3U TELECOM AG achieves significant increase in sales in Q2 2005

Marburg, August 8, 2005. In the second quarter 2005 the 3U group generated sales of 31.34 mn EUR. This corresponds to an increase of 4.66 mn EUR or 17.5% compared to the first quarter 2005 and an increase of 5.08 mn EUR to the comparable quarter of the previous year (26.26 mn EUR). The company’s accumulated sales in the first half year amount to 58.01 mn EUR, which reflects an increase of 13.59 mn EUR compared to the same period last year. Sales in the segment “broadband/IP” were at 9.23 mn EUR, as expected a slight decline (9.45 mn EUR in Q1 2005). In the fixed-line segment sales rose by 4.87 mn EUR on a quarterly basis and by 6.23 mn EUR in comparison to the same quarter of the previous year to 22.10 mn EUR. The significant increase in sales within this segment results from an improvement in the wholesale business, an increase in sales of the subsidiary fon4U and an offensive pricing strategy of OneTel, as part of the sales and marketing strategy, which was established by the end of last year.

Net loss of the 3U group amounts to -5.09 mn EUR in Q2 2005 and is almost unchanged compared to the first quarter 2005 (-5.14 mn EUR). The half year result corresponds to earnings per share of -0.22 EUR (previous year: -0.30 EUR). Net loss is affected negatively by 0.5 mn EUR resulting from the rejected control and profit transfer agreements in the course of this year’s ordinary annual shareholder meeting. The executive board expects that the control and profit transfer agreements to be proposed again by the administration in an extraordinary annual shareholder meeting in Q4 2005 shall be approved due to the changed shareholder structure. Such approval would have a positive effect on earnings in the forementioned amount within this fiscal year.

As expected cash and cash equivalents have declined slightly from 37.66 mn EUR (March 31, 2005) to 36.72 mn EUR on June 30, 2005.

EBITDA of the group amounts to 1.16 mn EUR in the second quarter, which corresponds to a decline of 0.14 mn EUR compared to the first quarter 2005. EBITDA for the first half year of 2005 amounts to 2.46 mn EUR (previous year: 3.17 mn EUR).

A positive development of EBITDA could be achieved with an increase of 0.20 mn EUR to 2.02 mn EUR in the segment “broadband/IP” compared to the first quarter 2005. Due to the optimized cost management the EBITDA margin in this segment could be improved to 20.6% in the first half of this year.

In contrast, EBITDA in the fixed-line segment amounting to -0.86 mn EUR (Q1 2005: -0.52 mn EUR) has been affected negatively by the offensive pricing strategy, the implementation of new sales and marketing structures as well as the launch of marketing campaigns in the course of the second quarter 2005.

It must be considered that the financial effects regarding the improvements resulting from the renegotiated contractual agreements with the fiber supplier GasLINE, reported on July 28, 2005, are not yet reflected in the above figures. These will become effective in the third quarter 2005.

The full half year report in accordance with IFRS will be published on August 15, 2005.


Ulrich Wiehle
Tel.: 06421-999 1200
Fax: 06421-999 1111
Neue Kasseler Str. 62 F
35039 Marburg
ISIN: DE0005167902
WKN: 516790

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