Profits at The Bermuda Bakery are suffering due to increased competition from smaller bakeries.

Releasing unaudited financial results for the six months from January 1 to June 30 2002 yesterday, the Bermuda Bakery Limited and the Bermuda Bakery (Operations) Limited show a Net Income of $347,073 compared with $288,048 for the same period last year.

In a statement released with the results, David A.C. White, vice chairman of the board said: "The Bakery Division (Operations) continued to show a loss in the first six months as the company comes under heavy pressure from many small bakeries and a competitive retail sector."

The bakery's total sales declined 3.2 percent in the first six months of the year, however, Mr. White added: "Price increases, cost controls and reduced operating expenses partially offset the effect of the lower sales volume."

The company's rental division continued to perform well for the first six months, reflecting a modest increase in rents combined with continuing improvements in the efficiency of building controls and capital investments designed to improve energy efficiency.

Total revenue, from both divisions, for the first six months of the year were $3 million, which was 0.7 percent or $22,090 less than the first 6 months of 2001 while operating expenses have improved by 2.9 percent in this same period.

Earnings per share for the first six months of the year rose $0.20 or 20 percent to $1.21 per share compared to $1.01 per share in 2001. The company declared a dividend of $0.25 per share in the first quarter of the year. Similarly the Board of directors has authorised a dividend of $0.25 per share for the second quarter on those shares on record of August 9, 2002 and payable August 16, 2002.