NETC Announces 2006 Results

SAO PAULO, Brazil, Feb. 2  /PRNewswire-FirstCall/ -- Net Servicos de Comunicacao S.A. (Bovespa: NETC3 and NETC4; Nasdaq: NETC; and Latibex: XNET), the largest Pay-TV multi-service operator in Latin America offering bidirectional broadband internet access (Virtua) and voice services (Net Fone via Embratel) announces today its 2006 financial results.

The Company recorded a strong operating performance in 2006. The Pay TV segment recorded an 18% growth over 2005, closing the year with 1,812,000 subscribers. In 2006, net sales totaled 496,700, 50.6% above the 329,900 sales posted in 2005 and churn rate improved slightly, slowing from 13.8% in 2005 to 13.4% in 2006. Broadband subscriber base practically doubled for the fourth consecutive year, ending the period with 727,000 subscribers versus 366,000 subscribers recorded at the end of 2005. Broadband churn rate was 13.8%, fairly stable in comparison to 2005 and net sales totaled 435,800. Voice services, the Net Fone via Embratel, base ended the year with 181,900 subscribers, representing a 25% penetration over broadband subscribers, while net sales reached 200,200.

Net Revenue reached R $1,936.0 million in the year, 21.5% above the R$ 1,593.1 million recorded in 2005.

Operating costs and SG&A expenses, together, totaled R$ 1,420.6 million versus the R$ 1,143.0 million recorded in the previous year, corresponding to a 24.3% increase.

As a result, in 2006, consolidated EBITDA recorded a 14.5% growth, from R$ 450.1 million in 2005 to R$ 515.4 million in 2006. EBITDA margin in the year dropped from 28% to 27%, as the Company's accelerated growth only took place in the second half of 2005. However, EBITDA before selling expenses grew by 25.3%, from R$ 552.6 million in 2005 to R$ 692.4 million in 2006, confirming that the recorded growth is bringing subscribers that have contributed positively to the solidification of the Company's EBITDA margin. EBITDA margin before selling expenses grew from 35% in 2005 to 36% in 2006.

Earnings before equity result and income tax reached R$ 198.3 million this year, 60.2% above the R$ 123.8 million recorded in 2005.

  Conference Call - TODAY
  English:
  1:00 pm (EST)
  Phone #: [phone]
  ID Code: 8321034

  Portuguese:
  12:00 pm (EST)
  Phone #: [phone]
  ID Code: Net Servicos

  Live Webcast and earnings release: http://www.ir.netservicos.com.br/

DATASOURCE: Net Servicos de Comunicacao S.A.



CONTACT:  For additional information, please contact Net Servicos

Investor Relations: Marcio Minoru, [phone], ,

or Juliana Bajon, [phone], , or Andre

Carvalho, [phone], , all for Net

Servicos de Comunicacao S.A. 



Web site: http://www.ir.netservicos.com.br/ 

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