North West Company Fund: 1998 First QuarterEarnings.

WINNIPEG, MANITOBA--(BUSINESS WIRE)--June 4, 1998-- (TSE:NWF.UN) (WINNIPEG STOCK EXCHANGE:NWF.UN) North West Company Fund (the "Fund") today reported 1998 first quarter earnings for the period ended May 2, 1998.

CONSOLIDATED RESULTS BEFORE UNUSUAL ITEM

First quarter net earnings

before unusual item increased 23.6 percent to $2.9 million or $0.19 per unit, compared to $2.3 million or $0.16 per unit last year. First quarter consolidated revenues of $145.3 million were $6.7 million or 4.8 percent higher than last year. Earnings before interest, taxes and depreciation were $9.6 million compared to $10.7 million last year.

CANADIAN OPERATIONS

Canadian revenues at $117.7 million increased 5.0 percent in the first quarter compared to last year. Within the Company's core remote store group, which accounted for 87 percent of total sales, food sales were up 3.1 percent on a comparable basis and general merchandise increased 8.5 percent. Warmer and earlier spring weather contributed to very strong seasonal sales while Selections catalogue continued to capture a greater share of non-foods spending and was up 18 percent.

Canadian operating profits at $4.9 million compared to $6.4 million last year, were expected to be down in the first quarter. Food and general merchandise margin contribution increased during the quarter, but fell short of plan. General merchandise gross margin rates in particular were affected by an increased blend of lower margin hardgoods and Selections Catalogue sales. Mark-ups are expected to improve in both of these areas in the second half of the year. Non-core activities performed below plan largely due to depressed margins in our Fur Marketing business, which is concentrated in the first quarter. Administration costs were up over last year due to higher staffing levels and increased amortization expenses related to the recent completion of head office systems.

ALASKAN OPERATIONS (stated in U.S. dollars)

Alaska Commercial Company (AC) sales were flat in the first quarter primarily due to stronger economic activity in several locations last year, stronger competition facing AC's convenience store group and temporary disruptions caused by the completion of major renovations to AC's second largest store, in Bethel, Alaska. Food sales, which represented 81 percent of total sales, increased 2.7 percent lead by groceries and expanded deli/bakery operations. General merchandise sales were down 9.8 percent but showed improvement late in the quarter. AC's operating profit increased to $101,000 compared to an operating loss of $10,000 last year

REPOSITIONING OF CANADIAN OPERATIONS

In the second half of 1997 NWC launched Vision 2000 plus, a strategy development project aimed at strengthening the Company's competitive positioning and profitable growth potential in Canada. On May 12th NWC announced a restructuring plan as part of the implementation of Vision 2000 plus.

Vision 2000 plus and the announced restructuring plan builds long-term value in NWC's Canadian operations through the disciplined execution of three key strategies that are explained in greater detail in this year's annual report. -0-

1.   Create a streamlined, efficient core business.
2.   Create a value-driven customer and merchandise focus.
3.   Create a superior store and direct sales capability.

-0-

The restructuring plan directly supports these strategies by reducing administrative costs, exiting non-core, lower profit store locations and reformatting NWC's core stores to capture a higher share of food and everyday household spending that is valued most by its customers. These initiatives are expected to deliver capital investment savings of $20 million and annual expense savings of at least $6 million by year 2000. The restructuring costs, which have been recorded in the first quarter, are $20 million on a pre-tax basis, including $5 million for head office staff reductions, $10 million for non-core business and store disposals and $5 million for discontinued inventory in the core stores. The after tax impact is $11.6 million, or 77 cents per unit.

OTHER HIGHLIGHTS

The Fund increased its quarterly distribution to $0.25 per unit commencing March 15, 1998 and expects to maintain that level for 1998. A fifth distribution for 1998, payable in January 1999, will be approximately $0.25 per unit and is expected to be made by a distribution of units of the Fund.

Transport Nanuk, an eastern Arctic shipping joint venture between NWC and Logistecs Corporation, announced a strategic alliance with Nunavut Umiaq Corporation (NUC), an Inuit birthright controlled corporation. Transport Nanuk and NUC have created a new company called Nunavut Eastern Arctic Shipping Inc. (NEAS). NEAS' mission is to providing leading maritime transportation services to communities in the Eastern Arctic. -0-

CONSOLIDATED BALANCE SHEET
(unaudited, in thousands of Canadian dollars)
---------------------------------------------------------------
                              May 2, 1998      April 26, 1997
ASSETS

Current assets                     $218,330          $193,349

Capital assets                      195,482           188,468

Other assets                         13,026            11,118
                              --------------     --------------
                                   $426,838          $392,935
                              --------------     --------------
                              --------------     --------------
LIABILITIES

Current liabilities                $137,633          $102,975

Long-term debt                      132,562           135,019

Deferred income taxes                 8,896             8,160
                              --------------     --------------
                                    279,091           246,154

EQUITY                              147,747           146,781
                              --------------     --------------
                                   $426,838          $392,935
                              --------------     --------------
                              --------------     --------------

Identifiable assets
 Canadian operations               $289,086          $272,854
 Alaskan operations                  68,960            61,204


CONSOLIDATED STATEMENT OF EARNINGS AND RETAINED EARNINGS
(unaudited, in thousands of Canadian dollars)

                                    13 Weeks         13 Weeks
                                     Ended            Ended
                                   May 2, 1998   April 26, 1997

SALES AND OTHER REVENUE
 Canadian operations               $117,691          $112,110
 Alaskan operations                  27,562            26,492
                              --------------     --------------
                                   $145,253          $138,602
                              --------------     --------------
                              --------------     --------------
Operating profit before amortization
 Canadian operations                 $8,866           $10,235
 Alaskan operations                     666               489
Amortization
 Canadian operations                 (4,009)           (3,809)
 Alaskan operations                    (522)             (503)
                              --------------     --------------
OPERATING PROFIT BEFORE
THE FOLLOWING:                        5,001             6,412
Interest                             (3,537)           (2,814)
Unusual Item (Note 2)               (20,000)                -
(Provision) recovery for
 income taxes                         9,812            (1,271)
                              --------------     --------------

EARNINGS (LOSS) FOR THE PERIOD       (8,724)            2,327

Retained earnings,
  beginning of period                14,430            53,550
Distributions/Dividends              (3,750)           (1,500)
Conversion to Fund capital (Note 3)       -           (52,732)
                              --------------     --------------

RETAINED EARNINGS, END OF PERIOD     $1,956            $1,645
                              --------------     --------------
                              --------------     --------------

EARNINGS (LOSS) PER UNIT             ($0.58)            $0.16

-0- NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1.Accounting Principles

These unaudited consolidated financial statements are based on accounting principles consistent with those used and described in the annual financial statements of North West Company Fund (the "Fund").

2. Unusual Item

The Company recorded unusual charges totalling $20,000,000 ($11,600,000 after deducting related income tax credits of $8,400,000) as a result of a major repositioning of its Canadian operations designed to sharpen the Company's focus on its core markets and improve performance . Of this amount $9,000,000 represented writedowns of discontinued inventory, $7,000,000 was provided for head office and store staff reduction costs and $4,000,000 was provided for other related costs. The earnings per unit before the unusual item for the 13 weeks ended May 2, 1998 was $0.19 reflecting an after tax impact of $0.77 per unit as a result of the transaction.

3. North West Company Fund

Effective March 27, 1997, under the arrangement as described in the annual report, shares of NWC were exchanged on a one-for-one basis for units of North West Company Fund. The share capital and retained earnings of NWC were converted into capital of the Fund as follows: -0-

NWC share capital                   $93,605
Conversion of retained earnings      52,732
Expenses of the arrangement          (1,500)
                                -------------
                                   $144,837
                                -------------
                                -------------

-0- 4. Comparative Amounts

The comparative amounts have been reclassified to conform with the current year's presentation. -0-

CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION
(unaudited, in thousands of Canadian dollars

                                    13 Weeks        13 Weeks
                                     Ended            Ended
CASH PROVIDED BY (USED IN)
Operating Activities
 Earnings(loss) for the period      ($8,724)           $2,327
 Deferred income taxes                 (206)             (410)
 Amortization of bond warrant
  proceeds and interest rate
  fixing payment                       (509)             (509)
 Gain on disposal of capital assets       -              (521)
 Unusual item                        20,000                 -
                              --------------     --------------
 Cash flow                           15,092             5,199
 Changes in non-cash working
  capital components                (14,160)           (1,932)
                              --------------     --------------
Operating activities                    932             3,267
                              --------------     --------------
Investing Activities
 Purchase of capital assets          (3,425)           (7,825)
 Proceeds from sale of capital assets     -             1,281
 Other assets                          (780)            1,149
                              --------------     --------------
 Investing activities                (4,205)           (5,395)
                              --------------     --------------
Financing Activities
 Expenses of the arrangement              -            (1,500)
 Repayment of long-term debt            (95)              (47)
                              --------------     --------------
 Financing activities                   (95)           (1,547)
                              --------------     --------------
Distributions/Dividends              (3,750)           (1,500)
                              --------------     --------------
CHANGES IN CASH POSITION             (7,118)           (5,175)
                              --------------     --------------
Effect of currency translation
 adjustment                           1,314            (1,690)
Cash position, beginning of period  (55,961)          (36,110)
                              --------------     --------------
CASH POSITION, END OF PERIOD       ($61,765)         ($42,975)
                              --------------     --------------
                              --------------     --------------
CASH POSITION IS COMPRISED OF:
 Cash                               $15,383            $8,619
 Bank advances and short-term notes (77,148)          (51,594)
                              --------------     --------------
                                   ($61,765)         ($42,975)
                              --------------     --------------
                              --------------     --------------

-0-

The North West Company is the leading provider of food and everyday products and services to remote communities across northern Canada and Alaska. The Fund trades on the Toronto and Winnipeg Stock Exchanges under the symbol "NWF.UN".

CONTACT: North West Company Fund

Gary Eggertson, 204/ 934-1503

204/ 934-1455 (FAX)

e-mail geggertson@northwest.ca