BCI Announces Second Quarter Results


	BCI Announces Second Quarter Results NEWS RELEASE TRANSMITTED BY CCN - A NEWSWIRE SERVICE OF ITG FOR: BELL CANADA INTERNATIONAL INC. TSE SYMBOL: BI NASDAQ SYMBOL: BCICF JULY 25, 2000 BCI Announces Second Quarter Results MONTREAL, CANADA-- * Record revenues exceed $250 million during second quarter * Key strategic initiatives to increase focus on South America Bell Canada International Inc. ("BCI") today released results for the second quarter ending June 30, 2000. RESULTS FROM OPERATIONS Total subscribers served by BCI's operations increased to 6.34 million as at June 30th, with 390,000 new subscribers added, primarily in Latin America, offset by a reduction of 350,000 subscribers at the Korean PCS provider, Hansol M.com, following its decision in May to eliminate handset subsidies. (On June 14th, 2000, BCI announced an agreement to sell its 21 % interest in Hansol M.com. BCI's second quarter results reflect Hansol M.com's operating results for the entire quarter. The closing of this transaction is expected to be reported in BCI's third quarter results.) BCI's proportionate subscribers (based on BCI's percentage ownership in each of its operations) increased to 1.6 million during the second quarter. Since June 30, 1999, total subscribers have increased 49 % while proportionate subscribers have increased 56 %. Second Quarter 2000 v. First Quarter 2000 Consolidated revenues for the second quarter of 2000 increased 5 % over the first quarter of 2000 to $254 million. On a proportionate basis, BCI's revenues for the second quarter rose 8 % over the prior quarter to $201 million. Revenue growth was attributable to a strong contribution from the Latin American competitive local exchange carrier (CLEC) segment. Consolidated EBITDA improved from negative $9 million in the first quarter of 2000 to break-even for the second quarter. BCI's proportionate EBITDA for the second quarter was negative $13 million, compared to proportionate EBITDA of negative $26 million for the prior quarter. The improvement in second quarter EBITDA was attributable primarily to a greater contribution from BCI's Asian PCS providers offset by early stage losses incurred by the recently launched CLECs in Brazil. BCI reported a net loss of $195 million in the second quarter of 2000 compared to a net loss of $177 million in the first quarter of 2000. The second quarter loss reflects the early stage nature of most of BCI's operations and includes the ongoing accounting by BCI for 100 % of the loss incurred by the Colombian cellular company, Comcel. Second Quarter 2000 v. Second Quarter 1999 Consolidated revenues for the second quarter of 2000 increased 35 % from consolidated revenues of $188 million reported in the second quarter of 1999. The increase in consolidated revenues was attributable primarily to increased revenues generated by BCI's Asian PCS operations and the Latin American CLEC segment. Proportionate revenues for the second quarter of 2000 were 69 % higher than proportionate revenues of $119 million in the second quarter of 1999. The break-even consolidated EBITDA in the second quarter of 2000 was $26 million below consolidated EBITDA in the second quarter of 1999. The reduction is mainly attributable to the recently launched CLECs in Brazil. Proportionate EBITDA in the second quarter of 2000 was $21 million below proportionate EBITDA in the second quarter of 1999. BCI's net loss for the second quarter of 2000 compares to a net loss of $99 million in the second quarter of 1999. On a year-to-date basis, consolidated revenues were $495 million compared to $383 million during the first 6 months of 1999. Consolidated EBITDA was negative $9 million compared to $58 million. BCI's net loss was $372 million compared to $171 million over the corresponding 1999 period. /T/ OPERATING HIGHLIGHTS In Latin America.... * The Brazilian competitive access providers, operating under the common brand name, Vesper, significantly increased their combined subscriber base from 46,000 as at March 31st to 190,000 as at June 30th. With sales and installations now averaging 15,000 per week, Vesper management has now revised upwards its year end target to over 500,000 lines. * BCI's two Brazilian cellular operations (Americel and Telet) served over 610,000 total subscribers at the end of the second quarter of 2000 compared to a combined total of 495,000 at March 31st and 245,000 at the end of the second quarter of 1999. * In June, Comcel of Colombia launched its mobile Internet service in an alliance with Starmedia. * BCI's Mexican CLEC, Axtel, increased its subscriber base 90 % during the second quarter to 109,000. In June, Axtel announced an alliance with Yahoo Mexico to provide a range of Web-based services. In the Asia Pacific region... * The Taiwanese PCS provider, KG Telecom, generated proportionate EBITDA of $8.7 million during the second quarter of 2000 - an increase of 89 % relative to the prior quarter. STRATEGIC INITIATIVES During the second quarter, BCI announced two major agreements: * the formation with two leading North American communications companies, Telefonos de Mexico (Telmex) and SBC of the United States, of a new facilities-based communications company which will serve as the partners' principal vehicle for expansion in South America; * the sale of BCI's 21 % stake in the Korean PCS provider, Hansol M.com. /T/ Effective the beginning of the third quarter, Michael Sabia resigned as BCI's CEO to assume the positions of Executive Vice-President of BCE Inc. and Vice-Chairman of Bell Canada. Through his continuing role as BCI's Vice-Chairman, he will remain a key player in the development of BCI's new South American joint venture with Telmex and SBC. His successor as CEO is BCI's former President and COO, Louis Tanguay. Louis Tanguay concluded: "The second quarter of 2000 was a turning point in the history of BCI, as our team executed key strategic initiatives. The sale of Hansol M.com will enhance our ability to aggressively pursue and secure other growth and value creation opportunities in South America in concert with our partners." Bell Canada International owns and develops advanced communications companies in markets outside Canada, with an increasing focus on South America. A subsidiary of BCE Inc., Canada's largest communications company, BCI is listed on the Toronto stock exchange under the symbol BI, and on the Nasdaq national market under the symbol BCICF. /T/ --------------------------------------------------------------------- Selected Consolidated Financial Information (Unaudited) --------------------------------------------------------------------- Second Quarter 2000 (Cdn$ thousands except per share data) Three months ended Six months ended June 30, June 30, --------------------------------------------------------------------- 2000 1999 2000 1999 --------------------------------------------------------------------- Income Statement and Cash Flow Revenues 253,640 188,040 494,807 383,349 EBITDA (1) (64) 25,607 (9,264) 57,657 Net earnings (loss) applicable to common shares* (194,729) (98,650) (371,818) (171,181) Net earnings (loss) per common share (2) (2.47) (1.25) (4.71) (2.17) * Includes the recording of 100 % of the losses of Comcel effective from May 1999. As at As at June 30, December 31, --------------------------------------------------------------------- 2000 1999 Balance Sheet Total cash and notes receivable Corporate 123,006 109,572 Operating Companies 82,453 151,693 Total assets 3,861,368 3,680,889 Short-term debt Corporate 765,000 511,000 Operating Companies 227,193 185,731 Long-term debt (3) Corporate 160,000 160,000 Operating Companies 2,075,898 1,827,100 Total shareholders' equity 17,568 364,211 --------------------------------------------------------------------- Selected Proportionate Information (Unaudited) (4) --------------------------------------------------------------------- Second Quarter 2000 (Cdn$ thousands except POPs and subscribers) Three months ended Six months ended June 30, June 30, --------------------------------------------------------------------- 2000 1999 2000 1999 --------------------------------------------------------------------- Proportionate POPs (millions) 115.0 170.6 Proportionate subscribers 1,603,910 1,030,936 Proportionate revenue 201,029 118,690 387,536 233,924 Proportionate EBITDA (12,900) 8,475 (39,131) 21,366 --------------------------------------------------------------------- (1) EBITDA means operating earnings before depreciation and amortization. (2) Net earnings (loss) per common share is based on 78.9 million average common shares outstanding for the three and six months ended June 30, 2000 and 78.8 million for the three and six months ended June 30, 1999. (3) Long-term debt includes current portion of long-term debt. (4) Proportionate numbers reflect BCI's percentage ownership interest in each of its operations. Operations which under generally accepted accounting principles are consolidated or equity accounted are proportionately presented on this basis. Prior to June 1st, 1999, KG Telecom was not included as it was accounted for at cost. --------------------------------------------------------------------- BCI Principal Operations --------------------------------------------------------------------- As at June 30, 2000 Equity POPs (Millions) (1) -------------------------- Company (Country) Interest Total Proportionate --------------------------------------------------------------------- Asia Mobile Hansol PCS (Korea) 21.0 % 46.4 9.7 KG Telecom (Taiwan) (2) 20.0 % 21.9 4.4 --------------------------------------------------------------------- 68.3 14.1 Latin America Mobile Comcel (Colombia) (2) 59.1 % 33.0 17.2 Americel (Brazil) 16.3 % 13.4 2.2 Telet (Brazil) 16.3 % 9.6 1.6 --------------------------------------------------------------------- 56.0 21.0 Latin America CLECs Axtel (Mexico) 27.4 % 96.0 26.3 Véspers (Brazil) 34.4 % 123.0 42.3 Canbras Communications (Brazil) (2) 51.4 % 1.2 0.4 Venezuela 49.5 % 22.0 10.9 BV Interativa (Brazil) 45.0 % n/a n/a --------------------------------------------------------------------- 242.2 79.9 --------------------------------------------------------------------- Total 366.5 115.0 --------------------------------------------------------------------- --------------------------------------------------------------------- Equity Subscribers -------------------------- Company (Country) Interest Total Proportionate --------------------------------------------------------------------- Asia Mobile Hansol PCS (Korea) 21.0 % 2,691,397 565,193 KG Telecom (Taiwan) (2) 20.0 % 1,753,959 350,792 --------------------------------------------------------------------- 4,445,356 915,985 Latin America Mobile Comcel (Colombia) (2) 59.1 % 795,478 430,373 Americel (Brazil) 16.3 % 264,358 43,090 Telet (Brazil) 16.3 % 346,677 56,508 --------------------------------------------------------------------- 1,406,513 529,971 Latin America CLECs Axtel (Mexico) 27.4 % 108,559 29,745 Véspers (Brazil) 34.4 % 189,920 65,333 Canbras Communications (Brazil) (2) 51.4 % 166,831 51,484 Venezuela 49.5 % 295 146 BV Interativa (Brazil) 45.0 % 24,990 11,246 --------------------------------------------------------------------- 490,595 157,954 --------------------------------------------------------------------- Total 6,342,464 1,603,910 --------------------------------------------------------------------- --------------------------------------------------------------------- (1) Licenced POPs reflect estimates by BCI. The figures for Canbras Communications represent the estimated number of households in the licenced areas. (2) Proportionate POPs and subscribers for KG Telecom, Comcel and Canbras include equity interests in underlying operating entities. /T/ -30-

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