

Bakery Products Group


Bakery Products Group sales increased to $173.9 million from $163.0 million last
year. Year-to-date sales increased to $337.5 million from $316.5 million last
year. Operating earnings for the quarter rose 29% to $7.2 million from $5.6
million, bringing year-to-date operating earnings to $13.5 million, an increase
of 54% over last year. The majority of this increase is attributed to the
strong growth in par-baked sales reported by Maple Leaf Bakery U.S.A. Canada
Bread continues to benefit from increased profitability on sales to Maple Leaf
Bakery.

In June, Maple Leaf Bakery announced an investment of US $11 million to expand
its Roanoke, Virginia facility. This expansion further strengthens its leading
position in the par-baked market as well as in premium frozen and specialty
baked goods. Maple Leaf Bakery is the leader in the growing U.S. par-baked
business as an increasing number of in-store bakeries switch to the convenience
and economics of par-baked products over more costly traditional methods.

Canada Bread’s acquisition of 75% of the outstanding shares of Multi-Marques
announced earlier this year remains subject to regulatory approval.

Agribusiness Group


Agribusiness Group sales of $223.6 million increased from $213.5 million last
year. Year-to-date sales increased to $425.5 million from $407.5 million last
year. Earnings from operations for the second quarter were $22.6 million
compared to $22.5 million last year, while year-to-date operating earnings of
$36.8 million declined from $40.5 million year over year.

Both Shur-Gain and Landmark Feeds reported continued strong results during the
quarter, generated by world-class research and product development capabilities
as well as synergies of scale. This helped to offset the lower operating
results at Rothsay Rendering which continues to be adversely impacted by high
energy prices. The Company continues to benefit from its Vertical Coordination
value chain strategy which provides a managed hedge to the cyclicality of the
pork industry.

Other Information


Other income for the quarter was $1.0 million compared to $1.6 million last
year. Interest expense for the quarter of $17.1 million increased from $16.4
million, while year-to-date interest expense of $33.4 million was up from $29.6
million due largely to higher borrowing levels.

The company declared a dividend of $0.04 per share payable on September 28, 2001
to shareholders of record on September 14, 2001.

“We are making steady progress towards achieving our long-term goals, and remain
dedicated to our vision of creating lasting value for our shareholders through
innovation and product development,” said Michael McCain. We are focused on
building leadership capacity in our company, and disciplined operations, to
produce tangible business results. We are very optimistic about the long term
prospects of our company.”

Maple Leaf Foods Inc. is a leading global food processing company. Headquartered
in Toronto, Canada, the Company employs more than 13,000 people at its
operations across Canada and in the United States, Europe and Asia. Maple Leaf
Foods reported sales of $3.9 billion in 2000.

A conference call will be held at 10:00 a.m. (Toronto time) on July 27, 2001 to
review Maple Leaf Foods’ financial results for the second quarter ended June
30, 2001. The call will be hosted by Michael H. McCain, President & Chief
Executive Officer; Tom P. Muir, Chief Financial Officer and Michael H. Vels,
Executive Vice-President, Finance.

To participate in the call, please dial in to 1-888-433-1657. For those unable
to attend, the call will be taped and posted for one month. You may access the
tape by dialling 1-800-558-5253, passcode 19344433 or review the transcript on
our website.