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ATRIA GROUP PLC'S INTERIM REPORT, 1 Janu

18.8.2004 08:55
Atria Group plc  STOCK EXCHANGE RELEASE  18 August 2004 9.55 a.m.


ATRIA GROUP PLC'S INTERIM REPORT, 1 January – 30 June 2004

The Atria Group's operating profit for the review period was EUR
16.0 million (EUR 11.6 million). The Group's profit before
extraordinary items was EUR 13.7 million (EUR 7.9 million).
Turnover amounted to EUR 397.7 million (EUR 374.8 million),
earnings per share to EUR 0.48 (EUR 0.35) and equity per share to
EUR 10.70 (EUR 11.83).

PROFIT AND LOSS ACCOUNT GROUP                                    
(EUR Million)                      1-6/2004   1-6/2003  1-12/2003
                                                                 
TURNOVER                              397.7      374.8      765.1
NET OPERATING PROFIT                   16.0       11.6       30.9
PROFIT BEFORE EXTRAORDINARY            13.7        7.9       23.6
ITEMS
PROFIT BEFORE TAXES                    13.7        7.9       23.6
PROFIT                                 10.1        5.6       15.0
                                                                 
The taxes in the profit and loss                                 
account are equivalent tax on
income for the period under
review. The change in Finland's
tax rate has also been taken
into account in taxes.
                                                                 
BALANCE SHEET, GROUP                                             
(EUR Million)                                                    
ASSETS                            30.6.2004  30.6.2003 31.12.2003
FIXED ASSETS                                                     
Intangible assets                      45.6       47.8       47.5
Tangible assets                       257.4      250.7      255.4
Financial assets                        6.7        5.6        6.1
CURRENT ASSETS                                                   
Inventories                            43.7       45.7       47.9
Receivables                            98.2       88.1       89.7
Cash in hand and at bank               11.7       11.7        9.9
TOTAL                                 463.3      449.6      456.5
                                                                 
LIABILITIES                                                      
SHAREHOLDERS' EQUITY                                             
Share capital and                                                
other shareholders' equity            225.7      187.1      224.6
MINORITY INTEREST                       1.6        1.2        1.6
CREDITORS                                                        
Long-term                              92.4      113.8      104.3
Short-term                            143.6      147.5      126.0
TOTAL                                 463.3      449.6      456.5
                                                                 
KEY FIGURES (EUR)                                                
                                  30.6.2004  30.6.2003 31.12.2003
Gross investments in                                             
fixed assets                           16.9       19.0       36.4
Gross investments                                                
% of turnover                           4.3        5.1        4.8
Personnel on average                   3615       3564       3377
Earnings per share                     0.48       0.35       0.83
Shareholders' equity per share        10.70      11.83      10.65
Equity ratio, %                        49.1       41.9       49.6
Interest-bearing debt                 133.7      168.8      129.4
                                                                 
CONSOLIDATED CASH                                                
FLOW STATEMENT (EUR million)       1-6/2004   1-6/2003  1-12/2003
                                                                 
Cash flow from operations              23.6       14.4       54.5
Financing items and taxes              -4.4       -5.7      -15.1
Cash flow from operating               19.2        8.7       39.4
activities
                                                                 
Investing activities                  -16.9      -19.0      -36.4
Cash flow from investing              -16.9      -19.0      -36.4
activities
                                                                 
Issue of shares paid                      -          -       26.4
Net change in loans                     8.5       12.3      -29.2
Dividends paid                         -9.0       -6.7       -6.7
Net cash from financing                -0.4        5.6       -9.6
activities
                                                                 
Change in liquid funds                  1.8       -4.7       -6.5
                                                                 
CONSOLIDATED LIABILITIES                                         
(EUR million)                                                    
                                  30.6.2004  30.6.2003 31.12.2003
                                                                 
DEBTS INVOLVING MORTGAGES OR                                     
OTHER COLLATERAL AS SECURITY                                     
                                                                 
Loans from financial                   69.1       99.5       86.2
institutions
Pension loans                           5.7        5.1        5.3
Total                                  74.8      104.6       91.5
                                                                 
MORTGAGES AND OTHER COLLATERAL                                   
GIVEN AS GENERAL SECURITY                                        
                                                                 
Mortgages on real property             75.5       75.4       75.6
Mortgages on company assets            37.9       48.0       37.9
Other collateral                       45.4       47.1       42.9
Total                                 158.8      170.5      156.4
                                                                 
MORGAGES AND OTHER COLLATERAL                                    
GIVEN
ON BEHALF OF GROUP COMPANIES                                     
                                                                 
Guarantees                             34.4       34.3       34.5
                                                                 
CONTINGENT LIABILITIES NOT                                       
INCLUDED IN THE BALANCE SHEET                                    
                                                                 
Limits not used                        76.3       77.7       76.3
                                                                 
Guarantees                              1.4        0.9        1.4
                                                                 
Leasing liabilities                                              
Payable in the next                                              
financial year                          0.8        0.9        1.0
Payable later                           1.8        1.3        1.5
Total                                   2.6        2.2        2.5
                                                                 
                                                                 
The figures are not audited.                                     

ATRIA PERFORMS WELL IN THE FIRST HALF OF THE YEAR

The first—half result of Atria Group plc, Finland's largest meat
company and the biggest manufacturer of meat products in the
Nordic and Baltic countries, improved substantially on the
previous year. Profit before taxes was EUR 13.7 million (EUR 7.9
million in 2003), representing growth of 73.9%. In the second
quarter in particular, which is the most important season for the
industry, Atria performed well, generating net profit of EUR 9.7
million (EUR 5.8 million). Turnover in the first half of the year
was EUR 397.7 million (EUR 374.8 million), an increase of 6.1%.

Operations developed well in the first part of the year both in
Finland and in Sweden. Earnings improved in all the main product
groups. Despite the weak trend in selling prices, Atria succeeded
in lifting its sales and profitability by means of increased
operational efficiency across the organisation and through cost
management.

Buoyant summer sales despite rainy weather

Atria racked up good sales in the most important season of the
year. The mainline product of the grill season, Class-A Wilhelm
grill sausage, strengthened further its market leader's position.
Sales of cold cuts and retail-packed meat showed a good trend.
Poultry sales also developed well, in step with successful product
commercialisation and an improvement in overall competitiveness.
The growth in Atria's retail sales in the first half of the year
clearly outpaced the overall market growth.

The outlook for the meat wholesaling and export business also
improved during the spring, and inventory levels fell.
Nonetheless, overall profitability in the meat industry is still
unsatisfactory. Notably, producer prices for pigs have risen in
the entire EU area. In Finland, prices have moved in lockstep with
the price level in the nearest competitor countries, Sweden and
Denmark, but are partly lower than in certain countries in
continental Europe, where production is at a lower level than
consumption.

Lithells in Sweden shows a good earnings trend

Good earnings were reported by all the companies of the Lithells
Group: Atria Lithells AB, which manufactures meat products and
convenience foods, Atria Concept AB, which is in the fast food
business, and Svensk Snabbmat AB, a local wholesaler. The Lithells
Group will report a substantial improvement in full-year earnings
because this year is the first full year after downsizing of the
Samfood business operations that were acquired in 2002. Keen
competition poses a tough challenge for the organisation to keep
up its positive earnings trend in coming years as well.

Lithells AB had first-half turnover of EUR 145.8 million. All the
businesses in Sweden accounted for 38.0% of Atria's consolidated
turnover.

Liha ja Säilyke Oy invests in a dispatching centre

Liha ja Säilyke Oy is a specialised company whose operations
continued on a positive trend. Turnover amounted to EUR 20.4
million (EUR 20.1 million). Because the company has partially
exited the mass-market products business and specialised even
further, turnover growth has been fairly small, but the measures
have had a positive impact on the entire company’s earnings trend
in recent years. The dispatching centre functions will move into
new premises this autumn, with the breaking-in process getting
under way in August 2004. The premises which the previous
dispatching functions will make available are to be used for
developing and growing production operations.

Baltic countries

The new plant of Lithuania-based UAB Vilniaus Mesa has been placed
in operation stage by stage since May. The company's entire
production will move into the new plant during August. The company
is seeking to develop further its present market position in
Lithuania and Latvia. Over the long term, Atria is striving to
increase its operations throughout the Baltic area.

Russia

Since last autumn, Atria Group plc has been making an assessment
of the possibility of setting up operations in Russia. This effort
has included a market study and an extensive exploration of the
operating environment and companies in the meat-processing
industry. Atria has decided to proceed by way of an acquisition,
and the exploratory work is continuing on this basis. The process
has taken more time than anticipated because the aim is to carry
out the study and inquiries as thoroughly as possible in order to
reduce risks.

Investments

The Atria Group's investments in the first-half of the year came
to EUR 16.9 million. Lithells has an annual capital expenditure
level of about ten million euros. Atria Oy in Finland has decided
to centralise its pig slaughtering in Nurmo, for which purpose the
building of a new line has been started at an estimated cost of
EUR 21 million. The investment will be carried out during 2004-
2006. In order to cope with the needs brought by product
development and capacity bottlenecks and to keep overall
competitiveness at a continuing high level, Atria has decided on a
programme aiming at moving forward by one year the meat products
production investment in Nurmo that was planned for 2006. The
programme will cost just over EUR 10 million and comprise new
machine lines and production-improving investments.

The investments in Finland will not crimp Atria's possibilities of
moving ahead with its planned internationalisation programme.

Outlook for the future

Major changes are not expected to take place in Atria's present
market position in Finland and Sweden in the latter part of the
year. On the other hand, competition in the market will remain
tough, nor has the level of selling prices risen significantly,
despite the rise in raw material prices, for example. Atria is
nevertheless expecting full-year earnings to improve markedly on
the figure reported last year.

Of Finland's meat industry companies, Atria has the biggest share
of operations outside Finland. Although the Finnish market is of
course very important for the company, Atria is still targeting an
increase in the volume of operations abroad by strengthening the
company's position not only in Sweden, but above all in the Baltic
countries and in Russia.

Atria's profitability has improved thanks to successful processed
meat production and good performance in Sweden. The upswing in
profitability will support the company's ability to meet the
increasingly tough competition brought by globally expanding
trade. This means that Atria must have the ability to make further
inputs into developing functions both within Finland and beyond
its borders. Only then will Atria be in a position to ensure the
company’s competitiveness and the viability of the entire meat
production chain in coming years as in the past.

ATRIA GROUP PLC

Seppo Paatelainen
President

DISTRIBUTION

Helsinki Exchanges
Principal media

Interim reports are mailed upon request and are available on our
Internet site, www.atria.fi