Jazztel plc Announces First Quarter 2001 Results

Revenue Grows 108%



Apr 26, 2001, 01:00 ET from Jazztel p.l.c.

    MADRID, Spain, April 26 /PRNewswire/ -- Jazztel p.l.c. (Nasdaq:   JAZZ),
 (Easdaq: JAZZ) (and the Nuevo Mercado in Spain: JAZ), the leading pan-Iberian
 competitive provider of broadband communication services, today announced
 results for the first quarter ended 31st March 2001.  Amounts are presented in
 Euros and in accordance with US GAAP.
 
     Highlights of the Quarter
 
     Financial
     * First quarter revenues grew to Euro 46.6 million, an increase of 30.5%
       from the fourth quarter of 2000 and 108% over the same period last year.
 
     * Gross margin improved to positive Euro 7.6 million, an increase of 35.7%
       over the fourth quarter and compared to the negative Euro 0.7 over the
       first period last year.
 
     * Adjusted EBITDA, improved from negative Euro 34.9 million in the fourth
       quarter of 2000 to negative Euro 26.8 million in the first quarter
       of 2001.  As a percentage of revenue, adjusted EBITDA improved from
       negative 88.5% in the fourth quarter of 2000, to negative 57.5% in the
       first quarter of 2001.  EBITDA break-even continues to be expected for
       the second half of 2002.
 
     * In February, Jazztel sold the remaining stake of its T-Online holdings,
       received in the sale of Yacom.  Total proceeds of this transaction
       amounted to Euro 281 million.
 
     * In April 2001, Jazztel entered into a Euro 200 million credit facility
       which gives the Company over Euro 840(1) million of available cash and
       secures the total financing of Jazztel's business plan until it is cash
       flow positive.
 
     Operational
     * Total traffic on the Jazztel network rose to 747 million minutes in the
       first quarter of 2001, an increase of 24.9% compared to the last period
       in 2000 and a 184% increase over the same period of 2000.
 
     * Connection of 362 new sites to Jazztel's fiber network, increasing the
       number of provisioned sites to 943, a growth of 62.3% from the previous
       quarter, exceeding initial expectations.
 
     * Signing up of 528 new direct access customers bringing the total of
       contracted on net customers to 1,786.
 
     * Expansion of the local area network to 2,092 km, an increase of 361 km
       from the previous quarter.
 
     * Completion of the Spanish backbone through the deployment of the
       Northwest ring with 1,496 km of additional operational fiber.  Total
       backbone now comprises 5,733 km.
 
     * Agreement with ACEVAS (Spanish Association of Volkswagen, Audi and
       Skoda's car dealerships) in order to provide fixed telephony and data
       transmission services to the 250 affiliated car dealerships throughout
       Spain.
 
     (1) Includes high yield bonds, restricted cash for high yield interest
         payments, full drawdown of the Euro 175 million credit facility and
         Euro 70 million of vendor financing under negotiation.
 
     Other significant events to date
     In January, Jazztel closed the acquisition of 87.2% of Adatel, a
 Madrid-based telecom's systems integrator for large and medium-sized
 businesses in Spain.
     In April, Jazztel closed the acquisition of 99,93% of Centro de Calculo
 Sabadell (CCS), a developer and integrator of information systems for
 businesses, and completed its new management structure with the appointment of
 Joaquim Molins as Chairman, Javier Cuesta as Vice-Chairman, Jordi Malapeira as
 CEO and Josep Rof as COO.  Joaquim Molins was also appointed board member of
 Jazztel Plc.
 
     Financial Statistics
 
     Euro             1st          4th          1st        1st          4th
     (Million)     quarter      quarter      quarter    quarter %    quarter
                      2000         2000         2001     Growth    %  Growth
 
     Revenues         22.4         35.7         46.6         108%       30.5%
     Gross Margin    (-0.7)         5.6          7.6         n.a.       35.7%
     % of sales      -3.1%        15.6%        16.3%         n.a.        n.a.
     Adjusted
      EBITDA (a)    (-34.9)      (-31.6)      (-26.8)       23.2%      -15.2%
     % of sales    -155.8%       -88.5%       -57.5%         n.a.        n.a.
     Capex            59.5        100.0         54.2        -8.9%      -45.8%
 
 
     (a) Excludes impact of non-cash accounting charges for option assignments
         of Euro 1.4 million in the first quarter of 2000, Euro 8.4 million in
         the fourth quarter of 2000 and Euro 2.4 million in the first quarter
         of 2001
 
     Operational Statistics
 
                       1st          4th          1st        1st          4th
                   quarter      quarter      quarter    quarter %    quarter
                      2000         2000         2001     Growth    %  Growth
 
     Network Deployment
       Local access km
        completed      580        1,731        2,092      260.7%        20.9%
       Backbone km
        completed    4,220        4,237        5,733       35.8%        35.3%
     Direct Access
       Direct access
        human
        resources       80          165          165*     106.3%           0%
       Contracts
        Signed         110        1,258        1,786      1,524%        42.0%
       Customer sites
        provisioned     30          581          943    3,043.3%        62.3%
     Indirect Access
       Number of
        customers  487,300      694,000      708,763       45.4%         2.1%
       Number of
        lines      802,900    1,135,716    1,157,383       44.2%         1.9%
     Internet & Value Added Services
       Active Jazznet
        customers    7,400        5,893        7,546          2%        28.1%
       ADSL active
        customers       52          467          594    1,042.3%        27.2%
     Carrier Services
       Traffic Termination
         contracts      12           28           34      183.3%        21.4%
       Wholesale capacity
        contracts        6           17           18        200%         5.9%
     Minutes of Traffic
      (millions)       284          598          747        163%        24.9%
     Headcount**       616          738          806       30.8%         9.2%
 
     *   Includes sales force (116) and technical staff (49)
     **  Excluding Adatel
 
 
     Summary of Operations
     The Jazztel Group had total revenues of Euro 46.6 million for the first
 quarter of 2001, a growth of 30.5% from the Euro 35.7 million for the last
 quarter of 2000.  Gross margin was positive Euro 7.6 million in the first
 quarter of 2001, a growth of 35.7% from the Euro 5.6 million for the last
 quarter.  Adjusted EBITDA losses for the first quarter of 2001 have improved
 to negative Euro 26.8 million, compared to negative Euro 31.6 million for the
 last quarter of year 2000.  Adjusted EBITDA as a percentage of sales improved
 to negative 57.5% for the first quarter of 2001 up from negative 88.5% in the
 last quarter of year 2000.
     Antonio Carro, Chief Executive Officer of Jazztel, declared:  "The first
 quarter of year 2001 has seen a steady growth of our business as we have
 continued executing successfully on our Strategic Plan.  In fact, we are
 seeing significantly less competitive pressure in nearly all our business
 lines due to difficult financial market conditions, which gives us the chance
 to extend our first mover advantage.  This factor, paired with the fact that
 we have a fully funded business plan, continues to reinforce our competitive
 position as the leading alternative provider of high bandwidth data, Internet
 and voice services for small and medium size businesses across Spain and
 Portugal.  The successful signing of new large contracts to offer broadband
 telecommunications services to sectorial associations and the continuing
 buildout of our local area network coupled with the excellent pace of new
 direct customers signed make us feel very confident about the future."
     Regarding the financial evolution of the company, Antonio Carro added:
 "This first quarter has confirmed the strong growth of our revenues, while at
 the same time improving our operating profitability.  The continuing positive
 evolution of the Gross Margin for the quarter, together with tight control of
 the SG&A expenses, allow us to be confident on reaching positive EBITDA in the
 second half of 2002 as we have planned."
 
     Major Operational Achievements
     In the first quarter of 2001 Jazztel has continued to implement its direct
 access strategy.  The Group had signed by the end of the quarter a total of
 1,786 contracts for direct service provisioning and had connected 943 customer
 sites directly to its network, which is ahead of the initial expectations.
 Jazztel has obtained excellent results at signing new large clients including
 direct access contracts with Ernst & Young Cap Gemini, Zara and Caixa Galicia.
 Jazztel has also started the connection of clients as part of its agreement
 with ASCER announced in January 2001.  At the same time, it has continued
 signing important direct access agreements with business associations.
 Recently, Jazztel signed an agreement with ACEVAS (Spanish Association of
 Volkswagen, Audi and Skoda's car dealership) to provide broadband services to
 their 250 affiliated car dealerships throughout Spain.
     Antonio Carro commented on these developments:  "We are very satisfied
 with the evolution of direct access provisioning and the rapid growth of
 direct connections.  As we anticipated, the further integration of the
 recently acquired Adatel is helping us to enhance our direct access service
 capabilities and it will have an even greater impact in the near future.
 Direct access is already becoming an important part of our revenue stream and
 will increase steadily in the future."
     As of March 31st 2001, the Group had built 2,092 local access km, a growth
 of 260.7% over the km built by the end of the first quarter 2000.  The Group
 has 1,289 additional km with building permits granted.  Jazztel had also
 continued to submit applications for construction and had 1,605 additional km
 submitted for municipal approval which gives Jazztel enough flexibility to
 guarantee the construction of its planned network in 2001.  Jazztel had
 operational fibre in 15 of the largest Spanish cities and business parks and
 continued to execute on its plans to complete its network rollout as rapidly
 as possible.
     The Group also completed the Spanish backbone through the deployment of
 the Northwest ring and put in service 3 additional metropolitan area networks.
 Antonio Carro commented:  "We are quickly improving our ability to enter new
 target markets with our own infrastructure.  The completion of our Spanish
 backbone and the entry into service of new metropolitan area networks gives us
 confidence that we will continue to ramp up our provisioning rates in the
 coming quarters."
 
 
                       1st          4th          1st        1st          4th
                   quarter      quarter      quarter    quarter %    quarter
                      2000         2000         2001     Growth    %  Growth
 
     Km completed      580        1,731        2,092       260.7%       20.9%
     Additional km
      with building
      permits or which
      are under
      construction     500        1,298        1,289       157.8%       -0.7%
     Additional km
      with application
      for permits
      submitted      1,450        1,727        1,605        10.7%       -7.1%
     Metropolitan Areas
      Operational        0           13           16         n.a.       23.1%
 
 
     Financial Information
     Miguel Salis, Chief Financial Officer of Jazztel, commented on the first
 quarter 2001 results:  "During this quarter we surpassed our initial
 expectations.  We have increased our revenues to Euro 46.6 million, from
 Euro 35.7 million in the last quarter of 2000, a growth of 30.5%.  We have
 improved our gross margin, reaching Euro 7.6 million in the quarter, due to
 the strong increase in the direct access revenues and the positive evolution
 of our Internet and Indirect Access businesses.  We are very focused on the
 continuing growth of high value-added revenues and to efficiently increase our
 network reach in order to meet our profitability targets."
     Revenues for the quarter, ended on March 31st 2001, increased to
 Euro 46.6 million, a growth of 30.5% from the Euro 35.7 million for last
 quarter of 2000 and a 108% growth on the first quarter of 2000 revenues.
 Direct access activities are becoming an important part of Jazztel's total
 revenues and have reached Euro 8.1 million in the quarter, an increase of
 107.7% compared to the previous quarter.  Indirect access revenues grew 28.3%
 from Euro 21.9 million in the fourth quarter of 2000 to Euro 28.1 million in
 this first quarter of 2001.  Carrier service revenues have represented a
 slightly smaller part of our total revenues, reaching Euro 3.7 million in the
 quarter.
 
 
     Business Lines
     Euro             1st          4th          1st        1st          4th
     (Million)     quarter      quarter      quarter    quarter %    quarter
                      2000         2000         2001     Growth    %  Growth
 
     Indirect Access  17.2         21.9         28.1        63.4%       28.3%
     Direct Access     0.1          3.9          8.1         n.s.      107.7%
     Carrier services  1.0          4.3          3.7         270%        -14%
     Internet & Value
      Added Services   4.0          5.4          6.5        62.5%       20.4%
     Other Revenues      0          0.2          0.2         n.a.          0%
 
     Total Revenues   22.4         35.7         46.6         108%       30.5%
 
     Cost of Sales were Euro 39 million for the first quarter of 2001, or
 83.7% of sales, improving from 103.1% of sales in the first quarter of 2000.
 Gross margin in the first quarter of 2001 improved to Euro 7.6 million from
 Euro 5.6 million in the last quarter of 2000.
     Selling, General and Administrative (SG&A) expenses for the first quarter
 of 2001 were Euro 34.4 million compared with Euro 37.2 million for the last
 quarter of 2000.  SG&A expenses as a percentage of sales, have seen a
 significant improvement from 104.2% of sales for the fourth quarter of 2000 to
 73.8% of sales in the first quarter of 2001, primarily as a consequence of
 tighter controls on marketing, customer acquisition costs and call center
 operation expenses.
     Adjusted EBITDA losses in this quarter were negative Euro 26.8 million,
 compared with negative Euro 31.6 million losses in the last quarter of 2000.
 Adjusted EBITDA losses as a percentage of sales decreased from negative 88.5%
 in the last quarter of 2000 to negative 57.5% in the first quarter of 2001.
 This reflects the increase in gross margins and the tight control over SG&A
 expenses.
     Depreciation and Amortization Expense was Euro 12.3 million for this
 quarter, increasing from Euro 9.5 million for the last quarter of 2000 as the
 Group continued the construction of its network in Spain and Portugal.
     Net Financial Expense for the first quarter of 2001 was Euro 27.6 million
 and consisted primarily of accrued interest on our high yield notes issued in
 April 1999, December 1999 and July 2000, less interest earned on invested
 funds.
     Net Loss for the first quarter of the year 2001 amounted to
 Euro 62.4 million.
 
     Fully Funded Business Plan
     The Company recently successfully completed a senior credit facility
 arranged by JP Morgan Chase for its Spanish subsidiary, Jazztel Telecom S.A.,
 for Euro 200 million (including a Euro 175 million revolving credit and a Euro
 25 million performance bond backstop).  The deal was launched at
 Euro 125 million but was upsized to Euro 200 million following strong investor
 demand.
     "Following the completion of the credit facility, Jazztel has more than
 Euro 840 million of financial resources available.  This is sufficient to fund
 our current business plan until cash flow positive," commented Mr. Salis.
     During the next several years the Jazztel Group expects to continue to
 incur significant net losses and negative cash flows while completing the
 deployment of its network, developing a significantly expanded range of
 telecommunication services as well as its Internet business and the wireless
 local loop business of Banda26.  The Group does not anticipate having positive
 EBITDA from its telecommunications business in Spain and Portugal until at
 least the second half of year 2002.  The Group's ability to generate positive
 EBITDA is subject to numerous risks and uncertainties, many of which are out
 of its control.
 
     Certain statements in this release are forward-looking statements that are
 subject to material risks and uncertainties.  Actual results could differ
 materially from those stated or implied by such forward-looking statements due
 to risks and uncertainties associated with our businesses, which include among
 others, competitive and technological developments, risks associated with the
 Company's growth, construction delays, the development of the Company's
 markets, regulatory risks, dependence on its major customers and their
 spending patterns and other risks which are presented in the Company's filings
 with the US Securities and Exchange Commission, including its annual report on
 Form 20-F and reports on Form 6-K, and certain European regulatory
 authorities.
 
 
                        JAZZTEL p.l.c. AND SUBSIDIARIES
 
                      PROFORMA CONSOLIDATED BALANCE SHEETS
         (Excluding the impact of Yacom Internet Factory in year 2000)
                                    In Euro
 
                                                  December 31,    March 31,
                                                         2000         2001
     ASSETS
     Current assets:
       Cash and cash equivalents                  415,835,350    411,695,478
       Marketable securities                       91,603,403
       Restricted funds related to Senior Notes   125,830,007    123,254,909
       Accounts receivable, net of allowance
        for doubtful accounts of Euro 7,611,137 at
        December 31 2000 and Euro 9,016,137 at
        March 31, 2001                             38,013,448     49,411,202
       Prepaid expenses                             6,944,344      6,470,651
       Taxes receivable                            53,675,044     62,489,355
       Other current assets                         6,801,660     11,808,676
 
       Total current assets                       738,703,256    665,130,271
 
       Property and equipment, net                399,932,680    428,102,011
       License costs, net                           2,199,414      2,178,135
       Intangible assets, net                      44,782,338     58,598,462
       Debt issuance costs, net                    26,451,514     25,718,824
       Restricted funds related to Senior Notes    81,398,725     66,295,386
       Deposits and other assets                    6,260,350      5,989,213
 
     TOTAL ASSETS                               1,299,728,276  1,252,012,302
 
     LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
     Current liabilities:
       Current maturities of long-term debt        27,880,177     40,495,378
       Accounts payable                           166,974,726    156,578,704
       Accrued expenses and other
        current liabilities                        27,779,761     23,348,356
       Deferred income                              1,369,082      1,369,082
         Total current liabilities                224,003,745    221,791,520
 
     Long-term debt                               925,428,562    931,278,273
     Other Long - Term liabilities                     27,642         27,642
     Minority interests                                    --        445,176
     Deferred income                                6,160,867      5,838,460
     Shareholders' equity:
     Common stock, Euro 0.08 par value,
      77,500,000 authorized shares, 58,987,767 shares
      issued and outstanding shares at
      December 31, 2000 and Euro 0.08 par value,
      77,500,000 authorized shares and 59,523,949 shares
      issued and outstanding at March 31, 2001      4,719,020      4,761,915
     Non-voting stock, 0.01 pound sterling
      (Euro 0.015) par value at December 31, 1998
      and 1999, 5,000,000 shares authorized, issued
      and outstanding                                  75,127         75,127
     Additional paid in capital                   357,196,667    371,641,799
     Warrants                                      20,289,894     20,201,880
     Accumulated deficit                         (238,173,246)  (304,049,489)
 
     Total shareholders' equity                   144,107,461     92,631,232
 
     TOTAL LIABILITIES AND SHAREHOLDERS'
      EQUITY                                    1,299,728,276  1,252,012,302
 
 
                        JAZZTEL p.l.c. AND SUBSIDIARIES
 
                       PROFORMA STATEMENTS OF OPERATIONS
         (Excluding the impact of Yacom Internet Factory in year 2000)
 
   For the quarters ended March 31 2000, December 31, 2000 and March 31 2001
                           In Euro, except share data
 
 
                               Quarter ended   Quarter Ended Quarter ended
                                    March 31,    December 31,     March 31,
                                        2001            2000          2001
 
     OPERATING REVENUES:
       Telecommunications
        revenues                  22,367,250      35,552,537    46,597,571
       Other revenues                                186,374
         Total operating
          revenues                22,367,250      35,739,849    46,597,571
     OPERATING EXPENSES:
       Cost of sales             (23,107,433)    (30,160,370)  (39,030,620)
       Sales, general and
        administration (Inclusive
        of Euro 1,408,687 million
        in non-cash share
        compensation expense in
        first quarter of 2000,
        Euro 8,372,733 in 4Q of
        2000 and Euro 2,404,776 in
        1Q of 2001)              (35,601,143)    (45,587,979)  (36,826,298)
       Depreciation and
        amortization              (4,689,751)     (9,524,269)  (12,295,587)
         Total operating
          expenses               (63,398,327)    (85,272,618)  (88,152,506)
     OPERATING LOSS              (41,031,077)    (49,532,769)  (41,554,935)
     Other income (expense), net:
       Interest income             7,028,679       7,943,480     7,463,759
       Interest expense          (31,080,433)    (26,303,554)  (34,872,088)
       Other income (expense),
        net                                      181,738,496     7,024,641
       Total other income
        (expense), net           (24,051,755)    163,378,422   (20,383,689)
     LOSS BEFORE MINORITY
      INTERESTS                  (65,082,832)    113,845,653   (61,938,623)
     Minority interests              (13,683)       (112,847)      (83,962)
     NET LOSS FROM CONTINUING
      OPERATIONS                 (65,069,149)    113,732,806   (62,022,586)
     Provision for taxes                                          (352,530)
     NET LOSS                    (65,069,149)    113,732,806   (62,375,116)
     LOSS PER COMMON SHARE
      - basic and diluted              (2.74)          (1.32)        (1.05)
 
     WEIGHTED AVERAGE NUMBER OF
     COMMON SHARES
     OUTSTANDING
      - basic and diluted         23,755,970      56,106,617    59,371,910
 
 
                          JAZZTEL p.l.c. AND SUBSIDIARIES
                   PROFORMA CONSOLIDATED STATEMENTS OF CASH FLOWS
           (Excluding the impact of Yacom Internet Factory in year 2000)
                                      In Euro
 
                                               Quarter Ended  Quarter Ended
                                                 December 31,      March 31,
                                                        2000           2001
     OPERATING ACTIVITIES:
     Net loss                                    (74,282,493)   (62,375,116)
     Adjustments to reconcile net loss to net
      cash used in operating  activities:
       Minority interests                                 --             --
       Amortization of goodwill                           --             --
       Amortization of deferred costs
        (inclusive amortization of debt
        issuance cost)                            13,378,301        732,689
       Other depreciation and amortization        34,018,644     12,295,588
     Non-cash provisions for losses                3,836,702      1,405,000
     Non-cash gain on disposal of subsidiaries  (329,401,645)
     Non-cash provision for depreciation and
      sale of assets                              89,574,898
     Non-cash compensation associated with
      issuance of share options and shares in
      subsidiary to employees                     12,834,546      2,404,776
     Gain on disposal of marketable securities                   (7,165,512)
     Foreign currency adjustments                                 5,935,176
     Changes in operating assets and liabilities:
       Accounts receivable                       (31,709,184)   (12,802,754)
       Prepaid expenses and other current assets (32,119,895)   (13,347,634)
       Deposits and other assets                  (4,932,189)       271,137
       Accounts payable and accruals             103,520,807    (14,827,426)
       Accrued interest                           15,150,953     12,615,201
       Net cash used in operating activities    (200,130,554)   (74,858,876)
     INVESTING ACTIVITIES:
       Acquisitions of licenses costs               (858,912)       (49,831)
       Purchase of property and equipment       (203,057,436)   (37,025,016)
       Acquisitions, net of cash acquired                 --    (15,052,919)
       Acquisitions of intangible assets         (29,801,751)    (2,131,998)
       Proceeds from the sale of subsidiaries    100,000,000
       Cash proceeds from the sale of marketable
        securities                                54,221,131     98,768,915
         Net cash used in investing activities   (79,496,967)    44,509,151
     FINANCING ACTIVITIES:
       Movement in funds held in Escrow           11,503,664     17,678,437
       Debt issuance costs                       (10,238,460)
     Proceeds from exercise of share options
      and warrants                                 1,604,280        593,328
     Issuance of share capital                    42,168,405      7,938,087
     Share issuance costs                         (6,458,776)
     Increase in short-term debt, net                     --
     Borrowings of long-term debt                245,117,708
     Payments of long-term debt                   (5,297,769)
     Net cash provided by financing activities   278,399,052     26,209,852
     INCREASE (DECREASE) IN CASH AND
      CASH EQUIVALENTS                            (1,228,468)    (4,139,873)
     CASH AND CASH EQUIVALENTS AT
      BEGINNING OF PERIOD                        417,063,817    415,835,350
     CASH AND CASH EQUIVALENTS AT END
      OF PERIOD                                  415,835,350    411,695,478
 
 

SOURCE Jazztel p.l.c.
    MADRID, Spain, April 26 /PRNewswire/ -- Jazztel p.l.c. (Nasdaq:   JAZZ),
 (Easdaq: JAZZ) (and the Nuevo Mercado in Spain: JAZ), the leading pan-Iberian
 competitive provider of broadband communication services, today announced
 results for the first quarter ended 31st March 2001.  Amounts are presented in
 Euros and in accordance with US GAAP.
 
     Highlights of the Quarter
 
     Financial
     * First quarter revenues grew to Euro 46.6 million, an increase of 30.5%
       from the fourth quarter of 2000 and 108% over the same period last year.
 
     * Gross margin improved to positive Euro 7.6 million, an increase of 35.7%
       over the fourth quarter and compared to the negative Euro 0.7 over the
       first period last year.
 
     * Adjusted EBITDA, improved from negative Euro 34.9 million in the fourth
       quarter of 2000 to negative Euro 26.8 million in the first quarter
       of 2001.  As a percentage of revenue, adjusted EBITDA improved from
       negative 88.5% in the fourth quarter of 2000, to negative 57.5% in the
       first quarter of 2001.  EBITDA break-even continues to be expected for
       the second half of 2002.
 
     * In February, Jazztel sold the remaining stake of its T-Online holdings,
       received in the sale of Yacom.  Total proceeds of this transaction
       amounted to Euro 281 million.
 
     * In April 2001, Jazztel entered into a Euro 200 million credit facility
       which gives the Company over Euro 840(1) million of available cash and
       secures the total financing of Jazztel's business plan until it is cash
       flow positive.
 
     Operational
     * Total traffic on the Jazztel network rose to 747 million minutes in the
       first quarter of 2001, an increase of 24.9% compared to the last period
       in 2000 and a 184% increase over the same period of 2000.
 
     * Connection of 362 new sites to Jazztel's fiber network, increasing the
       number of provisioned sites to 943, a growth of 62.3% from the previous
       quarter, exceeding initial expectations.
 
     * Signing up of 528 new direct access customers bringing the total of
       contracted on net customers to 1,786.
 
     * Expansion of the local area network to 2,092 km, an increase of 361 km
       from the previous quarter.
 
     * Completion of the Spanish backbone through the deployment of the
       Northwest ring with 1,496 km of additional operational fiber.  Total
       backbone now comprises 5,733 km.
 
     * Agreement with ACEVAS (Spanish Association of Volkswagen, Audi and
       Skoda's car dealerships) in order to provide fixed telephony and data
       transmission services to the 250 affiliated car dealerships throughout
       Spain.
 
     (1) Includes high yield bonds, restricted cash for high yield interest
         payments, full drawdown of the Euro 175 million credit facility and
         Euro 70 million of vendor financing under negotiation.
 
     Other significant events to date
     In January, Jazztel closed the acquisition of 87.2% of Adatel, a
 Madrid-based telecom's systems integrator for large and medium-sized
 businesses in Spain.
     In April, Jazztel closed the acquisition of 99,93% of Centro de Calculo
 Sabadell (CCS), a developer and integrator of information systems for
 businesses, and completed its new management structure with the appointment of
 Joaquim Molins as Chairman, Javier Cuesta as Vice-Chairman, Jordi Malapeira as
 CEO and Josep Rof as COO.  Joaquim Molins was also appointed board member of
 Jazztel Plc.
 
     Financial Statistics
 
     Euro             1st          4th          1st        1st          4th
     (Million)     quarter      quarter      quarter    quarter %    quarter
                      2000         2000         2001     Growth    %  Growth
 
     Revenues         22.4         35.7         46.6         108%       30.5%
     Gross Margin    (-0.7)         5.6          7.6         n.a.       35.7%
     % of sales      -3.1%        15.6%        16.3%         n.a.        n.a.
     Adjusted
      EBITDA (a)    (-34.9)      (-31.6)      (-26.8)       23.2%      -15.2%
     % of sales    -155.8%       -88.5%       -57.5%         n.a.        n.a.
     Capex            59.5        100.0         54.2        -8.9%      -45.8%
 
 
     (a) Excludes impact of non-cash accounting charges for option assignments
         of Euro 1.4 million in the first quarter of 2000, Euro 8.4 million in
         the fourth quarter of 2000 and Euro 2.4 million in the first quarter
         of 2001
 
     Operational Statistics
 
                       1st          4th          1st        1st          4th
                   quarter      quarter      quarter    quarter %    quarter
                      2000         2000         2001     Growth    %  Growth
 
     Network Deployment
       Local access km
        completed      580        1,731        2,092      260.7%        20.9%
       Backbone km
        completed    4,220        4,237        5,733       35.8%        35.3%
     Direct Access
       Direct access
        human
        resources       80          165          165*     106.3%           0%
       Contracts
        Signed         110        1,258        1,786      1,524%        42.0%
       Customer sites
        provisioned     30          581          943    3,043.3%        62.3%
     Indirect Access
       Number of
        customers  487,300      694,000      708,763       45.4%         2.1%
       Number of
        lines      802,900    1,135,716    1,157,383       44.2%         1.9%
     Internet & Value Added Services
       Active Jazznet
        customers    7,400        5,893        7,546          2%        28.1%
       ADSL active
        customers       52          467          594    1,042.3%        27.2%
     Carrier Services
       Traffic Termination
         contracts      12           28           34      183.3%        21.4%
       Wholesale capacity
        contracts        6           17           18        200%         5.9%
     Minutes of Traffic
      (millions)       284          598          747        163%        24.9%
     Headcount**       616          738          806       30.8%         9.2%
 
     *   Includes sales force (116) and technical staff (49)
     **  Excluding Adatel
 
 
     Summary of Operations
     The Jazztel Group had total revenues of Euro 46.6 million for the first
 quarter of 2001, a growth of 30.5% from the Euro 35.7 million for the last
 quarter of 2000.  Gross margin was positive Euro 7.6 million in the first
 quarter of 2001, a growth of 35.7% from the Euro 5.6 million for the last
 quarter.  Adjusted EBITDA losses for the first quarter of 2001 have improved
 to negative Euro 26.8 million, compared to negative Euro 31.6 million for the
 last quarter of year 2000.  Adjusted EBITDA as a percentage of sales improved
 to negative 57.5% for the first quarter of 2001 up from negative 88.5% in the
 last quarter of year 2000.
     Antonio Carro, Chief Executive Officer of Jazztel, declared:  "The first
 quarter of year 2001 has seen a steady growth of our business as we have
 continued executing successfully on our Strategic Plan.  In fact, we are
 seeing significantly less competitive pressure in nearly all our business
 lines due to difficult financial market conditions, which gives us the chance
 to extend our first mover advantage.  This factor, paired with the fact that
 we have a fully funded business plan, continues to reinforce our competitive
 position as the leading alternative provider of high bandwidth data, Internet
 and voice services for small and medium size businesses across Spain and
 Portugal.  The successful signing of new large contracts to offer broadband
 telecommunications services to sectorial associations and the continuing
 buildout of our local area network coupled with the excellent pace of new
 direct customers signed make us feel very confident about the future."
     Regarding the financial evolution of the company, Antonio Carro added:
 "This first quarter has confirmed the strong growth of our revenues, while at
 the same time improving our operating profitability.  The continuing positive
 evolution of the Gross Margin for the quarter, together with tight control of
 the SG&A expenses, allow us to be confident on reaching positive EBITDA in the
 second half of 2002 as we have planned."
 
     Major Operational Achievements
     In the first quarter of 2001 Jazztel has continued to implement its direct
 access strategy.  The Group had signed by the end of the quarter a total of
 1,786 contracts for direct service provisioning and had connected 943 customer
 sites directly to its network, which is ahead of the initial expectations.
 Jazztel has obtained excellent results at signing new large clients including
 direct access contracts with Ernst & Young Cap Gemini, Zara and Caixa Galicia.
 Jazztel has also started the connection of clients as part of its agreement
 with ASCER announced in January 2001.  At the same time, it has continued
 signing important direct access agreements with business associations.
 Recently, Jazztel signed an agreement with ACEVAS (Spanish Association of
 Volkswagen, Audi and Skoda's car dealership) to provide broadband services to
 their 250 affiliated car dealerships throughout Spain.
     Antonio Carro commented on these developments:  "We are very satisfied
 with the evolution of direct access provisioning and the rapid growth of
 direct connections.  As we anticipated, the further integration of the
 recently acquired Adatel is helping us to enhance our direct access service
 capabilities and it will have an even greater impact in the near future.
 Direct access is already becoming an important part of our revenue stream and
 will increase steadily in the future."
     As of March 31st 2001, the Group had built 2,092 local access km, a growth
 of 260.7% over the km built by the end of the first quarter 2000.  The Group
 has 1,289 additional km with building permits granted.  Jazztel had also
 continued to submit applications for construction and had 1,605 additional km
 submitted for municipal approval which gives Jazztel enough flexibility to
 guarantee the construction of its planned network in 2001.  Jazztel had
 operational fibre in 15 of the largest Spanish cities and business parks and
 continued to execute on its plans to complete its network rollout as rapidly
 as possible.
     The Group also completed the Spanish backbone through the deployment of
 the Northwest ring and put in service 3 additional metropolitan area networks.
 Antonio Carro commented:  "We are quickly improving our ability to enter new
 target markets with our own infrastructure.  The completion of our Spanish
 backbone and the entry into service of new metropolitan area networks gives us
 confidence that we will continue to ramp up our provisioning rates in the
 coming quarters."
 
 
                       1st          4th          1st        1st          4th
                   quarter      quarter      quarter    quarter %    quarter
                      2000         2000         2001     Growth    %  Growth
 
     Km completed      580        1,731        2,092       260.7%       20.9%
     Additional km
      with building
      permits or which
      are under
      construction     500        1,298        1,289       157.8%       -0.7%
     Additional km
      with application
      for permits
      submitted      1,450        1,727        1,605        10.7%       -7.1%
     Metropolitan Areas
      Operational        0           13           16         n.a.       23.1%
 
 
     Financial Information
     Miguel Salis, Chief Financial Officer of Jazztel, commented on the first
 quarter 2001 results:  "During this quarter we surpassed our initial
 expectations.  We have increased our revenues to Euro 46.6 million, from
 Euro 35.7 million in the last quarter of 2000, a growth of 30.5%.  We have
 improved our gross margin, reaching Euro 7.6 million in the quarter, due to
 the strong increase in the direct access revenues and the positive evolution
 of our Internet and Indirect Access businesses.  We are very focused on the
 continuing growth of high value-added revenues and to efficiently increase our
 network reach in order to meet our profitability targets."
     Revenues for the quarter, ended on March 31st 2001, increased to
 Euro 46.6 million, a growth of 30.5% from the Euro 35.7 million for last
 quarter of 2000 and a 108% growth on the first quarter of 2000 revenues.
 Direct access activities are becoming an important part of Jazztel's total
 revenues and have reached Euro 8.1 million in the quarter, an increase of
 107.7% compared to the previous quarter.  Indirect access revenues grew 28.3%
 from Euro 21.9 million in the fourth quarter of 2000 to Euro 28.1 million in
 this first quarter of 2001.  Carrier service revenues have represented a
 slightly smaller part of our total revenues, reaching Euro 3.7 million in the
 quarter.
 
 
     Business Lines
     Euro             1st          4th          1st        1st          4th
     (Million)     quarter      quarter      quarter    quarter %    quarter
                      2000         2000         2001     Growth    %  Growth
 
     Indirect Access  17.2         21.9         28.1        63.4%       28.3%
     Direct Access     0.1          3.9          8.1         n.s.      107.7%
     Carrier services  1.0          4.3          3.7         270%        -14%
     Internet & Value
      Added Services   4.0          5.4          6.5        62.5%       20.4%
     Other Revenues      0          0.2          0.2         n.a.          0%
 
     Total Revenues   22.4         35.7         46.6         108%       30.5%
 
     Cost of Sales were Euro 39 million for the first quarter of 2001, or
 83.7% of sales, improving from 103.1% of sales in the first quarter of 2000.
 Gross margin in the first quarter of 2001 improved to Euro 7.6 million from
 Euro 5.6 million in the last quarter of 2000.
     Selling, General and Administrative (SG&A) expenses for the first quarter
 of 2001 were Euro 34.4 million compared with Euro 37.2 million for the last
 quarter of 2000.  SG&A expenses as a percentage of sales, have seen a
 significant improvement from 104.2% of sales for the fourth quarter of 2000 to
 73.8% of sales in the first quarter of 2001, primarily as a consequence of
 tighter controls on marketing, customer acquisition costs and call center
 operation expenses.
     Adjusted EBITDA losses in this quarter were negative Euro 26.8 million,
 compared with negative Euro 31.6 million losses in the last quarter of 2000.
 Adjusted EBITDA losses as a percentage of sales decreased from negative 88.5%
 in the last quarter of 2000 to negative 57.5% in the first quarter of 2001.
 This reflects the increase in gross margins and the tight control over SG&A
 expenses.
     Depreciation and Amortization Expense was Euro 12.3 million for this
 quarter, increasing from Euro 9.5 million for the last quarter of 2000 as the
 Group continued the construction of its network in Spain and Portugal.
     Net Financial Expense for the first quarter of 2001 was Euro 27.6 million
 and consisted primarily of accrued interest on our high yield notes issued in
 April 1999, December 1999 and July 2000, less interest earned on invested
 funds.
     Net Loss for the first quarter of the year 2001 amounted to
 Euro 62.4 million.
 
     Fully Funded Business Plan
     The Company recently successfully completed a senior credit facility
 arranged by JP Morgan Chase for its Spanish subsidiary, Jazztel Telecom S.A.,
 for Euro 200 million (including a Euro 175 million revolving credit and a Euro
 25 million performance bond backstop).  The deal was launched at
 Euro 125 million but was upsized to Euro 200 million following strong investor
 demand.
     "Following the completion of the credit facility, Jazztel has more than
 Euro 840 million of financial resources available.  This is sufficient to fund
 our current business plan until cash flow positive," commented Mr. Salis.
     During the next several years the Jazztel Group expects to continue to
 incur significant net losses and negative cash flows while completing the
 deployment of its network, developing a significantly expanded range of
 telecommunication services as well as its Internet business and the wireless
 local loop business of Banda26.  The Group does not anticipate having positive
 EBITDA from its telecommunications business in Spain and Portugal until at
 least the second half of year 2002.  The Group's ability to generate positive
 EBITDA is subject to numerous risks and uncertainties, many of which are out
 of its control.
 
     Certain statements in this release are forward-looking statements that are
 subject to material risks and uncertainties.  Actual results could differ
 materially from those stated or implied by such forward-looking statements due
 to risks and uncertainties associated with our businesses, which include among
 others, competitive and technological developments, risks associated with the
 Company's growth, construction delays, the development of the Company's
 markets, regulatory risks, dependence on its major customers and their
 spending patterns and other risks which are presented in the Company's filings
 with the US Securities and Exchange Commission, including its annual report on
 Form 20-F and reports on Form 6-K, and certain European regulatory
 authorities.
 
 
                        JAZZTEL p.l.c. AND SUBSIDIARIES
 
                      PROFORMA CONSOLIDATED BALANCE SHEETS
         (Excluding the impact of Yacom Internet Factory in year 2000)
                                    In Euro
 
                                                  December 31,    March 31,
                                                         2000         2001
     ASSETS
     Current assets:
       Cash and cash equivalents                  415,835,350    411,695,478
       Marketable securities                       91,603,403
       Restricted funds related to Senior Notes   125,830,007    123,254,909
       Accounts receivable, net of allowance
        for doubtful accounts of Euro 7,611,137 at
        December 31 2000 and Euro 9,016,137 at
        March 31, 2001                             38,013,448     49,411,202
       Prepaid expenses                             6,944,344      6,470,651
       Taxes receivable                            53,675,044     62,489,355
       Other current assets                         6,801,660     11,808,676
 
       Total current assets                       738,703,256    665,130,271
 
       Property and equipment, net                399,932,680    428,102,011
       License costs, net                           2,199,414      2,178,135
       Intangible assets, net                      44,782,338     58,598,462
       Debt issuance costs, net                    26,451,514     25,718,824
       Restricted funds related to Senior Notes    81,398,725     66,295,386
       Deposits and other assets                    6,260,350      5,989,213
 
     TOTAL ASSETS                               1,299,728,276  1,252,012,302
 
     LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
     Current liabilities:
       Current maturities of long-term debt        27,880,177     40,495,378
       Accounts payable                           166,974,726    156,578,704
       Accrued expenses and other
        current liabilities                        27,779,761     23,348,356
       Deferred income                              1,369,082      1,369,082
         Total current liabilities                224,003,745    221,791,520
 
     Long-term debt                               925,428,562    931,278,273
     Other Long - Term liabilities                     27,642         27,642
     Minority interests                                    --        445,176
     Deferred income                                6,160,867      5,838,460
     Shareholders' equity:
     Common stock, Euro 0.08 par value,
      77,500,000 authorized shares, 58,987,767 shares
      issued and outstanding shares at
      December 31, 2000 and Euro 0.08 par value,
      77,500,000 authorized shares and 59,523,949 shares
      issued and outstanding at March 31, 2001      4,719,020      4,761,915
     Non-voting stock, 0.01 pound sterling
      (Euro 0.015) par value at December 31, 1998
      and 1999, 5,000,000 shares authorized, issued
      and outstanding                                  75,127         75,127
     Additional paid in capital                   357,196,667    371,641,799
     Warrants                                      20,289,894     20,201,880
     Accumulated deficit                         (238,173,246)  (304,049,489)
 
     Total shareholders' equity                   144,107,461     92,631,232
 
     TOTAL LIABILITIES AND SHAREHOLDERS'
      EQUITY                                    1,299,728,276  1,252,012,302
 
 
                        JAZZTEL p.l.c. AND SUBSIDIARIES
 
                       PROFORMA STATEMENTS OF OPERATIONS
         (Excluding the impact of Yacom Internet Factory in year 2000)
 
   For the quarters ended March 31 2000, December 31, 2000 and March 31 2001
                           In Euro, except share data
 
 
                               Quarter ended   Quarter Ended Quarter ended
                                    March 31,    December 31,     March 31,
                                        2001            2000          2001
 
     OPERATING REVENUES:
       Telecommunications
        revenues                  22,367,250      35,552,537    46,597,571
       Other revenues                                186,374
         Total operating
          revenues                22,367,250      35,739,849    46,597,571
     OPERATING EXPENSES:
       Cost of sales             (23,107,433)    (30,160,370)  (39,030,620)
       Sales, general and
        administration (Inclusive
        of Euro 1,408,687 million
        in non-cash share
        compensation expense in
        first quarter of 2000,
        Euro 8,372,733 in 4Q of
        2000 and Euro 2,404,776 in
        1Q of 2001)              (35,601,143)    (45,587,979)  (36,826,298)
       Depreciation and
        amortization              (4,689,751)     (9,524,269)  (12,295,587)
         Total operating
          expenses               (63,398,327)    (85,272,618)  (88,152,506)
     OPERATING LOSS              (41,031,077)    (49,532,769)  (41,554,935)
     Other income (expense), net:
       Interest income             7,028,679       7,943,480     7,463,759
       Interest expense          (31,080,433)    (26,303,554)  (34,872,088)
       Other income (expense),
        net                                      181,738,496     7,024,641
       Total other income
        (expense), net           (24,051,755)    163,378,422   (20,383,689)
     LOSS BEFORE MINORITY
      INTERESTS                  (65,082,832)    113,845,653   (61,938,623)
     Minority interests              (13,683)       (112,847)      (83,962)
     NET LOSS FROM CONTINUING
      OPERATIONS                 (65,069,149)    113,732,806   (62,022,586)
     Provision for taxes                                          (352,530)
     NET LOSS                    (65,069,149)    113,732,806   (62,375,116)
     LOSS PER COMMON SHARE
      - basic and diluted              (2.74)          (1.32)        (1.05)
 
     WEIGHTED AVERAGE NUMBER OF
     COMMON SHARES
     OUTSTANDING
      - basic and diluted         23,755,970      56,106,617    59,371,910
 
 
                          JAZZTEL p.l.c. AND SUBSIDIARIES
                   PROFORMA CONSOLIDATED STATEMENTS OF CASH FLOWS
           (Excluding the impact of Yacom Internet Factory in year 2000)
                                      In Euro
 
                                               Quarter Ended  Quarter Ended
                                                 December 31,      March 31,
                                                        2000           2001
     OPERATING ACTIVITIES:
     Net loss                                    (74,282,493)   (62,375,116)
     Adjustments to reconcile net loss to net
      cash used in operating  activities:
       Minority interests                                 --             --
       Amortization of goodwill                           --             --
       Amortization of deferred costs
        (inclusive amortization of debt
        issuance cost)                            13,378,301        732,689
       Other depreciation and amortization        34,018,644     12,295,588
     Non-cash provisions for losses                3,836,702      1,405,000
     Non-cash gain on disposal of subsidiaries  (329,401,645)
     Non-cash provision for depreciation and
      sale of assets                              89,574,898
     Non-cash compensation associated with
      issuance of share options and shares in
      subsidiary to employees                     12,834,546      2,404,776
     Gain on disposal of marketable securities                   (7,165,512)
     Foreign currency adjustments                                 5,935,176
     Changes in operating assets and liabilities:
       Accounts receivable                       (31,709,184)   (12,802,754)
       Prepaid expenses and other current assets (32,119,895)   (13,347,634)
       Deposits and other assets                  (4,932,189)       271,137
       Accounts payable and accruals             103,520,807    (14,827,426)
       Accrued interest                           15,150,953     12,615,201
       Net cash used in operating activities    (200,130,554)   (74,858,876)
     INVESTING ACTIVITIES:
       Acquisitions of licenses costs               (858,912)       (49,831)
       Purchase of property and equipment       (203,057,436)   (37,025,016)
       Acquisitions, net of cash acquired                 --    (15,052,919)
       Acquisitions of intangible assets         (29,801,751)    (2,131,998)
       Proceeds from the sale of subsidiaries    100,000,000
       Cash proceeds from the sale of marketable
        securities                                54,221,131     98,768,915
         Net cash used in investing activities   (79,496,967)    44,509,151
     FINANCING ACTIVITIES:
       Movement in funds held in Escrow           11,503,664     17,678,437
       Debt issuance costs                       (10,238,460)
     Proceeds from exercise of share options
      and warrants                                 1,604,280        593,328
     Issuance of share capital                    42,168,405      7,938,087
     Share issuance costs                         (6,458,776)
     Increase in short-term debt, net                     --
     Borrowings of long-term debt                245,117,708
     Payments of long-term debt                   (5,297,769)
     Net cash provided by financing activities   278,399,052     26,209,852
     INCREASE (DECREASE) IN CASH AND
      CASH EQUIVALENTS                            (1,228,468)    (4,139,873)
     CASH AND CASH EQUIVALENTS AT
      BEGINNING OF PERIOD                        417,063,817    415,835,350
     CASH AND CASH EQUIVALENTS AT END
      OF PERIOD                                  415,835,350    411,695,478
 
 SOURCE  Jazztel p.l.c.