OBMVL: Oyster Bay Marlborough Vineyards Limited

02 March, 2004 Consolidated operating statement for the half year ended 31/12/2003

Unudited (NZ$000)
Current Previous
Period Corresponding
Period
OPERATING REVENUE
Sales revenue - -
Other revenue 14 5
Total Operating Revenue 14 5
OPERATING SURPLUS (DEFICIT)
BEFORE UNUSUAL ITEMS AND TAX (448) (150)
Unusual items
for separate disclosure - -
OPERATING SURPLUS (DEFICIT)
BEFORE TAX (448) (150)
Less tax on operating surplus - -
Operating surplus (deficit)
after tax but before minority
interest (448) (150)
Less minority interests - -
Equity earnings - -
OPERATING SURPLUS (DEFICIT)
AFTER TAX ATTRIBUTABLE
TO MEMBERS OF LISTED ISSUER (448) (150)
Extraordinary items after tax - -
Less minority interests - -
Extraordinary items after tax
attributable to members of the
Listed Issuer - -
TOTAL OPERATING SURPLUS
(DEFICIT) AND
EXTRAORDINARY ITEMS
AFTER TAX (448) (150)
Operating Surplus (Deficit)
and Extraordinary Items after
Tax attributable to Minority
Interest - -
Operating Surplus (Deficit)
and Extraordinary Items after
Tax attributable to Members
of the Listed Issuer (448) (150)
EPS (4.97) (1.66)
SHAREHOLDERS' EQUITY
ATTRIBUTABLE TO MEMBERS
OF THE HOLDING COMPANY 16,143 16,821

No Dividend

Oyster Bay Marlborough Vineyards Limited announced that as expected, for the six months ended 31 December 2003, the company recorded an operating loss of $461,797 compared with $154,577 for the same period last year.

The company is a dedicated grape grower, and revenue from its vineyards arise in the second half of its financial year, with an advance payment in January and final settlement after harvesting has been completed.

Correspondingly the accounts for the first half of the year, ending 31 December, record principally the operating and interest expenses incurred during that period, with some minor adjustments for interest and incidental income received.

Operating expenses at $171,713 were up on the prior period figure of $116,952 because of the additional activity undertaken in managing the new Fault Lake and Wairau River vineyards. The Directors are pleased to report that development work on these two vineyards was completed during the period and that both are fully planted, and will contribute to this year's vintage at 32% and 8% respectively of capacity at maturity.

Similarly, interest costs were $290,084 compared with $37,625 during the prior period as a consequence of the company having drawn down the full amount of the borrowings raised to develop the Fault Lake and Wairau River vineyards.

The growing season this year has been satisfactory with few frost incursions in October and November. All but one of these were predicted and our managers were able to take appropriate protective measures. Frost dusting was quite minor, and has not made a material impact on expected production for the season.

The warm spring and summer generally resulted in strong bunch development and at present the outlook is for total production slightly ahead of expectations, as is the case with most vineyards in the region. Price negotiations are starting to get under way as this report is written. We may expect increased supply to have some bearing on price, not least because of the disappearance of the high priced spot market which emerged last year as a consequence of the radically reduced harvest.

As foreshadowed at the Annual Meeting, a decision on dividend for the year will be taken when the harvest and price negotiations have been completed.

Despite reports of dramatic increases in wine supply throughout the world, the demand for quality wine from Marlborough remains strong, and the Directors have been examining opportunities to add two small blocks of leasehold land to the Oyster Bay estate. Details will be made available to shareholders when a specific proposition has been finalised.