SONAE DISTRIBUÇÃO, SGPS, SA

Head Office: R. João Mendonça, 529 - 4464-501 SENHORA DA HORA

Share Capital 1.100.000.000 Euros

Porto Commercial Registry and Fiscal Number 501 532 927

REPORT AND ACCOUNTS

30 JUNE 2007

REPORT OF THE BOARD OF DIRECTORS

30 JUNE 2007

Management Report Sonae Distribuição – S.G.P.S., S.A.

To the Shareholders,

In accordance with Portuguese Law and the company's articles of association, we hereby present the management report of Sonae Distribuição - S.G.P.S., S.A. (previously called Modelo Continente, SGPS, S.A.) for the first half 2007.

Performance during the period

Consolidated turnover of Sonae Distribuição totalled 1,495 million Euro for the first six months of 2007, up 10% compared to the same period of last year. In overall terms and for most brands, the very positive performance of stores on a like for like basis (5% growth) and the high level of organic growth achieved by the company over the last 12 months, reflected in the opening of 87 stores with around 54,000 m2 of sales area should be highlighted. This performance has taken place against a background of increasing market competition, especially in food retail, due to the strong pace of opening of new stores that has taken place (+10% in the number of m2 installed compared to June 2006) and which continues to be higher than the sales growth of modern retail operators (+7% on a moving annual basis).

In spite of this situation, the company's food retail brands showed very significant growth in sales (+10%), with a very positive performance by stores on a like for like basis (+5%), as a direct result of the strong success among customers of the Continente Card and the Modelo Card.

The company's non food retail brands also showed a very positive trend, with 14% growth in sales. The main highlights were the growth on a like for like basis in terms of stores (+3%), and the strong rate of organic growth achieved (+31,000m2 over the last 12 months for a total of 77 new stores).

In the first half of 2007, consolidated operational cash-flow of the company totalled 114 million Euro, an increase of 34% and 29 million Euro compared to the same period of last year. This increase was positively impacted by the net non recurring profit of 12 million Euro, as a result of the sale of the real estate assets of the Albufeira and Portimão Shopping Galleries. If these sales had not taken place, consolidated operational cashflow for the period would have totalled 102 million Euro, which also compares very favourably with prior periods, and equal to a increase of 0.5 p.p. in the operational profitablity margin of the company.

Also, on a consolidated basis and in the same period, the profits on ordinary activities of Sonae Distribuição, rose to 54 million Euro. This figure is equal to an increase of 48% compared to the first six months of 2006, driven by the company's fine performance during the current period. Consolidated net profits of the company amounted to 49 million Euro, an increase of 13% compared to the same period of last year.

Investment

Sonae Distribuição ended the first half of the year with 517 stores spread among thirteen brands, with a total of 565,000 m2 of sales area. Its investment plan for 2007 forecasts an increase of more than 10% in installed sales area (with a total of around 50,000 m2).

In food based retail, the company strengthened its presence in the Portuguese market, opening two new stores and converting the Ovar unit from the Modelo to the Continente brand. The "Outlet Continente" was also launched, a store concept with a very specific role in the offer of opportunities.
In non food retail, the company continued with the strong pace of opening of new stores, making available around 16,000 new m2, spread among 40 units. During the period, the company launched a new retail brand for garden products – Maxgarden – two stores having already been opened (Moita and Braga).

In the first six months of 2007, the company's gross investment totalled more than 100 million Euro (mainly spent on increasing the number of projects relating to Sonae Distribuição brands in Portugal) while the number of employees grew to more than 26,000, after the net addition of a further 1,000 new employees in the first six months of the year.

Capital structure

At the end of June, the company's consolidated net debt totalled 586 million Euro, reflecting sustained cash-flow generation and the level of investment made. The change compared to the same period of last year is explained in particular by the acquisition of 100 million own shares at the end of 2006 at a total cost of 205 million Euro. Despite this increase, the company continues to have a strong financial structure, demonstrated by a debt to operational cash-flow ratio of 1.8.

Corporate Governance

At the Shareholders' General Meeting on 2 May, the following members of statutory entities were elected:

• Board of Directors:

Duarte Paulo Teixeira de Azevedo (Chairman) Nuno Manuel Moniz Trigoso Jordão (CEO) Álvaro Carmona e Costa Portela (Director) Ângelo Gabriel Ribeirinho dos Santos Paupério (Director)

Statutory audit commitee: Manuel Guilherme Oliveira da Costa (Chairman) Arlindo Dias Duarte Silva (Effective non executive director) Óscar José Alçada da Quinta (Effective non executive director) Jorge Manuel Felizes Morgado (Acting non executive director)
Statutory auditor: Deloitte & Associados, SROC, S.A., represented by António Marques Dias – ROC or by António Manuel Martins Amaral – ROC
Shareholders Meeting Board: António Agostinho Cardoso da Conceição Guedes (Chairman) Clara Maria Azevedo Rodrigues Gomes (Secretary)
Remuneration Committee: Sonae, SGPS, SA (represented by Duarte Paulo Teixeira de Azevedo) Bruno Walter Lehman
Company Secretary: Alice da Assunção Castanho Amado
Deputy Secretary: Anabela Nogueira de Matos

On the same date, Adriano Virgílio Guimarães Ribeiro was appointed as Representative for Relations with the Financial Markets and the Portuguese Stock Exchange Regulatory Authority (CMVM).

At an Extraordinary Shareholders' meeting on 29 June, it was decided that the company Modelo Continente, SGPS, SA would change its name to Sonae Distribuição – S.G.P.S., S.A..

No other significant changes worthy of mention occurred in addition to those referred to above, and the guidelines relating to Corporate Governance defined in the 2006 Consolidated Management Report continued unchanged.

Outlook

Sonae Distribuição continues to maintain its business strategy, which is based on clearly defined objectives:

growth (both organic, and through acquisition opportunities which arise in the market);
strengthening of the value proposal to customers through continuous investment in efficiency and innovation.

Independently of the organic growth plan previously established by the company (both in the Portuguese and Spanish markets, in the latter in non food retail), which anticipates investing annually some 200 million Euro over the next three years, Sonae Distribuição informed the financial markets on the 27th of July of an agreement signed with the Carrefour group for the acquisition of 99.8648% of the share capital of Carrefour (Portugal) – Sociedade de Exploração de Centros Comerciais, SA.

On the 6th of August, the Portuguese Competition Authority was notified of this concentration operation as an inherent aspect of the acquisition process.

The company will await the opinion of the Competition Authority, and continues to be confident that this concentration operation will not be opposed.

Once this decision is taken, the deal will enable Sonae Distribuição to strengthen its leadership of the Portuguese food retail market, by immediately increasing the installed sales area of the company by 17% and year on year turnover by more than 16%. At the same time, it will allow Sonae Distribuição to leverage its organic growth programme for the next few years, through integrating projects under development by the company acquired.

Sonae Distribuição is confident that the operation will yield an adequate return through taking advantage of synergies in terms of:

developing own brands;
greater competitiveness in international sourcing;
dilution of fixed costs (in particular logistics and marketing).

Sonae Distribuição is also confident that the operation will benefit consumers, and also both teams of employees.

Matosinhos, 22 August 2007 The Board of Directors

Duarte Paulo Teixeira de Azevedo

Nuno Manuel Moniz Trigoso Jordão

Álvaro Carmona e Costa Portela

Ângelo Gabriel Ribeirinho dos Santos Paupério

Sonae Distribuição, SGPS, S.A.

DISCLOSURE OF SHARES AND OTHER SECURITIES HELD BY MEMBERS OF THE BOARD OF DIRECTORS AND OF TRANSACTIONS DURING THE YEAR INVOLVING SHARES AND OTHER SECURITIES

As required by article 9, nr. 1 b) of CMVM Regulation 04/2004, the following is a summary of the information disclosed to the company:

SHARES	Date		Purchases		Sales	Balance as of 30.06.2007
		Quantity	Aver. Price €	Quantity	Aver. Price €	Quantity
BOARD OF DIRECTORS
Duarte Paulo Teixeira de Azevedo
Efanor Investimentos, SGPS, SA (1)						1
Imparfin, SGPS, SA (3)						150,000
Migracom, SGPS, SA (4)						49,996
Sonae, SGPS, SA
Sale	22.05.2007			593,616	2.03
Shares attributed under a Share
Based Compensation Plan	01.06.2007	147,376	0
Sale	01.06.2007			147,376	2.17	3,293
Ângelo Gabriel Ribeirinho dos Santos Paupério Sonae, SGPS, SA						4,564
Alvaro Carmona e Costa Portela Sonae, SGPS, SA						25,934
Notes:
(1) Efanor Investimentos, SGPS, SA
Sonae, SGPS, SA						658,804,410
Pareuro, BV (2)						20,000
(2) Pareuro, BV
Sonae, SGPS, SA						400,000,000
(3) Imparfin, SGPS, SA
Sonae, SGPS, SA						4,105,273
(4) Migracom, SGPS, SA
Sonae, SGPS, SA
Purchase	22.05.2007	593,616	2.03
Purchase	01.06.2007	147,376	2.17			740,992

Sonae Distribuição, SGPS, S.A.

SHARES HELD AND VOTING RIGHTS OF COMPANIES OWNING MORE THAN 2% OF THE SHARE CAPITAL OF THE COMPANY

As required by article 9, nr 1, e) of CMVM Regulation 04/2004, the following shareholders held more than 2% of the company's share capital:

Shareholder		Nr. of shares	% of Voting Rights

Sonae, SGPS, SA		824,780,810	74.98%
Sonae Investments, BV		175,219,190	15.93%
Soflorin, BV (1)		100,000,000	9.09%
	Total attributable	1,100,000,000	100.00%

Notes:

(1) Considered Own Shares because the Company Soflorin, B.V. is wholly owned by Sonae Distribuição, SGPS, SA.

CONSOLIDATED FINANCIAL STATEMENTS

30 JUNE 2007

CONSOLIDATED BALANCE SHEETS AS AT 3O JUNE 2007 AND DECEMBER 2006

(Amounts expressed in Euro)

(Translation of financial statements originally issued in Portuguese - Note 28)

		IFRS
ASSETS	Notes	30-06-2007	31-12-2006
NON CURRENT ASSETS
Tangible and intangible assets	7	1,424,887,050	1,394,687,009
Goodwill	8	58,700,069	61,141,604
Investments	9	52,764,665	52,053,404
Deferred tax assets	12	19,583,057	23,413,248
Other non-current assets	10	1,802,307	1,825,831
Total non-current assets		1,557,737,148	1,533,121,096
CURRENT ASSETS
Inventory		380,770,028	340,651,297
Trade and other accounts receivables	11	200,300,427	176,777,383
Investments	9	33,705,423	33,261,362
Cash and cash equivalents	13	286,032,513	359,415,148
Total current assets		900,808,391	910,105,190
TOTAL ASSETS		2,458,545,539	2,443,226,286

EQUITY AND LIABILITIES
EQUITY
Share Capital	14	1,100,000,000	1,100,000,000
Own Shares		(205,000,000)	(205,000,000)
Reserves and retained earnings		(224,313,363)	(307,971,049)
Net profit for the period attributable to the shareholders of the Parent Company		49,076,515	158,079,602
Total equity attributable to the Shareholders of the Parent Company		719,763,152	745,108,553
Minority interests		11,160,270	10,930,910
TOTAL EQUITY		730,923,422	756,039,463
LIABILITIES:
NON CURRENT LIABILITIES
Loans	15	600,309,344	601,531,169
Other non current liabilities	16	12,436,414	13,001,800
Deferred tax liabilities	12	35,364,179	36,985,189
Provisions	19	23,116,622	21,978,393
Total non-current liabilities		671,226,559	673,496,551
CURRENT LIABILITIES
Loans	15	305,695,912	167,863,379
Trade creditors and other current liabilities	18	750,560,543	845,687,790
Provisions	19	139,103	139,103
Total current liabilities		1,056,395,558	1,013,690,272
TOTAL LIABILITIES		1,727,622,117	1,687,186,823
TOTAL EQUITY AND LIABILITIES		2,458,545,539	2,443,226,286

The accompanying notes are part of these consolidated financial statements

CONSOLIDATED INCOME STATEMENTS BY NATURE

FOR THE SIX MONTHS PERIODS ENDED 30 JUNE 2007 AND 2006

(Amounts expressed in Euro)

(Translation of financial statements originally issued in Portuguese - Note 28)

		2007		2006
	Notes	2nd Quarter 1	30-06-2007	2nd Quarter 1	30-06-2006
Operating Income:
Sales		732,131,494	1,429,985,363	678,856,330	1,303,771,076
Services rendered		37,552,311	65,156,785	35,487,105	56,441,124
Other operating income		71,507,804	149,571,889	58,734,567	118,959,053
Total operating income		841,191,609	1,644,714,037	773,078,002	1,479,171,253
Operating expenses:
Cost of sales		(564,173,098)	(1,121,944,643)	(528,191,932)	(1,029,260,998)
External supplies and services		(111,975,086)	(205,241,331)	(101,849,466)	(181,047,580)
Staff costs		(91,290,341)	(184,249,854)	(82,197,989)	(165,454,041)
Depreciation and amortization	7	(21,778,523)	(42,732,433)	(19,758,773)	(39,077,222)
Provisions and impairment losses	19	(96,540)	(181,530)	(671,810)	(801,148)
Other operational expenses		(5,660,328)	(19,211,404)	(10,221,000)	(18,015,257)
Total operational expenses		(794,973,916)	(1,573,561,195)	(742,890,970)	(1,433,656,246)
Net operating profit/(loss)		46,217,693	71,152,842	30,187,032	45,515,007
Financial profit/(loss)		(9,709,063)	(17,574,412)	(5,193,594)	(9,302,466)
Profit/(loss) related to associated companies		(465,984)	(467,924)	15,343	(128,827)
Profit/(loss) related to investments		(587,173)	(587,173)	(84,608)	12,465,497
Profit/(loss) before income tax		35,455,473	52,523,333	24,924,173	48,549,211
Income tax	22	(765,008)	(3,207,202)	(2,185,995)	(5,006,243)
Profit/(loss) after income tax		34,690,465	49,316,131	22,738,178	43,542,968
Consolidated profit/(loss) for the six month period		34,690,465	49,316,131	22,738,178	43,542,968
Attributable to: Equity holders of the Parent Company Minority interests		34,398,261 292,204	49,076,515 239,616	22,225,981 512,197	42,794,315 748,653
Profit/(loss) per share (basic and diluted)	23	0.03	0.04	0.02	0.04

(1) Prepared in accordance with International Financial reporting Standards IIAS/IFRS) but not subject to limited review by external auditors.

The accompanying notes are part of these consolidated financial statements

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE SIX MONTHS PERIODS ENDED 30 JUNE 2007 AND 2006

(Translation of financial statements originally issued in Portuguese - Note 28) (Amounts expressed in Euro)

			Att ribu tab le t	o S har eho lde	f P nt C rs o are om pan y
					Oth ers
	Sh are	Ow n	Le l ga	Co rsio nve n	and res erv es	Ne t		Min orit y	To tal
	ital cap	Sh are s	Re ser ves	res erv es	reta ine d e ing arn s	fit/( s) los pro	Tot al	inte ts res	Eq uity
Ba lan 1 J 20 06 at ce anu ary	1, 100 000 000 , ,		90 200 000 , ,	12 389 5,	( 829 549 ) 557 , ,	214 122 570 , ,	84 6, 618 410 ,	8, 717 734 ,	85 336 144 5, ,
Ap iati of c olid ate d p rofi t of 20 05 pro pr on ons
Tra nsf o le l re d r ine d e ing er t eta ga ser ves an arn s	-				214 122 570 , ,	( 214 122 570 ) , ,	-	-	-
Dis trib ute d d ivid end s	-				( 55, 000 000 ) ,	-	( 55, 000 000 ) ,	-	( 55, 000 000 ) ,
Ch in r ang es ese rve s							-
Ge ate d in nt p erio d ner cu rre	-		-	35 9, 170	-	-	35 9, 170	-	35 9, 170
Tra nsf ed for net inc err om e	-		-	-	-	-	-	-	-
Ac isit ion of sub sid iari qu es	-		-	-	-	-	-	20 960 ,	20 960 ,
Oth ers	-		-	-	( 27, 083 )	-	( 27, 083 )		( 27, 083 )
Ne lida ted ofit ( los s) for the six nth erio d e ndi 30 t co nso pr mo s p ng
Jun e 2 006	-		-	-	-	42 794 315 , ,	42 794 315 , ,	74 8, 653	43 542 968 , ,
Ba lan at 3 0 J 20 06 ce une	1, 100 000 000 , ,		90 200 000 , ,	484 559 ,	( 398 734 062 ) , ,	42 794 315 , ,	834 744 812 , ,	9, 487 347 ,	844 232 159 , ,
Ba lan at 1 J 20 07 ce anu ary	1, 100 000 000 , ,	( ) 205 000 000 , ,	90 200 000 , ,	51 0, 709	( ) 398 68 1, 758 ,	15 8, 079 602 ,	74 5, 108 553 ,	10 930 910 , ,	75 6, 039 463 ,
Ap iati of c olid ate d p rofi t of 20 06 pro pr on ons
nsf Tra er t o le l re d r eta ine d e ing ga ser ves an arn s	-		4, 800 000 ,	-	15 3, 279 602 ,	( ) 158 079 602 , ,	-	-	-
Dis trib ute d d ivid end s	-		-	-	( 75, 000 000 ) ,	-	( 75, 000 000 ) ,	( 10, 256 )	( 75, 010 256 ) ,
Ch in r ang es ese rve s							-
Ge ate d in nt p erio d ner cu rre	-		-	57 8, 09 1	-	-	57 8, 09 1	-	57 8, 09 1
Tra nsf ed lts to r err esu	-		-		-	-	-	-	-
Ac isit ion of sub sid iari qu es	-		-	-	-	-	-	-	-
Oth ers	-		-	-	( 7)	-	( 7)		( 7)
Ne lida ted ofit ( los s) for the six nth erio d e ndi 30 t co nso pr mo s p ng
Jun e 2 007	-		-	-	-	49 076 515 , ,	49 076 515 , ,	23 9, 616	49 316 131 , ,
Ba lan at 3 0 J 20 07 ce une	1, 100 000 000 , ,	( 205 000 000 ) , ,	95 000 000 , ,	1, 088 800 ,	( 320 402 163 ) , ,	49 076 515 , ,	71 9, 763 152 ,	11 160 270 , ,	73 0, 923 422 ,

The accompanying notes are part of these consolidated financial statements

SONAE DISTRIBUIÇÃO, S.G.P.S., S.A. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS PERIODS ENDED 30 JUNE 2007 AND 30 JUNE 2006 (Amounts expressed in Euro)

(Translation of financial statements originally issued in Portuguese - Note 28)

	Notes	30-06-2007	30-06-2006
OPERATING ACTIVITIES
Net cash flow from operating activities (1)		(55,636,389)	(51,081,680)
INVESTING ACTIVITIES
Cash receipts related to:
Investments		7,688,298	28,086,119
Tangible and intangible assets		33,892,375	508,750
Interest and similar income		2,135,267	3,055,756
Dividends		225,169	162,169
Loans granted		127,726,000	13,976,000
		171,667,109	45,788,794
Cash payments related to:
Investments		(6,939,633)	(33,278,770)
Tangible and intangible assets		(98,508,613)	(110,056,587)
Loans granted		(127,731,085)	(3,257)
		(233,179,331)	(143,338,614)
Net cash used in investing activities (2)		(61,512,222)	(97,549,820)
FINANCING ACTIVITIES
Cash receipts related to:
Loans obtained		1,107,216,000	609,000,392
Capital increase in subsidiaries		-	16,000
		1,107,216,000	609,016,392
Cash payments related to:
Loans obtained		(970,143,656)	(720,173,296)
Interest and similar charges		(17,220,355)	(13,976,768)
Dividends		(75,010,292)	(54,999,980)
		(1,062,374,303)	(789,150,044)
Net cash used in financing activities (3)		44,841,697	(180,133,652)
Net increase/(decrease) in cash and cash equivalents (4)=(1)+(2)+(3)		(72,306,914)	(328,765,152)
Effect of foreign exchange rate		70,508	(78,154)
Cash and cash equivalents at the beginning of the period		357,690,994	560,773,649
Cash and cash equivalents at the end of the period	13	285,454,588	231,930,343

The accompanying notes are part of these consolidated financial statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS PERIOD ENDED 30 JUNE 2007

(Amounts expressed in Euro)

(Translation of financial statements originally issued in Portuguese – Note 28)

1. INTRODUCTION

SONAE DISTRIBUIÇÃO, SGPS, S.A. ("the Company" or "Sonae Distribuição"), formerly known as Modelo Continente, SGPS, S.A., with head-office in Rua João Mendonça nº 529, 4464-501 Senhora da Hora, Portugal, is the Parent-company of a group of companies, as detailed in Notes 4 and 5 ("Sonae Distribuição Group").

2. BASIS OF PRESENTATION

Interim financial statements are presented quarterly, in accordance with IAS 34 – "Interim Financial Reporting".

3. PRINCIPAL ACCOUNTING POLICIES

The accounting policies adopted are consistent with those used in the preparation of the financial statements for the year ended 31 December 2006.

4. GROUP COMPANIES INCLUDED IN THE CONSOLIDATION

The subsidiaries, its head offices and percentage of capital held as of 30 June 2007 and 31 December 2006 are as follows:

	Head		Percentage of Capital Held 30.06.2007		Percentage of Capital held 31.12.2006
Company	Office	Direct	Total	Direct	Total
Parent company
Sonae Distribuição SGPS, S. A.	Matosinhos
Sonae Distribuição
Best Offer – Prestação de Informações pela Internet, S.A.	Maia	100.00%	100.00%	100.00%	100.00%
Bertimóvel - Sociedade Imobiliária, S.A.	Matosinhos	100.00%	100.00%	100.00%	100.00%
Bikini, Portal de Mulheres, S.A.	Maia	100.00%	100.00%	100.00%	100.00%
g) Cacetinho – Comércio Retalhista e Expl. Centros Comerciais, S.A.	Matosinhos	100.00%	100.00%	100.00%	100.00%
Canasta – Empreendimentos Imobiliários, S.A.	Maia	100.00%	100.00%	100.00%	100.00%
Carnes do Continente – Industria e Distribuição Carnes, S.A.	Santarém	100.00%	100.00%	100.00%	100.00%
Chão Verde - Sociedade de Gestão Imobiliária, S.A.	Maia	100.00%	100.00%	100.00%	100.00%
Citorres - Sociedade Imobiliária, S.A.	Maia	100.00%	100.00%	100.00%	100.00%
Cumulativa - Sociedade Imobiliária, S.A.	Maia	100.00%	100.00%	100.00%	100.00%
Contibomba - Comércio e Distribuição de Combustíveis, S.A.	Matosinhos	100.00%	100.00%	100.00%	100.00%
Contimobe - Imobiliária de Castelo de Paiva, S.A.	Castelo Paiva	100.00%	100.00%	100.00%	100.00%
Difusão - Sociedade Imobiliária, S.A.	Maia	100.00%	100.00%	100.00%	100.00%
Distrifin - Comercio y Prestacion de Servicios, S.A.	Madrid (Spain)	100.00%	100.00%	100.00%	100.00%
Efanor – Design e Serviços, S.A.	Matosinhos	100.00%	100.00%	100.00%	100.00%
Efanor - Industria de Fios, S.A.	Matosinhos	100.00%	100.00%	100.00%	100.00%
Equador & Mendes - Agencia de Viagens e Turismo, Lda	Lisbon	75.00%	67.50%	75.00%	67.50%
Estevão Neves - Hipermercados da Madeira, S.A.	Madeira	100.00%	100.00%	100.00%	100.00%
Fozimo - Sociedade Imobiliária, S.A.	Maia	100.00%	100.00%	100.00%	100.00%
Fozmassimo - Sociedade Imobiliária, S.A.	Matosinhos	100.00%	100.00%	100.00%	100.00%
b) Fundo Fechado de Investimento Imobiliário Efisa Imobiliário	Lisbon	100.00%	100.00%	100.00%	100.00%
Fundo de Investimento Imobiliário Imosonae Dois	Maia	100.00%	100.00%	100.00%	100.00%
Global S Hipermercado, Lda.	Matosinhos	100.00%	100.00%	100.00%	100.00%
IGI – Investimento Imobiliário, S.A.	Porto	100.00%	100.00%	100.00%	100.00%
Igimo – Sociedade Imobiliária, S.A.	Maia	100.00%	100.00%	100.00%	100.00%
e) Iginha – Sociedade Imobiliária, S.A.	Matosinhos	100.00%	100.00%	-	-
Imoconti – Sociedade Imobiliària, S.A.	Matosinhos	100.00%	100.00%	100.00%	100.00%
Imoestrutura – Sociedade Imobiliária, S.A.	Maia	100.00%	100.00%	100.00%	100.00%
Imomuro – Sociedade Imobiliária, S.A.	Matosinhos	100.00%	100.00%	100.00%	100.00%
Imoponte – Sociedade Imobiliária, S.A. f)	Maia	100.00%	100.00%	100.00%	100.00%
Imoresultado – Sociedade Imobiliária, S.A.	Maia	100.00%	100.00%	100.00%	100.00%
Imosistema – Sociedade Imobiliária, S.A.	Maia	100.00%	100.00%	100.00%	100.00%
Infofield – Informática, S.A.	Maia	100.00%	100.00%	100.00%	100.00%
Inventory - Acessórios de Casa, S.A.	Maia	100.00%	100.00%	100.00%	100.00%
Marcas MC, zRT	Budapest	100.00%	100.00%	100.00%	100.00%
Maxoffice – Artigos e Serviços para Escritório, S.A.	Maia	100.00%	100.00%	100.00%	100.00%
MJLF-Empreendimentos Imobiliários, S.A.	Maia	100.00%	100.00%	100.00%	100.00%
Modelo - Distribuição de Materiais de Construção, S.A.	Maia	50.00%	50.00%	50.00%	50.00%
Modalfa – Comércio e Serviços, S.A.	Maia	100.00%	100.00%	100.00%	100.00%
Modelo.Com - Vendas por Correspondência, S.A.	Maia	100.00%	100.00%	100.00%	100.00%
a) Modelo – Sociedade Gestora de Participações Sociais, S.A.	Maia	100.00%	100.00%	100.00%	100.00%
Modelo Continente Hipermercados, S.A.	Matosinhos	100.00%	100.00%	100.00%	100.00%
Modelo Continente – Operações de Retalho, S.G.P.S., S.A.	Matosinhos	100.00%	100.00%	100.00%	100.00%
Modelo Hiper Imobiliária, S.A.	Maia	100.00%	100.00%	100.00%	100.00%

		Percentage of		Percentage of
		Capital Held		Capital held
	Head	30.06.2007		31.12.2006
Company	Office	Direct	Total	Direct	Total
g) Modis - Distribuição Centralizada, S.A.	Matosinhos	100.00%	100.00%	100.00%	100.00%
d) NA - Equipamentos para o Lar, S.A.	Matosinhos	100.00%	100.00%	-	-
d) NA - Comércio de Artigos de Desporto, S.A.	Matosinhos	100.00%	100.00%	-	-
Nova Equador Internacional - Agencia de Viagens e Turismo, Lda	Lisbon	75.00%	67.50%	75.00%	67.50%
g) Ok Bazar - Comércio Geral, S.A.	Ermesinde	100.00%	100.00%	100.00%	100.00%
a) Parcium Imobiliária, S.A.	Porto	100.00%	100.00%	100.00%	100.00%
c) Pharmacontinente-Saúde e Higiene, S.A.	Matosinhos	100.00%	100.00%	-	-
Predicomercial – Promoção Imobiliária, S.A.	Maia	100.00%	100.00%	100.00%	100.00%
Peixes do Continente-Indústria e Distribuição de Peixes, S.A.	Matosinhos	100.00%	100.00%	100.00%	100.00%
Solaris Supermercados, S.A.	Matosinhos	100.00%	100.00%	100.00%	100.00%
Selifa - Sociedade de Emprendimentos Imobiliários de Fafe, S.A.	Maia	100.00%	100.00%	100.00%	100.00%
Sempre à Mão - Sociedade Imobiliária, S.A.	Matosinhos	100.00%	100.00%	100.00%	100.00%
Sesagest – Projectos e Gestão Imobiliária, S.A.	Porto	100.00%	100.00%	100.00%	100.00%
Sociloures – Sociedade Imobiliária, S.A.	Matosinhos	100.00%	100.00%	100.00%	100.00%
Socijofra – Sociedade Imobiliária, S.A.	Gondomar	100.00%	100.00%	100.00%	100.00%
Soflorin, B.V.	Amsterdam	100.00%	100.00%	100.00%	100.00%
Sonae Capital Brasil, Ltda	São Paulo (Brazil)	100.00%	100.00%	100.00%	100.00%
SM Empreendimentos Imobiliários, Ltda	Porto Alegre (Brazil)	100.00%	100.00%	100.00%	100.00%
Sonae Retalho España – Servicios Generales, S.A.	Madrid (Spain)	100.00%	100.00%	100.00%	100.00%
Sondis Imobiliária, S.A.	Maia	100.00%	100.00%	100.00%	100.00%
Sontária - Empreendimentos Imobiliários, S.A.	Maia	100.00%	100.00%	100.00%	100.00%
Sonvecap, B.V.	Amsterdam	100.00%	100.00%	100.00%	100.00%
Sport Zone – Comércio de Artigos de Desporto, S.A.	Matosinhos	100.00%	100.00%	100.00%	100.00%
g) SRE - Projectos e Consultadoria, S.A.	Maia	100.00%	100.00%	100.00%	100.00%
Star-Viagens e Turismo, S.A.	Lisbon	90.00%	90.00%	90.00%	90.00%
Tlantic Sistemas de Informação, Ltda	Porto Alegre (Brazil)	100.00%	100.00%	100.00%	100.00%
Todos os Dias – Comércio Ret. E Explor.Centros Comerciais, S.A.	Matosinhos	100.00%	100.00%	100.00%	100.00%
Worten – Equipamentos para o Lar, S.A.	Matosinhos	100.00%	100.00%	100.00%	100.00%

These subsidiaries were included in the consolidated financial statements by the full consolidation method.

a) Subsidiaries incorporated by merger in Modelo Continente, SGPS, SA on 1 January 2007.
b) Subsidiary liquidated on 30 March 2007.
c) Subsidiary created on 9 February 2007.
d) Subsidiaries created on 29 March 2007.
e) Subsidiary purchased on 11 April 2007.
f) Subsidiary disposed on 31 May 2007.
g) Subsidiaries incorporated by merger in Modelo Continente Hipermercados, S.A. on 1 April 2007.

5. INVESTMENTS IN ASSOCIATED COMPANIES

The associated companies, their head offices and the percentage of the share capital held as at 30 June 2007 and 31 December 2006 are as follows:

		Percentage of Capital held		Percentage of Capital held		Carrying amount
	Head	30.06.2007		31.12.2006
Company	Office	Direct	Total	Direct	Total	30.06.2007	31.12.2006
Fundo de Investimento Imobiliário Fechado Imosede	Maia	33.81%	33.81%	33.81%	33.81%	13,349,090	13,734,183
Mundo Vip - Operadores Turísticos, S.A. Sonaegest - Soc. Gestora de Fundos de	Lisbon	33.33%	33.33%	33.33%	33.33%	2,693,244	3,023,478
Investimento,S.A. Sempre a Postos - Produtos Alimentares e	Maia	40.00%	40.00%	40.00%	40.00%	603,318	558,894
Utilidades, S.A.	Lisbon	25.00%	25.00%	25.00%	25.00%	709,774	506,796
						17,355,426	17,823,351

Associated companies were included in the consolidation under the equity method.

6. CHANGES IN CONSOLIDATION PERIMETER

The main purchase and disposal of the companies over the six month period ending on 30 June 2007 was as follows:

Purchases

		Percentage of Capital held		Percentage of Capital held
	Head	30.06.2007		31.12.2006
Company	Office	Direct	Total	Direct	Total
Iginha-Sociedade Imobiliária, S.A	Matosinhos	100.00%	100.00%

The purchase referred to above had the following impact upon the consolidated financial statements as at 30 June 2007:

	Book	Total
	Value	Value
Net assets purchased
Tangibles and intangibles
assets (note 7)	13,827,627	13,827,627
Other current assets	1,711,571	1,711,571
Cash and cash equivalents	10,552	10,552
Deferred taxes	8,808	8,808
Loans	(6,821,755)	(6,821,755)
Other liabilities	(8,649,756)	(8,649,756)
	87,047	87,047
Goodwill (Note 8)	21,953	21,953
Purchase price	109,000	109,000
Payments made	6,930,755	6,930,755
Financial Debt on the acquisition date	(6,821,755)	(6,821,755)
Future payments to be made		-
	109,000	109,000

Net cash-flow outcoming from purchase
Payments made	6,930,755	6,930,755
Cash and cash equivalents purchased	(10,552)	(10,552)
	6,920,203	6,920,203

Considering the goodwill generated in this purchase, as well as the operations of the purchased company, no imputation of fair value during the purchase process was made.

The impact of the purchase on the consolidated income statement is made up as follows:

Operating expenses		259,595
Operating costs		(76,962)
Financial profit/(loss)		(196,916)
	Net profit/(loss) before tax	(14,283)
Income tax		214
	Net profit/(loss) for the period	(14,069)

The participation above mentioned was purchased to a Sonae, SGPS, S.A. Group's subsidiary.

Disposals

			Percentage of		Percentage of
			Capital held		Capital held
		Head	Disposal date		31.12.2006
Company		Office	Direct	Total	Direct	Total

	Imoponte-Sociedade Imobiliária, S.A.	Matosinhos	100.00%	100.00%	100.00%	100.00%

Net assets of this subsidiary as at the date of disposal are as follows:

	Disposal date	31-12-2006
Net assets disposed of
Tangible assets	9,928,908	9,700,630
Deferred tax assets	910,761	871,296
Other current assets	150,898	150,544
Cash and cash equivalents	3,683	421
Other non-current liabilities	(4,316,000)	(11,837,000)
Deferred tax liabilities	(12)	(16)
Other current liabilities	(10,396)	(920,356)
	6,667,842	(2,034,481)
Disposal loss	(842,841)
Price of disposal	5,825,001
Net cash-flow outcoming from disposal
Cash received	10,141,001
Cash and cash equivalents disposed of	(3,683)
	10,137,318
Financial Debt on the disposal date	(4,316,000)
Transaction value	5,821,318

The financial debt above mentioned is related to the value of the loans granted by the shareholder of the subsidiary disposed and are included in the cash received of 10,141,001 Euro.

The impact of this disposal on the income statement in the period ending as of 30 June 2007 can be detailed as follow:

	Disposal of a subsidiary 2007
Services rendered	57
Other operating expenses	102
Financial profit/(loss)	(265,584)
Profit/(loss) before income tax	(265,425)
Income tax	39,470
Profit/(loss) after income tax	(225,955)
	(225,955)

7. TANGIBLE AND INTANGIBLE ASSETS

During the six month period ending 30 June 2007, movements in tangible and intangible assets as well as depreciations and accumulated impairment losses, were made up as follows:

Tangible assets - June 2007

Gross assets: Opening balance 1,027,788,651 479,043,575 15,346,401 96,146,283 8,319,375 80,429 2,006,122 29,402,940 17,147,599 Changes in consolidation Perimeter - Purchases 13,005,970 698,298 - - 287,226 Changes in consolidation Perimeter - Disposals (9,928,909) - - Capital expenditure 2,938,523 437,007 23,864 937,316 8,621 - 65,035,932 12,608,883 Disposals c) (20,919,134) (3,441,193) (254,773) (647,605) (26,882) (13,862) (279,443) (23,260) - Foreign exchange rate effect 457,737 79,948 4,062 42,467 - - 13,065 - Transfers 17,290,709 31,900,274 298,534 1,726,501 1,411,811 - 2,384 (44,747,159) (10,244,996) Closing balance 1,030,633,547 508,717,909 15,418,088 98,204,962 9,712,925 66,567 1,729,063 49,968,744 19,511,486 Accumulated depreciation, amortization and impairment losses Opening balance 128,715,051 224,445,608 12,011,068 58,138,134 4,544,535 80,429 1,824,070 - - Changes in consolidation Perimeter - Purchases 126,232 37,635 - - -	1,675,281,375 13,991,494 (9,928,909) 81,990,146 (25,606,152) 597,279
	(2,361,942)
	1,733,963,291
Depreciations for the period 8,628,872 Disposals (2,366,778) (2,521,357) (237,580) (545,904) (25,102) (13,862) (279,429) - - Foreign exchange rate effect 12,735 16,039 1,013 8,966 - - - Transfers (3,042) (435,216) (12,416) (355,963) (2,968) - (3,535) - -	429,758,895 163,867 22,474,305 552,584 5,063,879 822,157 - 23,447 - - 37,565,244 (5,990,012) 38,753 (813,140)
Closing balance 135,113,070 244,017,014 12,314,669 62,309,112 5,338,622 66,567 1,564,553 - -	460,723,607
Carrying amount 895,520,477 264,700,895 3,103,419 35,895,850 4,374,303 - 164,510 49,968,744 19,511,486	1,273,239,684

Intangible assets - June 2007

	Development costs	Industrial property and other rights	Software	Premiums paid for property occupation rights	Other Intangible assets	Intangible assets in progress a)	Advances on account of intangible assets b)	Total
Gross assets:
Opening balance	464,840	83,989,039	98,303,747	13,908,707	-	13,319,370	275,000	210,260,703
Capital expenditure		387,715	42,757			7,455,940		7,886,412
Disposals						(11,055)		(11,055)
Foreign exchange rate effect			10,874					10,874
Transfers	3,450	1,128,694	2,368,272			(3,962,808)	(40,000)	(502,392)
Closing balance	468,290	85,505,448	100,725,650	13,908,707	-	16,801,447	235,000	217,644,542
Accumulated depreciation, amortization and impairment losses
Opening balance	148,308	3,329,177	44,882,011	12,736,678	-	-	-	61,096,174
Depreciations for the period Disposals	46,714	787,272	4,174,832	158,371				5,167,189 -
Foreign exchange rate effect			3,214					3,214
Transfers		(13,711)	(255,690)					(269,401)
Closing balance	195,022	4,102,738	48,804,367	12,895,049	-	-	-	65,997,176
Carrying amount	273,268	81,402,710	51,921,283	1,013,658	-	16,801,447	235,000	151,647,366

a) The most significant amounts included in the captions "Tangible and intangible assets in progress" correspond to the following projects:

	30.06.2007	31.12.2006
Remodelling and expansion of stores in Portugal Instalation licenses Software projects	47,661,374 4,065,548 11,470,751	27,214,918 3,352,407 8,752,631
	63,197,673	39,319,956

b) The most significant amounts included under the caption "Advances on account of tangible assets" refer mainly to projects of Modelo and Continente´s stores for which advance payments were made.
c) The most significant amounts recorded under the caption "Land and Buildings" concerning to disposals, refer to the disposal of commercial galleries in Albufeira and Portimão. The carrying amount of these assets amounted to 18,550,000 Euro and a consolidated gain for the Group amounting 13 million Euro. This gain is included in the caption "Other operating income".

8. GOODWILL

Over the six months period ending 30 June 2007 and for the year ended 31 December 2006, movements in goodwill, as well as in the corresponding impairment losses, were as follows:

	30.06.2007	31.12.2006
Gross value
Opening balance	63,980,187	47,164,598
New companies in the consolidation perimeter (note 6)	21,953	9,337,327
Transfers	62,855	7,478,262
Decreases	(2,463,488)
Closing balance	61,601,507	63,980,187
Acumulated Impairment Losses (note 19):
Opening balance	2,838,583	-
Increases	62,855	2,838,583
Closing balance	2,901,438	2,838,583
Net value	58,700,069	61,141,604

Goodwill is not depreciated. Impairment tests on the Goodwill are performed on an annual basis.

9. INVESTMENTS

As at 30 June 2007, this caption is made up as follows:

	30.06.2007		30.06.2006
	Non Current	Current	Non Current	Current
Investments in associated companies
Opening balance at 1 January	17,823,351	-	8,080,761	-
Purchases over the six month period	-	-	2,858,899	-
Transfers (Note 8)	-	-	(7,478,262)	-
Equity method effect	(467,925)	-	(128,827)	-
Closing balance at 30 June (Note 5)	17,355,426	-	3,332,571	-
Other financial investments
Opening balance at 1 January	33,804,781	33,211,904	54,278,095	-
Purchases over the six month period	-	181,185	11,815,368	10,500,000
Disposals over the six month period	(523,913)	(342,290)	(11,470,030)	-
Increase/(decrease) in fair value	594,687	644,851	-	207,286
Foreign exchange rate effect	-	-	(10,690)	(146,498)
Closing balance at 30 June	33,875,555	33,695,650	54,612,743	10,560,788
Accumulated impairment losses (Note 19)	(26,316)	-	(496,728)	-
	33,849,239	33,695,650	54,116,015	10,560,788
Derivative financial instruments
Opening balance at 1 January	-	49,458	-	60,475
Purchases over the six month period	-	9,773	-	6,814
Disposals over the six month period	-	(49,458)	-	(60,475)
Increase/(decrease) in fair value	-	-	-	20,420
Closing balance at 30 June	-	9,773	-	27,234
Advances on financial investments
Opening balance at 1 January	900,000	-	-	-
Purchases over the six month period	660,000	-	660,000	-
Closing balance at 30 June	1,560,000	-	660,000	-
	52,764,665	33,705,423	58,108,586	10,588,022

The detail of the other financial investments is made up as follow:

a) 780,497 Euro (1,278,095 Euro on 30 June 2006), essentially refers to shares held in companies. The investment in non-listed companies and which fair value was not estimated due to the fact that it could not be measured reliably are recorded at acquisition cost less impairment losses. The investments held in publicly traded companies are recorded at fair value.
b) 66,190,192 Euro (63,500,000 Euro on 30 June 2006), relate to deposited amounts on an escrow account and that were invested in Participation Units in a monetary investment fund of superior rating. Of the total amount invested, 33,095,056 Euro are classified as current asset (10,500,000 Euro on 30 June 2006) and 33,095,056 Euro as non-current asset (53,000,000 Euro on 30 June 2006) in accordance with the maturity of the guarantee rendered and provisions that have been recorded (Note 19).

10. OTHER NON-CURRENT ASSETS

As of 30 June 2007 and 31 December 2006, other non current assets are detailed as follows:

30.06.2007	31.12.2006

1,012,374	1,006,538
789,933	819,293
1,802,307	1,825,831

The amount recorded under "Trade accounts receivable and other debtors" mainly refers to legal deposits made by a Brazilian subsidiary.

11. OTHER CURRENT ASSETS

As at 30 June 2007 and 31 December 2006 other current assets are made up as follows:

	30.06.2007	31.12.2006
Trade accounts receivable	43,738,880	41,467,482
Taxes and contributions receivable	56,625,648	58,282,812
Other debtors	94,978,387	82,008,773
Advances to suppliers of fixed assets	2,224,747	333,380
Other current assets	20,097,140	12,315,265
	217,664,802	194,407,712
Accumulated impairment losses (Note 19)	(17,364,375)	(17,630,329)
	200,300,427	176,777,383

The caption "Other debtors" includes receivables related to: (i) the sale of the Brazilian subsidiaries amounting to 4,425,464 Euro (Note 18 - equal amount as at 31 December 2006); (ii) debtor balances of suppliers in a total amount of 41,611,690 Euro (27,974,728 Euro in 31 December 2006); (iii) the amount of 14,576,053 euros (equal amount as at 31 December 2006) described as Special Regime for the Settlement of Debts to the Tax Authorities and Social Security, refers to taxes paid subject to appeal, the outcome of which the Board of Directors believes will be favourable to the Company; (iv) recoverable VAT, that was originated by property transactions, in a total amount of 13,516,942 euros (15,533,273 euros as at 31 de December 2006).

The caption "Other current assets" is essentially composed by receivable interests amounting to 1,297,402 Euro (444,314 Euro on 31 December 2006); an amount of 7,790,359 Euro of discounts receivable from suppliers (3,341,600 Euro on 31 December 2006); receivable commissions amounting to 571,655 Euro (701,512 Euro on 31 December 2006); 3,166,562 Euro of rents paid in advance (2,922,485 Euro on 31 de December 2006) and insurance paid in advance amounting to 2,677,440 Euro (969,948 Euro in 31 December 2006).

12. DEFERRED TAX

As of 30 June 2007 and 31 December 2006 deferred Tax Assets and Liabilities, according to the temporary differences that generated them, are made up as follows:

	Deferred tax assets		Deferred tax liabilities
	30.06.2007	31.12.2006	30.06.2007	31.12.2006
Diference between fair value and purchase cost	-	-	1,588,037	1,588,037
Harmonization adjustments (amortizations and depreciations)	104,646	181,106	28,002,220	27,903,609
Provisions and impairment losses not accepted for tax purposes	2,627,114	4,270,132	-	-
Write off of fixed assets	7,181,619	9,340,215	-	-
Write off of deferred costs	14,905	20,165	35,053	43,932
Valuation of financial derivatives	17,919	30,751	2,095	13,106
Reinvestment of capital gains	-	-	3,473,356	3,512,705
Revaluation of tangible fixed assets	-	-	2,263,418	2,328,427
Exchange rate differences not included for tax purposes	123,268		-	1,595,373
Tax losses carried forward	9,513,586	9,570,879
	19,583,057	23,413,248	35,364,179	36,985,189

As at 30 June 2007 and 31 December 2006, the carried forward tax losses in accordance with tax returns and income tax estimates of the group companies that recorded the corresponding deferred tax assets, (considering an exchange rate at that dates) had the following expiration dates:

		30-06-2007			31-12-2006
	Tax	Deferred tax	Expiration	Tax	Deferred tax	Expiration
	losses	asset	date	losses	asset	date
With expiration date
Originated in 2000			2006	16,638	4,160	2006
Originated in 2001	1,572,576	393,145	2007	2,509,559	627,389	2007
Originated in 2002	12,872,509	3,218,127	2008	12,905,938	3,226,484	2008
Originated in 2003	10,049,635	2,512,408	2009	10,304,696	2,576,173	2009
Originated in 2004	3,660,041	915,011	2010	3,172,510	793,128	2010
Originated in 2005	7,405,973	1,851,494	2011	7,435,642	1,858,911	2011
Originated in 2006	386,230	96,557	2012	362,870	90,718	2012
Originated in 2007	778,268	194,567
	36,725,232	9,181,309		36,707,853	9,176,963
Without expiration date	977,293	332,277		1,158,580	393,916
	37,702,525	9,513,586		37,866,433	9,570,879

The deferred tax assets arising from tax losses carried forward were evaluated, and were only recorded if it was probable that taxable profits would occur in the future which may be offset against available tax losses or against deductible temporary differences. This evaluation was based on Sonae Distribuição's companies business plans, periodically reviewed and updated, and on available and identified tax planning opportunities.

As of 30 June 2007 there are tax losses carried forward amounting to 164,101,320 Euro (166,813,413 Euro on 31 December 2006), for which no deferred tax assets were recognized for prudential reasons.

	30-06-2007			31-12-2006
	Tax	Deferred tax	Expiration	Tax	Deferred tax	Expiration
	losses	credit	date	losses	credit	date
With expiration date
Originated in 2001	3,661,629	915,408	2007	3,661,629	915,408	2007
Originated in 2002	3,871,960	967,991	2008	3,871,960	967,991	2008
Originated in 2003	1,675,290	418,823	2009	1,675,290	418,823	2009
Originated in 2004	1,521,758	380,440	2010	1,521,758	380,440	2010
Originated in 2005	143,365,889	35,841,472	2011	146,488,121	36,622,030	2011
Originated in 2006	340,626	85,156	2012	340,626	85,156	2012
Originated in 2007			2013
	154,437,152	38,609,290		157,559,384	39,389,848
With expiration date different
from those mencioned above	9,271,269	3,013,162		9,250,041	3,237,514
Without expiration date	392,899	133,586		3,718	1,264
	164,101,320	41,756,038		166,813,143	42,628,626

13. CASH AND CASH EQUIVALENTS

As of 30 June 2007 and 31 December 2006 cash and cash equivalents can be detailed as follows:

	30.06.2007	31.12.2006

Cash at hand	3,599,326	3,396,197
Bank deposits	281,911,297	355,570,923
Treasury applications	521,890	448,028
Cash and cash equivalents on balance sheet	286,032,513	359,415,148
Bank overdrafts (Note 15)	(577,925)	(1,724,154)
Cash and cash equivalents on cash flows' statement	285,454,588	357,690,994

Bank overdrafts are recorded in the balance sheet under Current loans.

14. SHARE CAPITAL

As of 30 June 2007, the share capital, which is fully subscribed and paid for, is made up by 1,100,000,000 ordinary shares which do not hold right to any fixed income, with a nominal value of 1 Euro each.

As of 30 June 2007, the following entities held the share capital of the company:

Entity	%
Sonae, SGPS, S.A.	74.98
Sonae Investiments, BV (wholly owned by Sonae SGPS, S.A.)	15.93
Own Shares	9.09

As of 30 June 2007, Efanor Investimentos, SGPS, S.A. and its subsidiaries held 52.94% of the shares of Sonae, SGPS, S.A..

15. LOANS

As at 30 June 2007 and 31 December 2006, loans are made up as follows:ⁱ

	30.06.2007					31.12.2006
	Book Value		Nominal value		Book Value		Nominal value
	Current	Non Current	Current	Non Current	Current	Non Current	Current	Non Current
Bank loans	101,400,000	-	101,400,000	-	161,815,664	-	161,815,664	-
Bond loans	199,659,467	593,285,061	200,075,000	596,925,000	-	593,166,278	-	597,000,000
Other loans	15,649	304,177	15,649	304,177	12,285	313,779	12,285	313,779
Bank overdraft (Note 13)	577,925	-	577,925	-	1,724,154	-	1,724,154	-
	301,653,041	593,589,238	302,068,574	597,229,177	163,552,103	593,480,057	163,552,103	597,313,779
Derivatives	71,996	-	-	-	116,043	-	-	-
Obligations under finance leases	3,970,875	6,720,106	3,970,875	6,720,106	4,195,233	8,051,112	4,195,233	8,051,112
	305,695,912	600,309,344	306,039,449	603,949,283	167,863,379	601,531,169	167,747,336	605,364,891

The repayment schedule of nominal value of borrowing (including bank loans and finance leases) may be detailed as follows:

	30.06.2007	31.12.2006
2007	304,127,535	167,747,336
2008	3,555,988	3,253,851
2009	102,904,110	102,610,174
2010	67,202,246	267,302,013
2011	82,029,992	82,029,992
2012	350,042,467	150,042,467
After 2012	126,394	126,394
	909,988,732	773,112,227

Bond Loans

As of 30 June 2007, bond loans are as follows:

82,000,000
100,000,000
265,000,000
150,000,000
200,000,000

MODELO CONTINENTE - 2003 BONDS

1,640,000 bonds – Nominal Value: 50 Euro.

Maximum term: eight years

Annual interest rate: the interest rate, which is variable, is indexed to the EURIBOR 6 month rate on the second working day preceding the interest period, with a spread of 0.75% per annum.

Interest Payment: half yearly in arrears, on 15 April and 15 October of each year.

Redemption: at par, in one payment on 15 October 2011, the maturity date of the loan. Early redemption is not possible, either by initiative of the issuer or the bondholders.

MODELO CONTINENTE - 2004 BONDS

10,000,000 bonds – Nominal Value: 10 Euro. Maximum term: five years.

Annual interest rate: the interest rate, which is variable, is indexed to the EURIBOR 6 month rate on the second working day preceding the interest period, with a spread of 1.15% per annum.

Interest Payment: half yearly in arrears, on 18 March and 18 September of each year.

Redemption: at par, in one payment on 18 March 2009, the maturity date of the loan. Early redemption is not possible, either by initiative of the issuer or the bondholders

MODELO CONTINENTE - 2005/2010 BONDS

265,000 bonds – Nominal Value: 1,000 Euro.

Maximum term: five years.

Annual interest rate: the interest rate, which is variable, is indexed to the EURIBOR 6 month rate on the second working day preceding the interest period, with a spread of 0.70% per annum.

Interest Payment: half yearly in arrears, on 3 February and 3 August of each year.

Redemption: at par, in one payment on 3 August 2010, the maturity date of the loan, except if an early redemption occurs.

Early redemption (Call-Option): early redemption is possible by initiative of the issuer, either totally or partially (by reducing the nominal value of the bonds), on the 2nd, 3rd or 4th year of maturity. In this situation the issuer is obliged to pay a prize of 0.125% over de reimbursed value.

On the 3rd August 2007, the Company partially reimbursed the bonds, according to the issuing conditions. The amount reimbursed per bond was 755 Euro plus a premium of 0.94375 Euro.

After the reimbursement, the loan will be reduced to 64,925,000 Euro (265,000 bonds with a 245 Euro nominal value).

MODELO CONTINENTE - 2005/2012 BONDS

15,000,000 bonds – Nominal Value: 10 Euro.

Maximum term: seven years.

Annual interest rate: the interest rate, which is variable, is indexed to the EURIBOR 6 month rate on the second working day preceding the interest period, with a spread of 0.85% per annum.

Interest Payment: half yearly in arrears, on 2 February and 2 August of each year.

Redemption: at par, in one payment on 2 August 2012 the payment date of the 14th coupon, except if an early redemption occurs.

Early redemption (call option): early redemption is possible by initiative of the issuer, either totally or partially (by reducing the nominal value of the bonds), on the reimbursed dates of 10th, 11th, 12th and 13th coupon, without the obligation of paying any prize.

MODELO CONTINENTE - 2007/2012 BONDS

4,000 bonds – Nominal Value: 50,000 Euro.

Maximum term: five years.

Annual interest rate: the interest rate, which is variable, is indexed to the EURIBOR 6 month rate on the second working day preceding the interest period, with a spread of 0.5% p.a.

Interest Payment: half yearly in arrears on 30 April and 30 October of each year.

Redemption: at par, in one payment on 30 April 2012 the payment date of the 10th coupon. Early redemption is not possible, neither by initiative nor of the issuer or the bondholders

Other loans – non currents

At 30 June 2007 this caption relates to repayable subsidies granted by IAPMEI under the Measure of Support to the Energy Potential and Rationalization (MAPE). These subsidies do not bear interests and have been attributed for a 12 year period, with a grace period of 3 years redemption after contribution. The subsidies will be redempted in half-yearly instalments, occurring the first six months after the grace period. At this date, 15,649 Euro are classified as "Other loans – current".

Bank loans – current

This caption includes the issue of short term commercial paper issued in the amount of 100,000,000 Euro (160,000,000 Euro on 31 December 2006) which bears interests at usual market rates, and also a bank loan reimbursable in 2007 in the amount of 1,400,000 Euro (equal amount on 31 December 2006).

16. OTHER NON CURRENT LIABILITIES

As at 30 June 2007 and 31 December 2006 the caption "Other non-current liabilities" was made up as follows:

	30.06.2007	31.12.2006
Participating companies (Note 21)	10,000,000	10,000,000
Other non current trade accounts payable	829,053	767,334
Share-based payments (Note 17)	1,607,361	2,234,466
	12,436,414	13,001,800

As at 30 June 2007 and 31 December 2006, the caption "Other non-current liabilities" refers mainly to the estimated amounts to fulfil the legal and tax obligations of Brazilian subsidiaries which were considered appropriate to face future losses on lawsuits and for which legal deposits exist, which are recorded under the captions "Other non-current trade accounts receivables" (Note 10).

The amount payable to participating companies refers to a shareholders' loan granted by a minority shareholder of a subsidiary that bears interest at market rate. The fair value of this loan is similar to its book value.

17. SHARE BASED PAYMENT PLANS

In 2007 and in previous years, Sonae Distribuição Group granted deferred performance bonuses to its directors and eligible employees. These are based on shares to be acquired at nil cost, three years after they were attributed to the employee. The purchase can be exercised during the period commencing on the third anniversary of the grant date and the end of that year. The company has the choice to settle its responsibilities in cash rather than through shares. The option can only be exercised if the employee still works for the Group at the due date.

Liabilities arising from deferred performance bonuses at 30 June 2007 and 31 December 2006 are made up as follows:

	Years of	Expiry	Number of	Fair value
	grant	date	participants	30.06.2007	31.12.2006
Shares
	2004	2007	40	-	2,970,651
	2005	2008	39	3,420,114	2,454,762
	2006	2009	42	2,504,032	1,793,878
	2007	2010	41	2,132,070
Total				8,056,216	7,219,291

The amounts recorded as at 30 June 2007 and 31 December 2006 related to the responsabilities incurred from the date in which each plan was granted to the period then ended can be presented as follows:

	30.06.2007	31.12.2006
Recorded under Other non current liabilities (note 16)	1,607,361	2,234,466
Recorded under Other current liabilities (note 18)	2,850,095	2,970,651
Recorded under Reserves in Equity	(1,868,494)	(1,093,837)
Amounts recorded under Personnel Costs	2,588,962	4,111,280

The action plans costs are recognized along the period between the attribution date and the vesting date in Staff Costs.

18. OTHER CURRENT LIABILITIES

As of 30 June 2007 and 31 December 2006 the caption "Other current liabilities" was made up as follows:

	30.06.2007	31.12.2006
Suppliers	548,685,301	637,520,855
Participating and participated companies	85,958	319,071
a) Other accounts payable	39,883,210	33,270,702
Fixed Assets' supliers	32,257,294	40,549,692
Taxes and contributions payable	22,411,215	44,717,120
Accrued costs	103,172,840	84,411,503
Deferred income	1,214,630	1,928,196
Share-based payments (Note 17)	2,850,095	2,970,651
	750,560,543	845,687,790

a) The caption "Other accounts payable" includes a put option over the shares of a subsidiary disposed of in 2005, conceded to its former shareholders amounting 37,069,900 BRL (the same BRL amount as of 31 December 2006), with the correspondent value in Euro at 30 June 2007 of 14,244,480 Euro (approximately 13 millions Euro as of 31 December 2006). In the event of the exercise of this put option the Group will resell the acquired shares by 4,425,464 Euro (the same Euro amount as of 31 December 2006), as defined in the sale agreement of that subsidiary (Note 11).

This caption also includes 14,293,894 Euro (7,331,133 Euro at 31 December 2006) related to means of payment withheld by clients, namely vouchers, gift cards and discount coupons.

19. PROVISIONS AND ACCUMULATED IMPAIRMENT LOSSES

Movements in provisions and impairment losses during the period ended in 30 June 2007 were as follows:

	Opening			Closing
Caption	Balance	Increases a)	Decreases	Balance
Accumulated impairment losses on Investments (Note 9)	474,728	-	(448,412)	26,316
Accumulated impairment losses on Goodwill (Note 8)	2,838,583	62,855	-	2,901,438
Accumulated impairment losses on Receivables (Note 11)	11,167,140	158,456	(302,926)	11,022,670
Accumulated impairment on other Debtors (Note 11)	6,463,190	23,074	(144,559)	6,341,705
Accumulated impairment losses - Inventory	11,542,472	339,243	(487,010)	11,394,705
Provisions	22,117,496	1,742,107	(603,878)	23,255,725
	54,603,609	2,325,735	(1,986,785)	54,942,559

a) Increases include 1,742,107 Euro, related to the effect of changes in the foreign exchange rate in opening balances.

Impairment losses are deducted from the corresponding asset.

The caption Provisions includes 23,116,622 Euro (21,978,393 Euro on 31 December 2006) to face future outflows in consequence of the disposal of Sonae Distribuição Brasil, S.A., occurred in 2005. This provision is being used as obligations arise.

20. CONTINGENT ASSETS AND LIABILITIES

	30.06.2007	31.12.2006
Guarantees rendered:
related to tax claims awaiting outcome	84,476,624 a)	50,887,200
related to local and municipal claims awaiting outcome	9,644,557	8,568,362
Others	26,338,667 b)	16,099,991

a) Includes guarantees amounting to 28,964,178 Euro (29,550,873 Euro on 31 December 2006) and 27,232,473 Euro (18,110,885 Euro on 31 December 2006), related to corporate income tax assessments and to VAT processes respectively.
b) Includes guarantees amounting 15,085,621 Euro related to VAT reimbursement requests.

During the period ended at 30 June 2007, the subsidiary Sonae Capital Brasil, Ltda, rendered a guarantee in the amount of 25 millions Euro (65,570,000 BRL), related to a tax claim that is being judged in a Brazilian tax court concerning to corporate income tax.

No provision was recorded in order to face possible risks arising from the guarantees rendered, as it is the Board of Directors understanding that from the referred guarantees no liabilities will arise to the Group.

21. RELATED PARTIES

As of 30 June 2007 and 31 December 2006 balances and transactions with related parties were made up as follows:

Purchases and services
	Sales and services rendered		attained			Interest income	Interest expense
Transactions	30.06.2007	30.06.2006	30.06.2007	30.06.2006	30.06.2007	30.06.2006	30.06.2007	30.06.2006
Parent company	181,102	151,724	233,430	229,305	638,672	987,890
Associated companies	279,773	132,564	1,746,312	162,537	165,202
Participated companies	23,364,267	20,916,097
Participating companies	124,548		38,101				202,619	173,045
Other related parties	8,295,539	9,056,802	46,012,940	44,562,437	155,711		41,969	12,872
	32,245,229	30,257,187	48,030,783	44,954,279	959,585	987,890	244,588	185,917
	Purchase of assets		Disposal of assets
Transactions of fixed assets	30.06.2007	30.06.2006	30.06.2007	30.06.2006
Parent Company		75,000,000	523,913
Associated companies			18,760
Other related parties	30,412,796	31,294,304	37,043,731	33,714
	30,412,796	106,294,304	37,586,404	33,714
							Loans
		Accounts receivable		Accounts payable		Payable	Receivable
Balance	30.06.2007	31.12.2006	30.06.2007	31.12.2006	30.06.2007	31.12.2006	30.06.2007	31.12.2006
Parent company	680,358	59,854	137,439	203,095
Associated companies	6,887,752	683,776	1,043,035	391,909			1,000,000	1,000,000
Participated companies	12,965,152	12,804,052		155,357
Participating companies (Note 16)	30,466		226,154		10,000,000	10,000,000	12,374	6,358
Other related parties1	7,263,102	10,526,303	23,441,567	19,711,625
	27,826,830	24,073,985	24,848,195	20,461,986	10,000,000	10,000,000	1,012,374	1,006,358

1) The Subsidiaries or companys under joint control of Efanor SGPS, SGPS that are not integrated in the Group Sonae Distribuição, SGPS, SA are classified as "Other related parties".

The amount recorded under Loans payable to participating companies refers to loans granted by shareholders of subsidiaries which bear interests at market rates.

22. INCOME TAX

Income tax for the six month period ended 30 June of 2007 and 2006 is made up as follows:

	30.06.2007	30.06.2006
Current tax	4,244,943	5,173,052
Deferred tax	(1,037,741)	(166,809)
	3,207,202	5,006,243

23. EARNINGS PER SHARE

Earnings per share for the period were calculated taking into consideration the following amounts:

	2nd.Quarter.2007	30.06.2007	2nd.Quarter.2006	30.06.2006
Net profit
Net profit taken into consideration to calculate diluted earnings per share (Net profit for the period)	34,398,261	49,076,515	22,225,981	42,794,315
Net profit taken into consideration to calculate diluted earnings per share	34,398,261	49,076,515	22,225,981	42,794,315
Number of share
Weighted average number of shares used to calculated basic Earnings per share	1,000,000,000	1,000,000,000	1,100,000,000	1,100,000,000
Weighted average number of shares used to calculated the diluted earnings per share	1,000,000,000	1,000,000,000	1,100,000,000	1,100,000,000
Earning per share (basic and diluted)	0.03	0.05	0.02	0.04

24. DIVIDENDS

In the Annual General Meeting held on 2 May of 2007 was approved the distribution of dividends amounting to 75,000,000 Euro.

25. SEGMENT INFORMATION

Geographical segments that have been identified in the six months period ended in 30 June 2007 and 2006 were:

Portugal
Brazil

The contribution of the main segments to the consolidated Income Statement for the six months ended 30 June 2007 and 2006 can be detailed as follows:

		Portugal Brazil (a) Consolidated
	30.06.2007	30.06.2006	30.06.2007	30.06.2006	30.06.2007	30.06.2006
Turnover	1,495,142,148	1,360,212,200	-	-	1,495,142,148	1,360,212,200
Operating Cash-Flow (EBITDA)	113,619,320	85,026,589	-	-	113,619,320	85,026,589
Operating profit (EBIT)	71,152,842	45,515,007	-	-	71,152,842	45,515,007
FTE´s	22,134	20,676	-	-	22,134	20,676
Number of stores	517	430	-	-	517	430
Sales area [.000m2]	565	511	-	-	565	511
	Portugal		Brazil (a)		Consolidated
	30.06.2007	31.12.2006	30.06.2007	31.12.2006	30.06.2007	31.12.2006
Gross fixed assets	2,003,986,790	1,940,833,372	6,321,112	5,850,310	2,010,307,902	1,946,683,682
Other assets and liabilities	(183,160,227)	(341,724,240)	(36,000,417)	(33,399,879)	(219,160,644)	(375,124,119)
Depreciations and amortizations Non current investments	(526,720,783) 19,669,609	(490,855,069) 19,553,034	- 33,095,056	- 32,500,370	(526,720,783) 52,764,665	(490,855,069) 52,053,404
Net employed capital	1,313,775,389	1,127,807,097	3,415,751	4,950,801	1,317,191,140	1,132,757,898

a) Remaining assets and operations of the operations discontinued in 2005.

26. SUBSEQUENT EVENTS

On the 3rd August 2007, the Company partially reimbursed bonds denominated Modelo Continente 2005/2010 represented by 265,000 bonds at a nominal value of 1,000 Euro each, according to the issuing conditions. The amount reimbursed per bond was 755 Euro plus a premium of 0.94375 Euro.

On the 27th July 2007, the Company has reached an agreement with the Carrefour Group on the acquisition of 99.8648% of the share capital of Carrefour (Portugal) – Sociedade de Exploração de Centros Comerciais, S.A., for a total enterprise value of 662 million Euro.

This transaction is still subject to the approval of the Portuguese Competition Authority.

27. APPROVAL OF THE FINANCIAL STATEMENTS

The accompanying consolidated financial statements were approved by the Board of Directors and authorized for issue on 22 August 2007.

28. NOTE ADDED TO TRANSLATION

These consolidated financial statements are a translation of financial statements originally issued in Portuguese in accordance with International Financial Reporting Standards. In the event of discrepancies, the Portuguese language version prevails.

Matosinhos, 22 August 2007

INDIVIDUAL FINANCIAL STATEMENTS

30 JUNE 2007

COMPANY BALANCE SHEETS AS 30 JUNE 2007 AND DECEMBER 2006

(Amounts expressed in Euro)

(Translation of financial statements originally issued in Portuguese - Note 21)

		IFRS
ASSETS	Notes	30-06-2007	31-12-2006
NON CURRENT ASSETS
Tangible and intangible assets		524,064	705,711
Investments	5	1,888,535,250	1,350,118,831
Deferred tax assets		994	1,649
Other non-current assets	6	673,046,129	457,114,129
Total non-current assets		2,562,106,437	1,807,940,320

CURRENT ASSETS
Other current assets	7	580,704,441	935,777,090
Cash and cash equivalents	8	110,053,827	50,033,177
Total current assets		690,758,268	985,810,267

TOTAL ASSETS		3,252,864,705	2,793,750,587


EQUITY AND LIABILITIES
EQUITY
Share Capital	9	1,100,000,000	1,100,000,000
Own Shares	10	-	(205,000,000)
Reserves and retained earnings	11	919,976,791	995,736,702
Net profit / (loss) for the period		56,760,113	80,335,955
TOTAL EQUITY		2,076,736,904	1,971,072,657

LIABILITIES
NON CURRENT LIABILITIES
Loans	12	593,285,061	593,166,278
Deferred tax liabilities		77,485	115,282
Total non-current liabilities		593,362,546	593,281,560
CURRENT LIABILITIES
Loans	12	301,074,426	161,402,594
Other current liabilities	13	281,690,829	67,993,776
Total current liabilities		582,765,255	229,396,370

TOTAL LIABILITIES		1,176,127,801	822,677,930

TOTAL EQUITY AND LIABILITIES		3,252,864,705	2,793,750,587

The accompanying notes are part of these financial statements

COMPANY INCOME STATEMENTS BY NATURE

FOR THE THREE AND SIX MONTHS PERIODS ENDED 30 JUNE 2007 AND 2006

(Translation of financial statements originally issued in Portuguese - Note 21)

		(Amounts expressed in Euro)
		IFRS		IFRS
			30-06-2007		30-06-2006
	Notes	2nd Quarter 071	YTD	2nd Quarter 061	YTD
Operating Income
Services rendered		(3,218,394)	1,541,462	4,429,234	8,877,093
Other operating income		629,559	2,341,520	304,746	491,626
Total operating income		(2,588,835)	3,882,982	4,733,980	9,368,719
Operating expenses
External supplies and services		(401,626)	(781,955)	(398,175)	(715,612)
Staff costs		(998,744)	(1,501,403)	353,232	(807,458)
Amortization and depreciation		(70,824)	(141,647)	(70,528)	(141,057)
Other operating expenses		(562,895)	(1,348,434)	(150,219)	(460,134)
Total operating expenses		(2,034,089)	(3,773,439)	(265,690)	(2,124,261)
Net Operating profit / (loss)		(4,622,924)	109,543	4,468,290	7,244,458
Net financial profit / (loss)	15	4,593,588	11,406,225	6,355,868	13,370,576
Investment income / (loss)	16	(4,517,005)	49,345,486	3,691,046	17,891,933
Profit / (loss) before taxes		(4,546,341)	60,861,254	14,515,204	38,506,967
Income tax		(3,523,873)	(4,101,141)	(579,104)	(1,924,206)
Net profit / (loss) for the six months period	17	(8,070,214)	56,760,113	13,936,100	36,582,761
Profit / (loss) per share (basic and diluted)	17	(0.01)	0.06	0.01	0.03

1) Not subject to limited review by external auditors.

The accompanying notes are part of these financial statements

COMPANY STATEMENTS OF CHANGES IN EQUITY

FOR THE SIX MONTHS PERIODS ENDED 30 JUNE 2007 AND 2006

(Amounts expressed in Euro)

(Translation of financial statements originally issued in Portuguese - Note 21)

					Other reserves
		Share	Own	Legal	and retained	Net	Total
	Notes	capital	Shares	Reserves	earnings	profit/loss	Equity
Balance at 1 January 2006 Appropriation of net profit of 2005		1,100,000,000		90,200,000	1,188,222,252	(227,707,550)	2,150,714,702
Appropriation of net profit/(loss) of 2005 Distributed Dividends Net profit/(loss) for the six months period					(227,707,550) (55,000,000)	227,707,550 -	- (55,000,000)
ending 30 June 2006				-		36,582,761	36,582,761
Balance at 30 June 2006		1,100,000,000	-	90,200,000	905,514,702	36,582,761	2,132,297,463
Balance at 1 January 2007 Appropriation of net profit of 2006		1,100,000,000	(205,000,000)	90,200,000	905,536,702	80,335,955	1,971,072,657
Appropriation of net profit/(loss) of 2006		-	-	4,800,000	75,535,955	(80,335,955)	-
Distributed Dividends		-	-	-	(75,000,000)	-	(75,000,000)
Changes in reserves:
Own shares hand over	2	-	205,000,000	-	-	-	205,000,000
Merger	2	-	-	-	(81,095,866)	-	(81,095,866)
Net profit/(loss) for the six months period							-
ending 30 June 2007		-	-	-	-	56,760,113	56,760,113
Balance at 30 June 2007		1,100,000,000	-	95,000,000	824,976,791	56,760,113	2,076,736,904

The accompanying notes are part of these financial statements

COMPANY STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS PERIODS ENDED 30 JUNE 2007 AND 2006

(Amounts expressed in Euro)

(Translation of financial statements originally issued in Portuguese - Note 21)

	Notes	30-06-2007	30-06-2006
OPERATING ACTIVITIES:
Net cash flow from operating activities (1)		14,866,313	28,778,468
INVESTING ACTIVITIES
Cash receipt related to:
Investments		97,008,064	-
Tangible and intangible assets		40,000	-
Interest and similar income		25,444,113	25,663,801
Dividends		18,193,658	14,200,887
Loans granted		1,285,331,902	1,719,865,000
Other cash receipts from investing activities		75,000,000	-
		1,501,017,737	1,759,729,688
Cash payments related to:
Investments		(152,976,629)	(17,927,932)
Tangible and intangible assets		(42)	(469,500)
Loans granted		(1,568,823,637) (4,969,473)	(1,803,256,000) -
Other cash payments from investing activities		(1,726,769,781)	(1,821,653,432)
Net cash used in investing activities (2)		(225,752,044)	(61,923,744)

FINANCING ACTIVITIES
Cash receipts related to:
Loans obtained		1,528,099,889	403,354,000
		1,528,099,889	403,354,000
Cash Payments related to:
Loans obtained		(1,166,036,090)	(558,241,020)
Interest and similar charges		(14,867,803)	(10,984,247)
Dividends		(75,000,035)	(54,999,980)
		(1,255,903,928)	(624,225,247)
Net cash used in financing activities (3)		272,195,961	(220,871,247)
Net increase in cash and cash equivalents (4) = (1) + (2) + (3)		61,310,230	(254,016,523)
Effect of foreign exchange rate		-	-
Cash and cash equivalents at the beginning of the period	8	50,030,583	449,715,072
Cash and cash equivalents - Effects of the Merger	2	(1,301,944)	-
Cash and cash equivalents at the end of the period	8	110,038,869	195,698,549

The accompanying notes are part of these financial statements

NOTES TO THE FINANCIAL STATEMENTS

FOR THE SIX MONTH PERIOD ENDING 30 JUNE 2007

(Amounts expressed in Euro)

(Translation of financial statements originally issued in Portuguese)

1. INTRODUCTION

SONAE DISTRIBUIÇÃO, SGPS, S.A. ("the Company" or "Sonae Distribuição", formerly known as Modelo Continente, SGPS, S.A.) is a Portuguese corporation, whose Head-office is in Rua João Mendonça nº 529, 4464-501 Senhora da Hora, Portugal.

Its principal activity is the management of investments (Note 5).

2. MERGER BY INCORPORATION

During the period ended 30 June 2007, the Company's subsidiaries Modelo, SGPS, S.A. and Parcium Imobiliária, S.A. were merged into the Company, with the assets and liabilities of these two companies transferred at their carrying amount, as these companies were under common control.

The merger produced accounting effects since 1 January 2007 and the carrying amount of the assets and liabilities merged, as at that date, were as follows:

Investments (Note 5)	457,860,106
Other non current assets	230,072,099
Other current assets	75,274,153
Cash and cash equivalents	45,046
	763,251,404
Liabilities
Other current liabilities	(625,615,353)
Net assets merged	137,636,051
Own shares atributed to the shareholders of the merged companies (Note 10)	205,000,000
Cash to be paid to the shareholder of the merged companies (Note10)	4,969,473
Company's carrying amount of the investment in the incorporated companies	8,762,444
Merger effect recorded in equity
Other reserves ( Note 11)	(81,095,866)
	137,636,051

As a consequence, the financial statements for the period ended 30 June 2007 are not directly comparable with those of 2006 for the same period.

3. BASIS OF PRESENTATION AND PRINCIPAL ACCOUNTING POLICIES

Interim financial statements are presented quarterly, in accordance with IAS 34 – "Interim Financial Reporting".

The accounting policies adopted are consistent with those used in the preparation of the financial statements for the year ended 31 December 2006.

4. CHANGES IN ACCOUNTING POLICIES AND CORRECTION OF ERRORS

During the period there were no changes neither in accounting policies nor correction of errors.

5. INVESTMENTS

As of 30 June 2007 and 31 December 2006, the detail of investments was as follows:

	30.June.2007		31.December.2006
Company	%	Closing	%	Closing
	Held	Balance	Held	Balance
Investimentos em partes de capital
Bertimóvel - Sociedade Imobiliária, S.A. (1)	100.00%	700,000	-	-
Canasta - Empreendimetos Imobiliários, S.A. (1)	100.00%	1,579,375	-	-
Chão Verde - Sociedade de Gestão Imobiliária, S.A. (1)	100.00%	2,244,591	-	-
Citorres - Sociedade Imobiliária, S.A. (1)	100.00%	477,848	-	-
Contibomba - Comércio e Distribuição de Combustíveis, S.A.	100.00%	372,000	100.00%	372,000
Contimobe - Imobiliária Castelo Paiva, S.A. (1)	100.00%	231,318,722	10.00%	10,728,063
Cumulativa - Sociedade Imobiliária, S.A. (1)	100.00%	2,095,191	-	-
Difusão - Sociedade Imobiliária, S.A. (1)	100.00%	50,000	-	-
Fozimo - Sociedade Imobiliária, S.A.	100.00%	24,940	100.00%	24,940
Fozmassimo - Sociedade Imobiliária, S.A. (1)	100.00%	6,264,902	-	-
Fundo de Investimento Imobiliário Imosonae Dois	100.00%	182,228,145	100.00%	117,425,732
Fundo Fechado de Investimento Imobiliário Efisa Imobiliário	0.00%	-	100.00%	43,913,700
Fundo de investimento Imobiliário Fechado Imosede	33.81%	13,525,000	33.81%	13,525,000
IGI - Investimento Imobiliário, SA (1)	100.00%	114,495,350	-	-
Igimo - Sociedade Imobiliária, S.A.	100.00%	220,000	100.00%	220,000
Iginha - Sociedade imobiliária, S.A.	100.00%	109,000
Imoconti - Sociedade Imobiliária, S.A.	100.00%	50,000	100.00%	50,000
Imoestrutura - Sociedade Imobiliária,S.A. (1)	100.00%	24,940	-	-
Imomuro - Sociedade Imobiliária, S.A.	100.00%	439,940	100.00%	439,940
Imoresultado - Sociedade Imobiliária, S.A.	100.00%	109,736	100.00%	109,736
Imosistema - Sociedade Imobiliária, S.A. (1)	100.00%	280,000	-	-
Infofield - Informática, S.A.	10.00%	530,459	10.00%	530,459
Marcas MC zRt	100.00%	72,784,761	100.00%	79,545
MJLF - Empreendimetos Imobiliários, S.A. (1)	100.00%	1,619,397	-	-
Modalfa - Comércio e Serviços, S.A. (1)	10.00%	27,933	-	-
Modelo Continente - Operações de Retalho, SGPS, S.A.	100.00%	1,050,000,000	100.00%	1,000,000,000
Modelo Continente Hipermercados, S.A.	56.00%	76,990,240	46.20%	2,304,446
Modelo, SGPS, S.A. (2)	-	-	0.15%	562,444
Modelo-Com - Vendas por Correspondência, S.A.	100.00%	12,637,016	100.00%	12,637,016
Ok Bazar - Comércio Geral, S.A.	-	-	100.00%	1,953,945
Parcium Imobiliária, S.A. (2)	-	-	100.00%	8,200,000
Predicomercial - Promoção Imobiliária, S.A. (1)	100.00%	6,372,293	10.00%	187,548
Selifa - Sociedade de Empreendimentos Imobililiários, S.A. (1)	100.00%	1,333,379	-	-
Sempre à Mão - Sociedade Imobiliária, S.A.	100.00%	50,000	100.00%	50,000
Sempre a Postos - Produtos Alimentares e Utilidades, Lda	25.00%	249,399	25.00%	249,399
Sesagest - Projectos e Gestão Imobiliária, S.A.	100.00%	36,677,088	100.00%	36,677,088
Socijofra - Sociedade Imobiliária, S.A. (1)	100.00%	550,000	-	-
Sociloures - Sociedade Imobiliária, S.A.	100.00%	10,000,000	100.00%	10,000,000
Soflorin, B.V.	100.00%	57,309,037	100.00%	57,309,037
Sonae Capital Brasil, S.A.	37.00%	23,334,858	37.00%	23,334,858
Sonae Retalho España, S.A.	100.00%	2,549,831	100.00%	2,549,831

Sonae, SGPS, S.A.	-	-	0.003%	75,500
Sonaegest - Soc. Gest. de Fundos de Investimentos, S.A. (1)	20.00%	159,615	-	-
Sondis Imobiliária, S.A. (1)	100.00%	49,940	-	-
Sontária - Empreendimentos Imobiliários, S.A. (1)	100.00%	10,600,000	-	-
Sonvecap, B.V.	100.00%	3,000,000	100.00%	3,000,000
Sportzone - Comércio de Artigos de Desporto, S.A.	10.00%	706,326	10.00%	706,326
SRE - Projectos de Consultadoria, S.A.	-	-	100.00%	1,259,784
Todos os Dias-Comércio Ret. e Expl. de Centros Comerciais, S.A.	100.00%	1,180,000	100.00%	1,180,000
Worten - Equipamentos para o Lar, S.A.	10.00%	462,494	10.00%	462,494
		1,925,783,746		1,350,118,831
Impairment losses on Investments (3)		-37,568,496
Advances on Financial Investments		1,320,000
		1,889,535,250		1,350,118,831

(1) – Investments incorporated by merger process (Note 2)

(2) – Investments extinguished by merger process (Note 2)

(3) – The amount of impairment losses was recorded in the caption "Other reserves" in result of the merger by incorporation referred to in note 2 (35,145,990 Euro) and in the Income Statement caption "Impairment losses on investments" (3,422,506 Euro – Note 16).

6. OTHER NON-CURRENT ASSETS

As of 30 June 2007 and 31 December 2006, the caption "Other non current assets" was detailed as follows (Note 19):

	30.June.2007	31.December.2006
Loans to group companies (Note 19)	673,046,129	457,114,129

These loans bear interests at normal market rates.

7. OTHER CURRENT ASSETS

As of 30 June 2007 and 31 December 2006, the caption "Other current assets" was detailed as follows:

	30.June.2007	31.December.2006
Clients	932,621	21,191,886
Group companies	536,981,667	897,398,511
Other debtors	6,536,073	2,709,977
Taxes and contributions receivable	10,004,962	10,954,848
Deferred costs	55,860	59,591
Accrued income	26,193,258	3,462,277
	580,704,441	935,777,090

a) The caption "Group companies" refers mainly to: (i) 507,520,600 Euro relating to short term loans to group companies (Note 19); (ii) 29,461,062 Euro relating to income tax calculated by the group companies taxed in accordance with the Special Regime for Taxing Groups of Companies; (vi) 5 Euro relating to other debts by group companies.
b) The caption "Other Debtors", includes the amount of approximately 5,790,800 Euro, related to tax claims. The Board of Directors of Sonae Distribuição understands that the outcome of these claims will be favourable to the company.

8. CASH AND CASH EQUIVALENTS

As of 30 June 2007 and 31 December 2006, the caption "Cash and Cash Equivalents" can be detailed as follows:

	30.June.2007	31.December.2006
Bank deposits	110,018,831	50,033,177
Treasury applications	34,997
Cash and cash equivalents	110,053,827	50,033,177

Bank overdrafts (Note 12)	(14,959)	(2,594)
Cash and cash equivalents on the cash flows' statement	110,038,869	50,030,583

Bank overdrafts are recorded in the balance sheet under Current loans

9. SHARE CAPITAL

As at 30 June 2007 and 31 December 2006, the share capital, which is fully subscribed and paid for, is made up of 1,100,000,000 ordinary shares with a nominal value of 1 Euro each.

As at 30 June 2007, the subscribed share capital was distributed as follows:

Entity	%
Sonae, SGPS, S.A.	74.98
Sonae Investments, B.V.	15.93
Soflorin, B.V.	9.09

Efanor Investimentos, SGPS, S.A. and its subsidiaries held 52.94% of Sonae S.G.P.S., S.A..

10. OWN SHARES

As at 30 June 2007 and 31 December 2006, the caption "Own shares" can be detailed as follows:

	30.June.2007	31.December.2006
Own shares - nominal value	-	100,000,000
Own Shares - discounts and prizes	-	105,000,000
	-	205,000,000

The merger of Modelo, SGPS, S.A. and Parcium Imobiliária, S.A. into Sonae Distribuição, SGPS, S.A. led to an exchange of assets under the following terms:

• Each share of the merged company Modelo, SGPS, S.A. corresponds to 7,327 Sonae Distribuição, SGPS, S.A. shares. As a result, 100,000,000 own shares, with a nominal value of 1 Euro corresponding to a total amount of 205,000,000 Euro, were handed over to Soflorin, BV the sole shareholder of Modelo, SGPS, S.A., together with an amount of 4,969,473 Euro paid in cash.

In accordance with the Portuguese Company's Act, the shares above mentioned are considered own shares because the company Soflorin, B.V. is wholly owned by Sonae Distribuição, SGPS, S.A..

11. RESERVES

	30.June.2007	31.December.2006
Legal reserves	95.000.000	90.200.000
	95.000.000	90.200.000
Other reserves and retained earnings:
Reserves under Article 324º of the CSC	205.000.000	205.000.000
Fair value reserves	42.500	42.500
Other reserves	619.934.291	700.494.202
	824.976.791	905.536.702
	919.976.791	995.736.702

As of 30 June 2007 the company held 95,000,000 Euro of legal reserves. According to Portuguese Commercial Law (Portuguese Company's Act, "Código das Sociedades Comerciais") these reserves cannot be distributed except upon dissolution of the company, but can be used to absorb losses after all the other reserves have been used up, or to increase capital.

As a result of the acquisition of own shares in 2006, free reserves in the same amount of the acquisition cost were made unavailable in accordance with article 324 of Portuguese Company's Act. This reserve cannot be used until the referred own shares are extinct or disposed to a Company outside the group (Note 10).

12. LOANS

As of 30 June 2007 and 31 December 2006, loans were made up as follows:

		30.June.2007					31.December.2006
		Book Value		Nominal Value		Book Value	Nominal Value

	Current	Non Current	Current	Non Current	Current	Non Current	Current	Non Current

Bank loans	101,400,000		101,400,000		161,400,000		161,400,000
Bank overdrafts	14,959		14,959		2,594		2,594
Bond loans	199,659,467	593,285,061	200,075,000	596,925,000		593,166,278		597,000,000
	301,074,426	593,285,061	301,489,959	596,925,000	161,402,594	593,166,278	161,402,594	597,000,000

Bond loans can be detailed as follows:

Modelo Continente - 2003	82,000,000
Modelo Continente - 2004	100,000,000
Modelo Continente - 2005/2010	265,000,000
Modelo Continente - 2005/2012	150,000,000
Modelo Continente - 2007/2012	200,000,000

Bonds - MODELO CONTINENTE - 2003

1,640,000 bonds – Nominal Value: 50 Euro.

Maximum term: 8 (eight) years.

Annual interest rate: the interest rate which is variable is indexed to the EURIBOR 6 month rate on the second working day preceding the interest period, with a spread of 0.75% p.a. Interest Payment: half yearly in arrears, on 15 April and 15 October of each year. Redemption: at par, in one payment on 15 October 2011, the maturity date of the loan. Early redemption is not possible, either by initiative of the issuer or the bondholders.

Bonds - MODELO CONTINENTE - 2004

10,000,000 bonds – Nominal Value: 10 Euro.

Maximum term: 5 (five) years.

Annual interest rate: the interest rate, which is variable, is indexed to the EURIBOR 6 month rate on the second working day preceding the interest period, with a spread of 1.15% p.a.. Interest Payment: half yearly in arrears, on 18 March and 18 September of each year.

Redemption: at par, in one payment on 18 March 2009, the maturity date of the loan. Early redemption is not possible, either by initiative of the issuer or the bondholders.

Bonds - MODELO CONTINENTE - 2005 / 2010

265,000 bonds – Nominal Vale: 1,000 Euro.

Maximum term: 5 (five) years

Annual interest rate: the interest rate, which is variable, is indexed to the EURIBOR 6 month rate on the second working day preceding the interest period, with a spread of 0.70% p.a.

Interest Payment: half yearly in arrears, on 3 February and 3 August of each year.

Redemption: at par, in one payment on 5th year in one payment on 3 August 2010, the maturity date of the loan, except if it an early redemption occurs.

Early redemption (call-option): early redemption is possible by initiative of the issuer, either totally or partially (by reducing the nominal value of the bonds), on the 2nd, 3rd or 4th year of maturity. In this situation the issuer is obliged to pay a prize of 0.125% over de reimbursed value.

On the 3rd August 2007, the Company partially reimbursed the bonds, according to the issuing conditions. The amount reimbursed per bond was 755 Euro plus a premium of 0.94375 Euro.

After the reimbursement, the loan will be reduced to 64,925,000 Euro (265,000 bonds with a 245 Euro nominal value).

Bonds - MODELO CONTINENTE - 2005 / 2012

15,000,000 bonds – Nominal Value: 10 Euro

Maximum term: 7 (seven) years

Annual interest rate: the interest rate, which is variable, is indexed to the EURIBOR 6 month rate on the second working day preceding the interest period, with a spread of 0.85% p.a.

Interest Payment: half yearly in arrears, on 2 February and 2 August of each year.

Redemption: at par, in one payment on 2 August 2012 the payment date of the 14th coupon, except if it an early redemption occurs.

Early redemption (call-option): early redemption is possible by initiative of the issuer, either totally or partially (by reducing the nominal value of the bonds), on the reimbursed dates of 10th, 11th, 12th and 13th coupon, without the obligation of paying any prize.

Bonds - MODELO CONTINENTE - 2007 / 2012

4,000 bonds – Nominal Value: 50,000 Euro.

Maximum term: 5 (five) years.

Annual interest rate: the interest rate, which is variable, is indexed to the EURIBOR 6 month rate on the second working day preceding the interest period, with a spread of 0.5% p.a.

Interest Payment: half yearly in arrears on 30 April and 30 October of each year.

Redemption: at par, in one payment on 30 April 2012 the payment date of the 10th coupon. Early redemption is not possible, either by initiative of the issuer or the bondholders.

Bank loans

Includes:

a) A short term commercial paper in the amount of 100,000,000 Euro (160,000,000 on 31 December 2006), which bears interests at normal market rates and also a bank loan reimbursable in 2007, in the amount of 1,400,000 Euro.

b) The amount of 14,959 Euro corresponds to bank overdrafts (Note 8).

c) The Caption Bond Loans includes an amount of 200,075,000 Euro referring to the Bond – Modelo Continente – 2005/2012, which was reimbursed in August 2007.

13. OTHER CURRENT LIABILITIES

As of 30 June 2007 and 31 December 2006 "Other current liabilities" are made up as follows:

	30.June.2007	31.December.2006
Suppliers	55,917	81,620
Group companies	257,685,723	41,033,321
Other creditors	5,171,779	11,165,157
Tax and contributions payable	235,765	3,932,935
Accrued costs	18,541,645	11,780,743
	281,690,829	67,993,776

a) The caption "Group companies" refers mainly to: (i) a payable amount of 254,271,000 Euro relating to a short term loan from group companies (Note 19); (ii) the amount of 3,414,723 Euro relating to income tax calculated by the group companies, taxed in accordance with the Special Regime for Taxing Groups of Companies.

14. CONTINGENT ASSETS AND LIABILITIES

As of 30 June 2007 and 31 December 2006 contingent assets and liabilities were made up as follows:

	30.June.2007	31.December.2006
Guarantees rendered:
related to tax additional assesments	26,985,237	22,595,842
related to autarchical lawsuits	289,380
	27,274,617	22,595,842

No provision has been recognized for these tax additional assessments, to which some guarantees were rendered, as the Board of Directors expects them to be resolved with no additional liability to the company.

15. NET FINANCIAL PROFIT

As of 30 June 2007, this caption includes 32,828,869 Euro (24,923,549 Euro at 30 June 2006) concerning received interests and 20,776,846 Euro (11,032,347 Euro at 30 June 2006) relating supported interests.

16. RESULTS RELATED TO INVESTMENTS

As of 30 June 2007 and 30 June 2006, profit/loss related to investments are made up as follows:

		2007		2006
	2nd Quarter	Acumulated	2nd Quarter	Acumulated
Dividends	-	18,193,658	-	14,200,887
Disposal's profits	-	35,728,616	-	-
Disposal's losses	(5,394,747)	(5,454,530)	(24,750,954)	(24,750,954)
Impairment losses on Investments	(3,422,506)	(3,422,506)	-	-
Impairment losses reversion	4,300,248	4,300,248	28,442,000	28,442,000
	(4,517,005)	49,345,486	3,691,046	17,891,933

During the six month period ended 30 June 2007, the company sold 100% of the participation in Ok Bazar – Comércio Geral, S.A., 100% of the participation in the SRE – Projectos de Consultadoria, S.A. and 10% of the participation in Cacetinho – Comércio Retalhista e Exploração de Centros Comerciais, S.A. to its subsidiary Modelo Continente Hipermercados, S.A., having registered a net disposal profit of 35,668,833 Euro.

Additionally, the Company disposed to a Sonae SGPS, S.A. subsidiary, 100% of the participation in Imoponte – Sociedade Imobiliária, S.A., having registered a net loss of approximately 4,980,000 Euro and reversed an impairment loss in the amount of 3.851.835 Euro, which had been recorded as a consequence of Modelo, SGPS, S.A. merger (Note 2).

Also during the six months period ending in 30 June 2007, the Company has disposed the shares owned in Sonae, SGPS, S.A.. This disposal has generated a net disposal loss of 417,913 Euro and the correspondent impairment loss that had been recognized was reverted.

17. EARNINGS PER SHARE

Earnings per share for the period were calculated taking into consideration the following amounts:

	30.June.2007	30.June.2006
Net profit
Net profit taken into consideration to calculate basic earnings per share
(Net profit for the period)	56,760,113	36,582,761
Net profit taken into consideration to calculate diluted earnings per share	56,760,113	36,582,761
Number of shares
Weighted average number of shares used to calculated
basic Earnings per share	1,000,000,000	1,100,000,000
Weighted average number of share used to calculated the
diluted earnings per share	1,000,000,000	1,100,000,000
Earnings per share (basic and diluted)	0.06	0.03

The Annual General Meeting held on 2 May of 2007 approved the distribution of dividends amounting to 75,000,000 Euro.

18. APPROVAL OF THE FINANCIAL STATEMENTS

The accompanying financial statements were approved by the Board of Directors and authorized for issue on the 22nd August 2007.

19. INFORMATION REQUIRED BY LAW

Art 5, item 4 of Decree-Law 3318/94

During the six month period ended 30 June 2007, shareholders' loan agreements were signed with the following companies:

Canasta - Empreendimentos Imobiliários, S.A. Chão Verde - Sociedade de Gestão Imobiliária, S.A. Contimobe - Imobiliária Castelo Paiva, S.A. Cumulativa - Sociedade Imobiliária, S.A. Difusão - Sociedade Imobiliária, S.A. IGI - Investimento Imobiliário, S.A. Iginha – Sociedade Imobiliária, S.A. Imoestrutura - Sociedade Imobiliária, S.A. Imoponte - Sociedade Imobiliária, S.A. Imosistema - Sociedade Imobiliária, S.A. Modelo Continente Hipermercados, S.A. MJLF - Empreendimentos Imobiliários, S.A. Selifa - Sociedade de Empreendimentos Imobiliários, S.A. Socijofra - Sociedade Imobiliária, S.A. Soflorin, B.V. Sonae Retalho España, S.A. Sondis Imobiliária, S.A. Sonvecap, B.V. Sportzone - Comércio de Artigos de Desporto, S.A. Worten - Equipamentos para o Lar, S A.

During the six months period ended 30 June 2007, treasury application agreements were signed with the following companies:

Iginha – Sociedade Imobiliária, S.A. Imoresultado – Sociedade Imobiliária, S.A. Imosistema – Sociedade Imobiliária, S.A. Marcas MC zRt Pharmacontinente – Saúde e Higiene, S.A. Sonae, SGPS, S.A.

As of 30 June 2007 and 31 December 2006, the receivable balances related to the agreements mentioned above were as follows:

Company	30.June.2007	31.December.2006
Bertimóvel - Sociedade Imobiliária, S.A.	14,878,000	-
Canasta - Empreendimentos Imobiliários, S.A.	3,103,000	-
Chão Verde - Sociedade de Gestão Imobiliária, S.A.	2,887,584	-
Citorres - Sociedade Imobiliária, S.A.	3,959,000	-
Contibomba - Comércio e Distribuição de Combustíveis, S.A.	183,000	172,000
Contimobe - Imobiliária Castelo Paiva, S.A.	85,830,000	35,000,000
Cumulativa - Sociedade Imobiliária, S.A.	3,084,000	-
Difusão - Sociedade Imobiliária, S.A.	19,922,000	-
Fozimo – Sociedade Imobiliária, S.A.	2,036,000	2,050,000
IGI - Investimento Imobiliário, S.A,	137,578,000	-
Igimo – Sociedade Imobiliária, S.A.	624,000	654,000
Iginha – Sociedade Imobiliária, S.A.	14,980,755	-
Imoconti – Sociedade Imobiliária, S.A.	19,706,401	19,763,401
Imoestrutura - Sociedade Imobiliária, S.A.	650,000	-
Imomuro - Sociedade Imobiliária, S.A.	4,281,897	4,175,897
Imoresultado – Sociedade Imobiliária, S.A.	375,000	357,000
Imosistema - Sociedade Imobiliária, S.A.	4,634,000	-
MJLF - Empreendimentos Imobiliários, S.A.	3,926,000	-
Modelo , SGPS, S.A.	-	575,286,000
Modelo Continente Hipermercados, S.A.	493,635,100	225,418,500
Ok Bazar - Comércio Geral, S.A.	-	10,044,000
Parcium Imobiliária, S.A.	-	41,259,000
Pharmacontinente - Saúde e Higiene, S.A.	61,000	-
Predicomercial - Promoção Imobiliária, S.A.	11,705,000	11,219,000
Selifa - Sociedade de Empreendimentos Imbiliários, S.A.	4,434,000	-
Sempre à Mão - Sociedade Imobiliária, SA	90,000	93,000
Sesagest - Projectos e Gestão Imobiliária, S.A.	50,753,000	50,169,000
Socijofra - Sociedade Imobiliária, S.A.	8,403,000	-
Sociloures - Sociedade Imobiliária, S.A.	33,085,000	39,281,000
Soflorin, B.V.	33,885,330	38,157,330
Sonae Retalho España, S.A.	13,002	60,001
Sondis Imobiliária, S.A.	21,719,159	-
Sontária - Empreendimentos Imobiliários, S.A.	3,759,502	-
Sonvecap, B.V.	150,976,000	158,701,000
Sportzone - Comércio de Artigos de Desporto, S.A.	5,411,000	3,411,000
Todos os Dias - Comércio Ret. e Expl. de Centros Comerciais, S.A.	940,000	1,027,000
Worten - Equipamentos para o Lar, S A.	39,058,000	20,472,609
	1,180,566,729	1,236,770,738

Loans granted short term (Note 7) and long term (Note 6):

From the total amounts referred above, 673.046.129 Euro (457.114.129 Euro at 31 December 2006) are recorded as Non current Assets.

As of 30 June 2007 and 31 December 2006, the payable balances related to the agreements mentioned above were as follows:

Loans obtained – Short term (Note 13):

Company	30.June.2007	31.December.2006
Fozmassimo - Sociedade Imobliária, S.A.	(4,915,000)	-
Marcas MC ZRT	(5,440,000)
Modalfa - Comércio e Serviços, S.A.	-	(1,878,000)
Modelo Continente - Operações de Retalho, SGPS, SA	(238,492,000)	(35,615,000)
Modelo Hiper - Imobiliária, S.A.	(1,759,000)	(2,040,000)
Modelo.Com - Vendas por Correspondência, S.A.	(3,665,000)	(194,201)
SRE - Projectos de Consultoria, S.A.	-	(192,000)
	(254,271,000)	(39,919,201)

20. SUBSEQUENT EVENTS

On the 3rd August 2007, the Company has reimbursed partially bonds denominated Modelo Continente 2005/2010 represented by 265,000 bonds at a nominal value of 1,000 Euro each according to the issuing conditions. The amount reimbursed per bond was 755 Euro plus a premium of 0.94375 Euro.

On the 27th July 2007, the Company has reached to an agreement with the Carrefour Group for the acquisition of 99.8648% of the share capital of Carrefour (Portugal) – Sociedade de Exploração de Centros Comerciais, S.A., for a total enterprise value of 662 million Euro.

This transaction is still subject to the approval by the Portuguese Competition Authority.

21. NOTE ADDED TO TRANSLATION

Matosinhos, 22 August 2007

LIMITED REVIEW REPORT

30 JUNE 2007

LIMITED REVIEW REPORT PREPARED BY THE AUDITOR REGISTED WITH CMVM ON HALF-YEAR FINANCIAL INFORMATION

(Translation of a report originally issued in Portuguese)

Introduction

1. In accordance with the Securities Market Code, we hereby present our Limited Review Report on the financial information of Sonae Distribuição - SGPS, S.A. (formerly denominated Modelo Continente, SGPS, S.A. - "Company") for the half-year ended 30 June 2007 included in: the Report of the Board of Directors, the consolidated and individual Balance Sheets (that reflect a total of 2,458,545,539 Euro and 3,252,864,705 Euro, respectively, and a consolidated and individual equity of 730,923,422 Euro and 2,076,736,904 Euro respectively, including a consolidated net profit attributable to Equity holders of 49,076,515 Euro and an individual net profit of 56,760,113 Euro, respectively), the consolidated and individual Statements of profit and loss, changes in equity and cash flows for the half-year then ended and the related notes.
1. The amounts in the financial statements, as well as the additional consolidated and individual financial information, are in accordance with the accounting records of the Company and its subsidiaries.

Responsibilities

1. The Company's Board of Directors is responsible for: (i) the preparation of consolidated and individual financial information that present a true and fair view of the financial position of the Company and of the companies included in the consolidation and the consolidated and individual results of their operations, changes in equity and cash flows; (ii) the preparation of historical financial statements in accordance with International Financial Reporting Standards as adopted by the European Union and that is complete, true, timely, clear, objective and licit, as required by the Securities Market Code; (iii) the adoption of adequate accounting policies and criteria; (iv) the maintenance of an appropriate internal control system; and (v) informing any significant facts that have influenced their operations, financial position or results.
1. Our responsibility is to examine the financial information contained in the above mentioned documents, namely verifying that, in all material respects, the information is complete, true, timely, clear, objective and licit, as required by the Securities Market Code, and to issue a moderate assurance, professional and independent report on that financial information based on our work.

Scope

1. The objective of our work was to obtain moderate assurance as to whether the above mentioned financial information is free of material misstatement. Our work was performed in accordance with the Auditing Standards issued by the Portuguese Institute of Statutory Auditors, was planned in accordance with that objective, and consisted essentially of enquiries and analytical procedures with the objective of reviewing: (i) the reliability of the assertions included in the consolidated and individual financial information; (ii) the adequacy of the accounting principles used, taking into consideration the circumstances and the consistency of their application; (iii) the applicability, or not, of the going concern concept; (iv) the presentation of the consolidated and individual financial information; and (v) whether, in all material respects, the consolidated and individual financial information is complete, true, timely, clear, objective and licit as required by the Securities Market Code.
1. Our work also included verifying that the consolidated and individual financial information included in the Report of the Board of Directors is consistent with the other above mentioned financial information.
1. We believe that our work provides a reasonable basis for issuing the present limited review report on the half-year financial information.

Opinion

Based on our work, which was performed with the objective of obtaining moderate assurance, nothing came to our attention that leads us to believe that the consolidated and individual financial information for the half-year ended 30 June 2007 referred to in paragraph 1 above of Sonae Distribuição - SGPS, S.A. is not exempt from material misstatement that affects its conformity with International Financial Reporting Standards as adopted by the European Union and that, in terms of the definitions included in the Auditing Standards referred to in paragraph 5 above, it is not complete, true, timely, clear, objective and licit.

Porto, 22 August 2007

DELOITTE & ASSOCIADOS, SROC, S.A. Represented by António Manuel Martins Amaral

AI Terminal

Sonae SGPS

1901_ir_2007-09-04_e9cbfe62-cedf-4ac5-8e55-7a93dd335d26.pdf

SONAE DISTRIBUÇÃO, SGPS, SA

Share Capital 1.100.000.000 Euros

REPORT AND ACCOUNTS

REPORT OF THE BOARD OF DIRECTORS

30 JUNE 2007

Management Report Sonae Distribuição – S.G.P.S., S.A.

Performance during the period

Investment

Capital structure

Corporate Governance

Outlook

Sonae Distribuição, SGPS, S.A.

DISCLOSURE OF SHARES AND OTHER SECURITIES HELD BY MEMBERS OF THE BOARD OF DIRECTORS AND OF TRANSACTIONS DURING THE YEAR INVOLVING SHARES AND OTHER SECURITIES

Sonae Distribuição, SGPS, S.A.

SHARES HELD AND VOTING RIGHTS OF COMPANIES OWNING MORE THAN 2% OF THE SHARE CAPITAL OF THE COMPANY

CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS AS AT 3O JUNE 2007 AND DECEMBER 2006

(Amounts expressed in Euro)

(Translation of financial statements originally issued in Portuguese - Note 28)

CONSOLIDATED INCOME STATEMENTS BY NATURE

FOR THE SIX MONTHS PERIODS ENDED 30 JUNE 2007 AND 2006

(Amounts expressed in Euro)

(Translation of financial statements originally issued in Portuguese - Note 28)

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE SIX MONTHS PERIODS ENDED 30 JUNE 2007 AND 2006

SONAE DISTRIBUIÇÃO, S.G.P.S., S.A. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS PERIODS ENDED 30 JUNE 2007 AND 30 JUNE 2006 (Amounts expressed in Euro)

(Translation of financial statements originally issued in Portuguese - Note 28)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS PERIOD ENDED 30 JUNE 2007

(Amounts expressed in Euro)

1. INTRODUCTION

2. BASIS OF PRESENTATION

3. PRINCIPAL ACCOUNTING POLICIES

4. GROUP COMPANIES INCLUDED IN THE CONSOLIDATION

5. INVESTMENTS IN ASSOCIATED COMPANIES

6. CHANGES IN CONSOLIDATION PERIMETER

Purchases

Disposals

7. TANGIBLE AND INTANGIBLE ASSETS

Tangible assets - June 2007

Intangible assets - June 2007

8. GOODWILL

9. INVESTMENTS

10. OTHER NON-CURRENT ASSETS

11. OTHER CURRENT ASSETS

12. DEFERRED TAX

13. CASH AND CASH EQUIVALENTS

14. SHARE CAPITAL

15. LOANS

Bond Loans

MODELO CONTINENTE - 2004 BONDS

MODELO CONTINENTE - 2005/2010 BONDS

MODELO CONTINENTE - 2005/2012 BONDS

MODELO CONTINENTE - 2007/2012 BONDS

Other loans – non currents

Bank loans – current

16. OTHER NON CURRENT LIABILITIES

17. SHARE BASED PAYMENT PLANS

18. OTHER CURRENT LIABILITIES

19. PROVISIONS AND ACCUMULATED IMPAIRMENT LOSSES

20. CONTINGENT ASSETS AND LIABILITIES

21. RELATED PARTIES

22. INCOME TAX

23. EARNINGS PER SHARE

24. DIVIDENDS

25. SEGMENT INFORMATION

26. SUBSEQUENT EVENTS

27. APPROVAL OF THE FINANCIAL STATEMENTS

28. NOTE ADDED TO TRANSLATION

INDIVIDUAL FINANCIAL STATEMENTS

COMPANY BALANCE SHEETS AS 30 JUNE 2007 AND DECEMBER 2006

(Amounts expressed in Euro)

(Translation of financial statements originally issued in Portuguese - Note 21)

COMPANY INCOME STATEMENTS BY NATURE

FOR THE THREE AND SIX MONTHS PERIODS ENDED 30 JUNE 2007 AND 2006

(Translation of financial statements originally issued in Portuguese - Note 21)

COMPANY STATEMENTS OF CHANGES IN EQUITY