Dairy Brands Forecasts Full Year Profit

NEWS RELEASE EMBARGOED UNTIL 10 FEBRUARY 2000

DAIRY BRANDS FORECASTS FULL YEAR PROFIT

Dairy Brands New Zealand Limited (Dairy Brands) today announced a net loss of $868,000 for the six month period ended 30 November 1999. This compares with a net loss of $1.713 million for the previous corresponding period.

Dairy Brands is forecasting a return to profit for the 1999/2000 financial year, following substantial losses in the last two years ($1.929 million in 1998/99).

Revenue for the half year was down 11.9 per cent to $2.5 million, compared with $2.84 million for the previous corresponding period. Total shareholders' equity was
$20.5 million at 30 November 1999 compared to $21.4 million at 31 May 1999. Total assets were $38.9 million, compared to $40.6 million at 31 May 1999.

Significant change has taken place in the management structure and ownership of Dairy Brands in the six months since the last balance date.

Former majority shareholders, Savoy Equities, has now been replaced by a new base of shareholders.

Mr Peter Jensen was appointed chairman in December following the Hon. Ruth Richardson's resignation. Institute of Directors chief executive Mr David Newman was also appointed a director.

Mr Jensen says that while there have been some costs associated with the implementation of the new management contract with Agriculture Resources Limited (ARL), these will be more than offset by the early impact of cost control measures.

Dairy Brands currently comprises a portfolio of 2,469 effective hectares spread over 14 farms. Twelve of these properties are managed by sharemilkers and two are company managed. The company commenced the season milking a total of 7375 dairy cows.

Production for the reporting period was 1.15 million kilograms of milk solids - 8 per cent higher than the corresponding period for the previous year.

Intensive reconfiguration of the supplementary feeding system is planned, which will result in further lowering of production costs without threatening milk flows. Consistent milk quality has been maintained throughout the period by all farms.

ENDS

Issued by Shandwick International - New Zealand
on behalf of Agriculture Resources Limited

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