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Newcall Reports First Full Year Profit

Newcall Group Financial Results For The Year Ended 31 December 2002

Newcall Reports First Full Year Profit

AUCKLAND 17 MARCH 2003: Newcall Group Limited has for the first time ever reported a profit for a full year’s activity. The group has moved from an operating deficit of $3.251 million in 2001 to $1.865 million profit for the year ending 31 December 2002.

Total revenue for the group rose to $22.568 million ($19.802), which includes a $527,000 foreign exchange gain following the conversion of all foreign debt from US dollar to New Zealand dollar denominated debt.

This is the first time that NGL has reported trading in the black since it acquired The New Zealand Salmon Company Limited in October 1999 and launched on the NZSE as Newcall Group Limited. It is also the first profit for NZ Salmon since 1995.

NGL chairman, Jim Bracknell, said no dividend would yet be paid to shareholders, instead the profit would be used to further reduce group debt. “By the end of June we anticipate all debt will be repaid or capitalised and then Newcall will be debt free,” he said.

While the majority of NGL’s revenue during the year came from Internet Service Provider, Iprolink Limited, and electricity reseller, Energy Online Limited (EOL), Mr Bracknell said it was decided to sell off EOL to Genesis Power in order to protect shareholders against exposure to the uncertainties of the electricity wholesale spot market.

Explaining, he said that once EOL’s electricity supply contract with National Gas Corporation was completed, it had been impossible to find another electricity supplier willing to offer a wholesale contract which provided protection from spot market pricing, even though EOL was growing rapidly and had a customer base exceeding 19,000 when sold.

“We simply could not expose our shareholders to the risk of selling long term electricity contracts at a competitive fixed price when our wholesale terms would have been based on the spot market,” he said. “We used the proceeds from the sale of EOL to clean up the group balance sheet which will benefit our shareholders in the long term.”

Mr Bracknell said EOL’s departure represented an important step in NGL’s ongoing transition to an IT focused company led by Iprolink and specialist utility billing and CRM subsidiary, Newcall International Limited.

Iprolink, he said had continued to perform well, due in part to a major restructuring and cost cutting exercise, necessary in the light of the general downturn that impacted ISPs worldwide.

“Not only have we managed to protect Iprolink’s profitability, we have also been able to ensure that it will be able to take advantage of the growing emergence of broadband technology in New Zealand.”

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