Financial Results for the First Quarter of Fiscal 2005

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Net Earnings Up 26.5%

(MontrĂ©al, August 4, 2004) – Saputo Inc. released today its financial results for the first quarter of fiscal 2005, which ended June 30, 2004.

- Net earnings closed at $58.3 million, up 26.5% compared to the same period last year.

- Consolidated revenues totalled $1.019 billion, up 24.8% over revenues of $816.8 million posted one year earlier. The rise in the average selling price per pound of cheese on the US market, combined with the increase in sales volumes in Canada, as well as the contribution of our latest acquisition in Argentina during the period, were the driving factors behind the increase in revenues. Our Bakery Division had relatively stable revenues for this period.

- Consolidated EBITDA (1) for the first quarter of fiscal 2005 stood at $107.0 million, an increase of 18.0% or $16.3 million over the same period last year. Roughly 90% of the increase is the result of an increase in the EBITDA of our Cheese Division (USA), which benefited from the average selling prices per pound of cheese that were well above those of the previous year and from the implementation of operational improvements. The remainder of the increase in consolidated EBITDA came from our Canadian and Other Dairy Products Sector, with an increase of $3.2 million in this first quarter.

- EBITDA for the Canadian and Other Dairy Products Sector rose to $55.5 million, up 6.1% over the same period one year earlier. The EBITDA margin for this sector fell to 9.1%, compared to 10.2% the same quarter last year. This drop is mainly due to the dilutive effect of our activities in Argentina, which contribute to revenues but have few contributing effects on EBITDA.

- EBITDA for the US Dairy Products Sector totalled $44.5 million for the quarter ended June 30, 2004, resulting in a $14.6 million or 48.8% increase compared to $29.9 million for the same period in fiscal 2004. During the quarter, the average selling price per pound of cheese was up US$0.88 compared to the same period last year, which had a positive effect on the absorption of fixed costs. This increase also had a positive effect on the materialization of inventories between March 31, 2004 and June 30, 2004. On the other hand, the relationship between the average selling price per pound of cheese and the cost of milk as raw material had a negative effect.

- EBITDA for the Bakery Division stood at $7.0 million, a $1.5 million decrease compared to the same quarter last year.

- Cash generated before changes in non-cash operating working capital items amounted to $78.4 million for the first quarter of fiscal 2005, up 15.6% over the $67.8 million reported for the same period last year.

- Over the course of the first quarter, we reimbursed $27.5 million of long-term debt, in accordance with contractual obligations.

For more information on the results of the first quarter of fiscal 2005, we invite you to read the attached interim report for the quarter ended June 30, 2004, which forms an integral part of this press release.

The Board of Directors revised its policy and raised Company dividends. The quarterly dividend will therefore rise to $0.15 per share from $0.12 per share, for a total of $0.60 per share annually, representing a 25% increase. This dividend will become effective for the dividend payment of September 3, 2004 to shareholders of record on August 19, 2004.

Conference Call
A conference call to discuss the first quarter of fiscal 2005 results will be held on Wednesday, August 4, 2004 at 2:15 PM, Eastern time. To participate in the conference dial 1 866 207-8482. To ensure your participation, please dial in approximately five minutes before the call.

To listen to this call on the web, please enter in your web browser.

For those unable to participate, an instant replay will be available until midnight, Wednesday, August 11, 2004. To access the replay dial 1 888 562-2825, passcode 205029. The conference call will also be archived on the Saputo web site at

About Saputo
Founded in 1954, Saputo is celebrating, in 2004, 50 years of growth. During this time, the Company has maintained its family flavour and the vitality of a team whose passion is equalled only by its know-how… and its taste for good food! Saputo employs 7,500 individuals in its 43 plants and its distribution centres. Well established in the dairy and grocery products sectors, its products are offered under the brand names of Saputo, Stella, Frigo, Dragone, Armstrong, Caron, Cayer, Treasure Cave, Dairyland, Baxter, Nutrilait, La Paulina, Ricrem and Vachon. Saputo is the largest dairy processor in Canada, one of the largest cheese producers in North America and the third largest dairy processor in Argentina. Saputo Inc. is a public company whose shares are listed on the Toronto Stock Exchange under the symbol SAP. Visit our Web site at

(1) Measurement of results not in accordance with generally accepted accounting principles
The Company assesses its financial performance based on its EBITDA, this being earnings before interest, income taxes, depreciation and amortization. EBITDA is not a measurement of performance as defined by generally accepted accounting principles in Canada, and consequently may not be comparable to similar measurements presented by other companies.

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Claude Pinard
Vice President, Communications
(514) 328-3381

Quarterly Report