Bermuda Bakery Ltd. brought in $2.85 million in revenue during the first six months of the year - but turned a profit of just $139,364, according to financials released by the company.

As part of an interim report the company said that its total revenue was 4.7 percent or $139,364 less than for the first six months of 2002 due to the reduced sales of bread and roll products, the company said.

The company added that the unaudited consolidated net income for the Bermuda Bakery Limited and the Bermuda Bakery (Operations) Ltd. for the first six months of 2003 compared to last year declined by $200,468 (56 percent).

The company announced on Friday that it was closing its bakery division - after 80 years of being the principal bakery for the Island's bread supplies.

"After a comprehensive review of the bread products market, and the unsatisfactory earnings and losses in the bakery operations over many years, the company's directors are moving forward with a restructuring plan that includes the discontinuation of the baking of breads and rolls," said the statement released on Friday.

"The bread baking operation will cease. Arrangements have been finalised to secure the supply of these products from alternate sources."

The company said that it would have to let go of a third of its workforce - 14 or 15 people - as it ceased its bread making.

The company said it planned, however, to continue to supply of the key brands and products "that Bermudians have come to know and trust" and the best selling bakery products such as Roman Meal will either be shipped in pre-baked or baked at another bakery on the Island.

Management has promised that there will not be an interruption of supply of these brands for the Island's customers.

In a letter to shareholders releasing the results David White, vice chairman of the board, said: "The bakery will retain two-thirds of its workforce and will continue to distribute breads and to bake cake and snack products from its present location.

"We are proud of our workforce and the contribution that generations of Bermudians have made to the company over the years."

The same letter to shareholders said that the Belvedere Building, and other holdings and investments of the real estate division, continued to perform well as a result of the "significant improvement" in the control of costs and the capital investments made in 2002 to improve energy efficiency.

It added that "Construction and installation of the new, highest efficiency air conditioning and air quality system is proceeding on schedule and is expected to be completed by the end of summer".

"This $750,000 project is the final phase in a planned upgrade to the Belvedere Building to ensure the most modern of facilities and environment for our tenants."

Earnings were $0.53 per share for the first half of 2003, a decline of $0.71 or 57.3 percent compared to $1.24 per share in the first six months of 2002.

The company also said it paid $0.25 per share dividend in the first quarter of the year, but in order to conserve cash reserves and to facilitate the new restructuring plan, the board of directors had decided that no dividend will be paid for the second quarter.

In 2003 total revenue was $2,854,430 versus $2,993,794 in 2002 and net income was $153,418 compared to $353,886 a year earlier.

A notice was also posted at the Bermuda Stock Exchange stating that at a board meeting on August 14, Peter Pearman was appointed a director of the company to fill "an existing casual vacancy". Mr. Pearman is an associate in the trust department of Conyers Dill & Pearman.