OPTUS REPORTS SHARP RISE IN REVENUES AND PROFIT

Cable & Wireless Optus today reported a sharp rise in half-year net profit, 43% up on the same period last year.

Profit after tax and minorities for six months ended 30 September 2000 was $153.8 million, which compares with $107.3 million for the same six months last year.

The rise reflected strong revenue growth and tight maintenance of margins. Revenue rose 24% to $2,342.8 million. EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) was $659.2 million, up 24% from $529.6 million for the same period last year. The EBITDA margin rose slightly to 28.1%.

Cable & Wireless Optus Chief Executive Chris Anderson said that for the fourth successive year the company had achieved double digit growth in revenue and profitability.

"Our continued growth in profit shows that we are increasingly reaping the benefits of the investment and operational improvements over the past few years."

"We balance this with investment in the future, for example through funding the start up of joint ventures such as Southern Cross, Virgin Mobile and Optus@Home. Businesses which give us strong market positions for the future."

Major highlights of Cable & Wireless Optus' results for the half-year to 30 September include:

• EBIT (Earnings Before Interest and Tax) up 26 per cent to $200.5 million
• Mobile revenue up 22 per cent to $1,011 million
• Data & Business revenue up 26 per cent to $858 million
• Consumer & Multimedia revenue up 31 per cent to $501 million.

Mobile continued to enjoy dramatic growth, with its half-year revenue exceeding $1 billion for the first time. During the half Optus announced Mobile customer numbers of 3.1 Million - a 39% increase since September 1999. Optus' relative market share against Telstra now stands at 70%, having risen every quarter for the last eight quarters.

Short message service (SMS), a vital bridge to the Mobile data world, has seen explosive growth, with Optus already carrying over 10 million messages a week.

In Data & Business Services, Optus is developing its access mechanism for the future, with data and IP revenues now standing at 40% of the division's revenue. These revenue streams are fuelling the division's growth, jumping 71% on the same period last year.

Consumer & Multimedia showed marked operational improvement while continuing to be the fastest growing Division. The Consumer & Multimedia division is on track to break even at the EBITDA level for the full year.

And, as importantly, the operational improvement reflects a continued focus on capital efficient growth. Capex was down to 31%, from 71% of revenue last year.

The company's broadband network now has 467,000 customers, with 82% taking telephony.

"In again delivering powerful growth in revenue and profit, and sustained margins, the latest half builds on the strengths of the past three years," Mr Anderson added.

"But this year there are very significant milestones as well. We have reprioritised our Capex spend towards our higher margin businesses."

"With the performance of the three Divisions now strong, we announced during the half year that we are conducting a structural and strategic review."

"This will allow us to examine which structures for the three businesses will optimise their already impressive growth prospects and create the greatest value for all shareholders."

For more information:
Stephen Woodhill
Cable & Wireless Optus
Phone: (02) 9342 7850