Cable Satisfaction International Inc. Announces Second Quarter Results for the Period Ended June 30, 1998.

MONTREAL--(BUSINESS WIRE)--Aug. 17, 1998--For the second quarter ended June 30, 1998, Cable Satisfaction International Inc. (Csii) (ME:CSQ.A) pursued its growth since the same period last year.

Moreover, following the end of the quarter, Csii concluded a key transaction. On July 27, Csii acquired an additional 5 percent interest in its subsidiary World Satellite Guadeloupe S.A. (WSG) for a consideration of $780,000. By increasing its interest to 54.997 percent, Csii has gain control of WSG.

Csii is also pleased to announce the nomination of Mr. Graham W. Savage as Chief Executive Officer of WSG. Mr. Savage has 21 years of experience in the cable television and telecommunications industry. He was formerly Vice-President, Finance with Rogers Communications, which includes Rogers Cable Systems, MacLean Hunter and Rogers Cantel.

Mr. Savage is a director of several public companies in Canada, including Canadian Tire Corp. This transaction is subject to regulatory approval and other usual conditions.

Consolidated Results - For the second quarter of 1998, Csii recorded operating revenues of $2.1 million, a 99 percent increase compared with the same period of last year and a 16 percent increase compared with the first quarter of 1998. Loss before depreciation and amortization, interest and income taxes was $265,000, compared with $206,000 for the same period of 1997.

A net loss of $1.9 million was recorded, a result similar to that of the first quarter of 1998, while the second quarter of 1997 had resulted in a net loss of $645,000. For the six months ended June 30, 1998, operating revenues were $3.9 million, compared with $1.9 million in 1997, a 110 percent increase.

Loss before depreciation and amortization, interest and income taxes was $543,000, compared with $828,000 for the same period last year, while net loss increased to $3.8 million compared with $1.7 million in 1997. Despite an improvement in operating results, the increase in net loss is mainly attributable to increased depreciation and amortization costs and higher financial expenses.

These expenses are related to the strong expansion of Csii's telecommunications networks in Portugal and Guadeloupe, as well as changes to the financial structure of the company from 1997 to 1998. The number of basic service subscribers increased 74 percent to 33,163 subscribers as at June 30, 1998, compared to 19,036 as at June 30, 1997.

Guadeloupe - In the second quarter of 1998, construction was slowed by longer than expected administrative procedures for securing of a municipal authorization in the Pointe-a-Pitre region. As a result, marketing efforts were concentrated mainly in the regions already served by WSG.

Although the growth in the number of homes passed was only 2.7 percent compared to the first quarter of the current year, the number of subscribers increased by over 8 percent, testimony to the increasing popularity of cable service in all regions of Guadeloupe.

The number of subscribers increased 48 percent to 20,388 as at June 30, 1998, compared with 13,758 as at June 30, 1997. The increase in subscribers resulted in an over 39 percent penetration rate, compared with 31.7 percent a year earlier. In terms of financing, loan negotiations with large European banks are still underway. Csii's management is confident that financing will be secured before year-end.

For the six months ended June 30, 1998, operating revenues and earnings before interests, taxes, depreciation and amortization increased by 62 percent and 116 percent respectively to $2.5 million and $902,000, compared with $1.5 million and $418,000 in 1997. Gross margin for the same period increased to 36 percent from 27 percent, underlining the efforts to control operating expenses and the increase in operating revenues.

WSG recorded a net loss of $125,000 for the first six months of 1998, compared with net earnings of $79,000 in 1997. The loss in 1998 is mainly attributable to a currency exchange loss of $340,000 resulting from conversion of financial statements into Canadian dollars from French francs.

Portugal - Construction efforts in the second quarter of 1998 were concentrated mainly on the completion of three new head ends located in three regions of Portugal: Esterreja in the north, Castello Branco in the east and Beja in the south. These three new head ends will allow to reach approximately 50,000 new homes in the next few months.

The number of subscribers increased to 12,775 as at June 30, 1998, compared with 5,278 as at June 30, 1997, a 142 percent increase. On May 26, 1998, Cabovisao S.A., Csii's exclusive subsidiary in Portugal, signed a credit facility of up to 3 billion escudos (approximately $24 million) with a banking consortium including Caixa Geral de Depositos S.A., Portugal's largest financial institution, and Banco Fonsecas e Burnay S.A., a subsidiary of Banco Portugues de Investimento, S.A. (BPI).

This agreement is conditional upon certain criteria related to subscriber growth as well as the meeting of certain financial ratios by the subsidiary. Operating revenues for the six months ended June 30, 1998 almost quadrupled to $1.3 million, compared with $267,000 in 1997.

Loss before depreciation and amortization, interest and income taxes for the six-month period was $471,000, compared with $477,000 in 1997, while net loss was $1.9 million compared with $1.2 million in 1997.

Csii is a Canadian cable operator that builds and operates hybrid coaxial fiber networks in the international cable TV and telecommunications markets through its subsidiary companies located in various foreign countries. Subordinate voting shares of Csii are listed under ticker symbol "CSQ.a" on the Montreal Exchange.

Csii is solely responsible for the contents of this press release. No regulatory body having jurisdiction over the securities of Csii has approved or disapproved its contents.

    CONTACT:  Cable Satisfaction International Inc.
               Real Laflamme, 450/468-4485
               450/468-5957  (FAX)
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