Bevo Agro Inc. (BVO:TSX-Ven.) reports sales for the first quarter totaled $3,411,754 compared to $3,593,238 for the first quarter the year earlier. While lower than anticipated, the sales level was primarily caused by the lateness in propagation bookings because of depressed summer tomato prices. As clients have now established their product mix and placed orders for a variety of plants, Bevo anticipates increased sales shipments in the second quarter.

Because of the lower than expected sales level and an $111,681 loss on foreign exchange, Bevo reports a loss of $277,265 for the three months ending September 30, 2004 compared to a net profit of $42,501 for the three months ending September 30, 2003.

The gross margin of 32.5% was unchanged from the first quarter last year.

An increase in amortization and interest expenses of $356,486 related to the 11.5 acre expansion contributed to the increased operating expenses of $456,166.

EBITDA (Earnings before interest, taxes, depreciation and amortization) was $514,138 for the quarter.

The expansion to the present 34 acre plant which was completed early in 2004 allows Bevo to grow larger orders for major clients. An additional biomass alternative fuel system will almost eliminate dependence on natural gas, and substantial energy savings are anticipated based on current natural gas prices.

Bevo is disposing of its 160 acre Willcox, AZ property which is no longer integral to Bevo's long range plans. The US$215,000 sale is expected to close in January 2005 and the proceeds will be used for general corporate working capital purposes.

Bevo Agro is North America's leading supplier of propagated agricultural plants, growing and distributing vegetable, flower, berry and other plant seedlings to North America's growers. Bevo propagates quality seedlings and plants primarily for wholesale vegetable greenhouse growers, field growers and nursery operators from its 34 acre production facility.