S.E.A. Multimedia Ld - Interim Results

RNS No 3437a
S.E.A. MULTIMEDIA LIMITED
2nd September 1997

                                       
                           S.E.A. MULTIMEDIA LIMITED
                                       
              INTERIM RESULTS FOR THE SIX MONTHS TO 30 JUNE 1997

CHAIRMAN'S STATEMENT

Introduction

1997 has so far been a year of transition and investment, laying the
foundation for future development and rapid growth.   It is therefore expected
that the figures for 1997 will reflect the ongoing cost of these developments.
Furthermore, most of the assets relating to the Kidum acquisition will be
depreciated in 1997, while most of the income from its game business will be
recognised in 1998.  As a result, losses are expected to continue into the
second half of 1997.

Current developments

S.E.A. Multimedia has embarked on a period of major growth in the areas of
high-end games publishing, Internet-related technologies and digital sport
publishing.  During 1997, the company negotiated a series of important
marketing agreements with prominent companies in our chosen areas as well as a
strategic acquisition of a game developer.  Below is a summary of the recent
agreements that have been signed.

In March 1997, S.E.A. signed an agreement with Mpath, a
leading US game network company, to release @Range, S.E.A.'s
first massively multiplayer game, on its Mplayer network.
@Range will be launched this fall.  S.E.A. is currently
developing additional titles to be launched in 1998, and is
in negotiations with US, European and Japanese game
publishers and game network companies for partnerships and
distribution deals. S.E.A. has recently signed an agreement with Matsushita
Panasonic to produce a DVD video, Olympic Century, which is
an official licensed product of the International Olympic
Committee.  The product will be translated into 4 languages
and bundled with DVD-video players for the pan-European
market.  S.E.A. is one of the first companies in the world
to develop products for the DVD-video platform.

The 1998 Olympic Winter Games will be held in Nagano, Japan,
this coming February, and S.E.A. has signed an agreement
with the Japanese company, Dynaware, to distribute its
official Winter Olympic Web CD-ROM Winter Games.  The
product will be localised into Japanese and will be
available in time for the opening of the Games.  We have
also signed agreements in Europe, with more deals expected
to be signed in the future.  S.E.A. intends to widen its
activity in sport content over the next 12 months.

On the 28th July, S.E.A. acquired the business and assets of
Kidum Multimedia Ltd., a subsidiary of the Israeli company
Kidum Promotion and Publishing.  The consideration for the
acquisition was the issue of an additional 2,235,165
Ordinary shares in S.E.A. to Kidum and Kidum employees,
representing nine per cent of the enlarged capital of
S.E.A..  The vendors have agreed to retain their shares in
S.E.A. for a period of at least one year since, in their
view, the current market valuation of S.E.A. does not
reflect the future potential of the company.

Kidum recently launched a new game called Virus and has
signed major distribution agreements with Telstar for
European territories, Sirtech in the US and Imagineer in
Japan.  S.E.A. will have the benefit of utilising Kidum's
advanced 3D technology for the Internet and other
applications.

Outlook

The above strategic acquisition and development are in line
with S.E.A.'s declared policy of accelerating the
development and marketing of new products and technologies.
The company believes it will show high returns for
shareholders from 1998 onwards, when S.E.A. will begin to
see results confirming its position as an industry leader in
its chosen fields.

Tal Barnoach
C.E.O. and Chairman

Enquiries:     Tal Barnoach, C.E.O. and Chairman
               S.E.A. Multimedia Limited
Telephone:     [phone]

               Michael Sandler/Tim Robertson
               Hudson Sandler Limited
Telephone:     [phone]

GROUP PROFIT AND LOSS ACCOUNT
FOR THE SIX MONTHS ENDED 30 JUNE 1997

                       Six Months     Three Months
                            Ended            Ended        Year Ended
                          30 June          30 June       31 December
                     1997    1996       1997    1996           1996
                         (unaudited)      (unaudited)      (audited)
                      US$        US$     US$      US$           US$

Sales             170,217  2,289,387 122,688 2,110,806    3,940,612

Cost of sales     676,046  1,268,645 407,092 1,116,880    2,151,312
                  -------  -------   -------  -------      ------- 
Gross (loss)
 profit          (505,829) 1,020,742 (284,404) 993,926    1,789,300

Research and development
 expenses         168,781     96,162   97,055   46,419      150,325

Marketing and selling
 expenses         602,028    178,915  352,712  122,487      502,448

General and administrative
 expenses         341,536    320,168  169,151  202,461      679,920
                   ------     ------   ------   ------       ------
Total operating
 expenses       1,112,345    595,245  618,918  371,367    1,332,693
                  -------     ------   ------   ------      -------
Operating income
 (loss)        (1,618,174)   425,497 (903,322) 622,559      456,607

Financing income
 (expenses), net    6,027     28,902   (9,831)  43,535      256,459
                  -------     -------   -------  -------    -------
Net income (loss) for
 the period    (1,612,147)   454,399 (913,153) 666,094      713,066
                   ======     ======   ======   ======       ======

Earnings (loss)
 per 100 shares
 at Nis 0.01 each   (6.99)      2.27    (3.96)    3.22         3.30
                   ======     ======   ======   ======       ======
Weighted average number
 of 100 shares    230,589    200,590  230,587  206,731      215,937
                   ======     ======   ======   ======       ======

GROUP BALANCE SHEET
AT 30 JUNE 1997                     30 June            31 December
                               1997       1996                1996
                                   (unaudited)            (audited)
                                US$        US$                 US$
CURRENT ASSETS

Cash and cash equivalents 1,242,982  3,595,333           2,405,851
Trade receivables           747,848    883,334           1,291,332
Prepaid expenses            632,782    552,266             435,638
Other current assets         32,713     98,750              37,956
                            -------    -------            --------
Total current assets      2,656,325  5,129,683           4,170,777

FIXED ASSETS

Cost                        638,766    412,702             569,848
Less - accumulated
 depreciation                184,388    71,099             123,148
                             -------    -------             -------
Total fixed assets           454,378   341,603             446,700

OTHER ASSETS

Cost                         749,117   540,690             749,117
Less - accumulated
 amortisation                462,509   134,877             224,993
                             -------   -------             -------
Total other assets           286,608   405,813             524,124
                             -------   -------             -------
                           3,397,311 5,877,099           5,141,601
                              ======    ======              ======

CURRENT LIABILITIES

Short-term bank credit
 and current maturities        2,525    38,276             207,099
Advanced payments from
 customers                    27,000   233,761                   -
Accounts payable             372,320 1,085,034             358,970
Other current liabilities    165,215   181,406             153,693
                             -------   -------             -------
Total current liabilities    567,060 1,538,477             719,762

LONG-TERM LIABILITIES

Loans, net of current
 maturities                        -   183,083                   -
Liabilities for severance
 pay                          76,766    48,574              56,207
                             -------   -------              ------
Total long-term liabilities   76,766   231,657              56,207

SHAREHOLDERS' EQUITY

Share capital                 70,075    70,075              70,075
Share premium              4,038,971 4,038,971           4,038,971
Retained earnings
 (Accumulated deficit)    (1,355,561)   (2,081)            256,586
                            --------    -------             ------
Total shareholders'
 equity                    2,753,485  4,106,965          4,365,632
                            --------    -------            -------
                           3,397,311  5,877,099          5,141,601
                              ======     ======            ======

GROUP CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 1997

                         Six months       Three months     Year ended
                      Ended 30 June      ended 30 June    31 December
                       1997    1996       1997      1996         1996
                        (unaudited)          (unaudited)     (audited)
                        US$     US$        US$       US$          US$

CASH FLOWS FROM  OPERATING
 ACTIVITIES

Net (loss) income
                (1,612,147)  454,399  (913,153)   666,094    713,066

Adjustments to reconcile net income
 (loss) to net cash used in operating
 activities:

Expenses not affecting operating cash flows:
Increase in liabilities
 for severance
 pay               20,559    20,882     (3,722)     6,683     28,515
Depreciation and
 Amortisation     298,762   118,255    223,342     60,327    260,421
                   ------    ------     ------     ------     ------
                  319,321   139,137    219,620     67,010    288,936

Changes in operating assets and liabilities:
Increase(decrease)
 in trade
 receivables      543,484  (640,039)   158,782   (542,171)(1,048,037)
Increase(decrease)
 in prepaid
 expenses        (197,144)  (223,794)   52,222     38,256   (107,166)
Increase(decrease)
 in other current
 assets             5,243    (77,888)    1,337    (68,283)   (17,094)
Increase(decrease)
 in advanced payments
 from customers    27,000    (16,239)   27,000   (195,840)  (250,000)
Increase(decrease)
 in other
 creditors         11,522    527,671   (91,574)   451,772    173,619
Increase in
 accounts payable  13,350    429,494   (24,287)   391,736     29,769
                   ------     ------    ------     ------     ------
Net cash (used)
 in operating
 activities      (889,371)   592,741  (570,053)   808,574   (216,907)

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of fixed
 assets           (68,924)  (151,747)  (32,421)  (104,613)  (308,894)
Increase in other
 assets                 -          -         -          -   (208,427)
                    ------   -------    -------    -------   -------
Net cash used in
 investing
 activities       (68,924)  (151,747)  (32,421)  (104,613)  (517,321)

CASH FLOWS FROM FINANCING
 ACTIVITIES

Proceeds from
 share capital
 issue, net            -   3,327,939         -  3,327,939   3,327,939
Short-term bank
 credit, net    (204,574)   (146,467)    2,525   (417,179)   (141,830)
Long-term loans received
 from related
 parties              -            -         -       (406)         -
Repayment of
 long-term
 loans, net           -      (30,068)        -    (20,675)   (48,965)
                -------       -------     ------   -------     -----

Net cash provided by (used in)
 financing activities
               (204,574)   3,151,404      2,525  2,889,679 3,137,144
                 ------     --------      -----   -------   --------

INCREASE(DECREASE) IN CASH
 AND CASH
 EQUIVALENTS (1,162,869)   3,592,398   (599,949) 3,593,640  2,402,916

CASH AND CASH EQUIVALENTS AT
 BEGINNING OF
 THE PERIOD   2,405,851        2,935  1,842,931      1,693      2,935
               --------       -------   --------     ------    -------

CASH AND CASH EQUIVALENTS
AT END OF
 THE PERIOD   1,242,982    3,595,333  1,242,982  3,595,333   2,405,851
                ======       =======    =======    =======     =======

STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

                                                 Retained
                                                 Earnings
                           Share        Share  (Accumulated
                         Capital      Premium     Deficit)   Total
                             US$          US$         US$      US$
Audited:

Balance at 31 December 1995  832      780,275    (456,480) 324,627

Distribution of bonus
 shares                   58,176      (58,176)          -        -

Shares issued             11,067    3,316,872           - 3,327,939

Net profit for the year        -            -     713,066   713,066
                          ------       ------       -----    ------
Balance at 31 December
 1996                     70,075    4,038,971     256,586  4,365,632
                          ======       ======      ======     ======

Unaudited:

Balance at 31 December 1995  832      780,275    (456,480)   324,627

Distribution of bonus
 scheme                   58,176      (58,176)          -          -

Share issued              11,067    3,316,872           -  3,327,939

Net income for the period      -            -     454,399    454,399
                          ------      -------      ------     ------
Balance at 30 June 1996   70,075    4,038,971     (2,081)  4,106,965
                          ======       ======      ======     ======

Balance at 31 December
 1996                     70,075    4,038,971    256,586   4,365,632

Net loss for the period        -            - (1,612,147) (1,612,147)
                           ------     -------   --------     -------
Balance at 30 June 1997    70,075   4,038,971 (1,355,561)  2,753,485
                           ======      ======     ======      ======

Balance at 1 April 1996       832     780,275   (668,175)    112,932

Distribution of bonus
 share                     58,176     (58,176)         -          -

Shares issued              11,067   3,316,872          -  3,327,939

Net profit for the period       -           -    666,094    666,094
                           ------    --------     ------    -------
Balance at 30 June 1996    70,075   4,038,971     (2,081) 4,106,965
                           ======      ======     ======     ======

Balance at 1 April 1997    70,075   4,038,971   (442,408) 3,666,638

Net loss for the period         -           -   (913,153)  (913,153)
                           -------     -------    -------    -------
Balance at 30 June 1997    70,075   4,038,971 (1,355,561) 2,753,485
                           ======      ======     ======     ======


NOTES 1 - GENERAL

A.   The interim financial statements for the six month
     period and three months period ended 30 June 1997
     (hereinafter - "the interim financial statements") are
     presented in accordance with generally accepted
     accounting principles for interim financial statements.
     In the opinion of the management, the interim financial
     statements reflect all adjustments (consisting solely
     of normal recurring accruals) necessary for the fair
     presentation of the results for the period.  The
     generally accepted accounting principles applied in the
     preparation of the interim financial statement are
     consistent with those applied in the preparation of the
     annual financial statements.  Operating results for the
     three and six month period ended 30 June 1997 are not
     necessarily representative of the results of operations
     for the full year.

B.   These financial statements should be read in
     conjunction with the audited financial statements of
     the Company as of 31 December 1996 and the accompanying
     notes.  Copies of the audited financial statements are
     available from the Company's registered office at 4
     Harechev Street, Tel Aviv, Israel and at the offices of
     the Company's nominated adviser and broker, Raphael
     Zorn Hemsley Limited, Cheapside House, 138 Cheapside,
     London EC2V 6BJ.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies applied in the
preparation of these interim financial statements are
consistent with those applied in the audited annual
financial statements as of 31 December 1996.

NOTE 3 - PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts
of the Company and TAPWARE TECHNOLGIES LTD, a subsidiary
company wholly-owned.
Intercompany balances and transactions have been eliminated.

NOTE 4 - POST BALANCE SHEETS EVENT

On 28th July 1997, the Company purchased from KIDUM
MULTIMEDIA (1995) LTD, all of its assets, products and
rights in consideration for 2,235,165 newly issued shares of
the Company.

Review report by the Auditors
to S.E.A. Multimedia Limited

At your request, we have reviewed the accompanying
consolidated balance sheet of S.E.A. Multimedia Ltd, as at
30 June 1997, and the related consolidated statements of
operations the consolidated statement of changes in
shareholders equity and cash flows for the three month
period and six month period three ended.  Our review was
performed in accordance with the procedures prescribed by
the Institute of Certified Public Accounts in Israel.  Inter-
alia, these procedures include:  reading the above mentioned
financial statements, reading minutes of meetings of the
board of directors and its committees, and making inquiries
of company officers responsible for financial and accounting
matters.

Since our review was limited in scope and does not
constitute an audit in accordance with generally accepted
auditing standards, we do not express an opinion on the
above mentioned condensed consolidated financial statements.

During our review, nothing came to our attention that
indicated that significant adjustments should be made in the
aforementioned consolidated financial statements in order
for them to be considered as having been prepared in
accordance with generally accepted accounting principles.

R Goldberg & Co CPA
Certified Public Accountants (Isr.)


END