"It's not the time to issue big dividends when your bottom line drops," Barkai said.

One significant shareholder said the results were in line with market expectations. "I had expected headline earnings to be down," the shareholder said.

"It was due to factors such as the purchase of African Harvest, the sale of Cadiz's JSE shares and foreign exchange changes."

This was the first period in which Cadiz's 2006 acquisition of African Harvest was included for a full financial cycle, and it was part of what caused Cadiz's results to seesaw from a 41% annualised increase in revenue to a 46% drop in annualised net income from investments.

Barkai said there were two important aspects to the African Harvest acquisition. One was the short-term financial effect, and the other was the longer-term strategic effect.

"Financially, we would have liked the income from African Harvest to be higher, but we're happy that we've done the right thing. We have increased the influence of our retail arm, we've been hurt on the long-

only side, but strategically it's still a good buy," Barkai said.

However, the business was healthy when it came to cash generation. With double the amount of cash in the pot, up to R124,5m by year-end, Barkai said the company had been looking at a few acquisitions in the past 12 months. It had done nothing specific yet, and might not unless it came across a particularly good opportunity.

In February last year and this year the company allocated what Barkai described as its regular share option awards. He said a charge of R10m went through Cadiz' income statement, and some options were out of the money, which meant the amount it would cost to buy the option would be more than the share is trading at.

These option allocations were not based on performance, contrary to best-practice thinking, but were used to retain and sometimes attract staff.

While Barkai thought market conditions might not be conducive to growth in the short term, he said yesterday he had no idea what would happen in the next six months, politically or with the markets. "It's probable interest rates will run and oil will run, although I doubt to $200 a barrel. But it will have a significant effect on the economy, creating nervous investors and consumers who are buying less and that does affect us."

Barkai's goal was to focus on making sure that when the cycle turned Cadiz was in position to catch the trend. He said the company was doing this by strengthening its investment process and style, launching a prime brokerage, going into fundamental research and creating new unit trusts.

"We're optimising so that when the rain starts, the pots are all in the right place."

-- Denied Metropolitan's motion to strike the request for a jury trial, so that a jury of Southern California citizens will now have the opportunity to review the facts in the case and evaluate Metropolitan's testimony in court;

-- Denied Metropolitan's motions to exclude the testimony of an expert witness, who has valued Cadiz's damages at between $397 - $673 million.

-- Denied Metropolitan's motion to exclude evidence of damages resulting from its failure to accept a right-of-way grant offered for the Cadiz Program and its failure to certify the Final Environmental Impact Report for the Cadiz Program.

Stephen Mick, Cadiz's attorney and partner at Akin Gump Strauss Hauer & Feld LLP, stated, "We are pleased that this matter is going to trial before a jury. We look forward to the opportunity to hold Metropolitan accountable for breaching its fiduciary obligations to Cadiz and for denying southern Californians a secure water supply at a time when consumers are being forced to pay more for less water."

Richard Stoddard, CEO of Cadiz Real Estate LLC, commented, "We are committed to helping California with its long-term water supply needs. California's economy cannot grow without stable water supplies, which is why state law now requires future development to have proven and secure supplies. As the state debates construction of controversial aboveground reservoir projects, the Cadiz Program could provide an immediate efficient, cost-effective, and environmentally sound alternative. Had the Cadiz Program been built in 2002 under the partnership with Metropolitan, it would be delivering much needed dry-year supplies now, during our current drought, and could also be utilized to help manage the current crisis on the Bay Delta."

Originally proposed in 1997, the Cadiz Program would have built and operated facilities in eastern San Bernardino County for aquifer storage of imported Colorado River water available during wet years, and for delivery of previously stored Colorado River water and indigenous groundwater for use within Metropolitan's Southern California service area during droughts, emergencies, and other periods of need.

In September 2001, following four years of environmental review, a Final Environmental Impact Statement ("FEIS") and Final Environmental Impact Report ("FEIR") were issued by the U.S. Bureau of Land Management and Metropolitan, in collaboration with the U.S. Geological Survey and the National Park Service.

The FEIS/FEIR included one of the most comprehensive groundwater monitoring and management plans ever proposed in California to ensure protection of critical resources in and surrounding the Cadiz Program area. On August 29, 2002, the U.S. Department of the Interior ("DOI") issued a Record of Decision ("ROD"), the final step in the federal environmental review process. The ROD included approval of the FEIS for the Cadiz Program and offered a right-of-way grant for the Project's conveyance pipeline and electrical transmission line.

However, in October 2002, Metropolitan's Board of Directors decided not to proceed with the Program, declined to accept the right-of-way grant authorized by the DOI, and declined to consider the FEIR, which was the final step in the California Environmental Quality Act ("CEQA") process. As a result, no other public agency or private party could move forward with implementation of the program.

In April 2003 Cadiz filed a claim against Metropolitan seeking compensatory damages for Metropolitan's failure to make these entitlements available to Cadiz. When settlement negotiations failed to produce a resolution, Cadiz filed the lawsuit against Metropolitan on November 17, 2005.

Founded in 1983, Cadiz Inc. is a publicly held land and water resource development firm. The Company owns more than 45,000 acres of land with substantial water resources in eastern San Bernardino County, California. Further information on the Company can be obtained by visiting our corporate web site at www.cadizinc.com.

This release contains forward-looking statements that are subject to significant risks and uncertainties, including statements related to the future operating and financial performance of the Company and the financing activities of the Company. Although the Company believes that the expectations reflected in our forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Factors that could cause actual results or events to differ materially from those reflected in the Company's forward-looking statements include the Company's ability to maximize value for Cadiz land and water resources, the Company's ability to obtain new financing as needed, and other factors and considerations detailed in the Company's Securities and Exchange Commission filings.

SOURCE: Cadiz Inc.

Cadiz Inc.
Courtney Degener, Investor Relations Manager
213-271-1600
or
Mercury Public Affairs
Laura Braden / Adam Mendelson
213-880-4636