- Skipti hf. results in first quarter 2008

| Source: Síminn hf.
- Sales increased 20% from first quarter 2007

•  Sales increased by ISK 1.5 billion from the first quarter of 2007, or 20%.
   Sales amounted to ISK 8.9 billion as compared to ISK 7.4 billion in the
   preceding year. 

•  Cash from operations amounted to ISK 2.6 billion. After tax and interest,
   cash from operations came to ISK 1.9 billion. 

•  Loss over the period came to ISK 3.6 billion, mainly due to the devaluation
   of the Icelandic krona. 

•  Exhange loss came to ISK 4.4 billion of the total of ISK 5.5 billion finance
   cost for the period. 

•  Earnings before depreciation and financial items (EBITDA) amounted to ISK 2.0
   billion as compared to ISK 2.1 billion for the corresponding quarter of 2007.
   EBITDA margin was 22.4%.
•  28% of Skipti's sales derived from international operations.

•  Skipti's equity ratio is 30.4%.

Highlights of the Quarter

•  The Group's telecommunications companies in Denmark were merged under the
   name of Síminn Danmark.
•  Skipti's public offering was concluded during the quarter. A total of 179
   investors offered to buy 552,220,641 shares in Skipti, which corresponds to
   7.49% of the company's total share capital. The Company's shares were
   admitted to trading on 19 March. This was followed by a voluntary take-over
   bid for all the Company's shares by Exista, the Company's largest

•  In the beginning of March, the executive committee on privatisation of the
   Slovenian Government announced that the telecommunications company Telekom
   Slovenije would not be sold for the time being. Skipti was one of two bidders
   for the company. 

•  Síminn, the Group's largest subsidiary, began the development of a new
   long-range 3G system, which will offer users a strong high-speed connection
   throughout the country and off the coasts of Iceland. 

Brynjólfur Bjarnason, CEO of Skipti hf.
“It has been an eventful quarter for Skipti and it is a matter of great
satisfaction that the company's regular operations are showing good results,
both as regards telecommunications and information technology. The price trend
of the Icelandic krona, however, has been extremely unfavourable, and in spite
of the Company's hedging measures the weakening of the krona is the reason for
the loss over the period. Demanding times lie ahead for the company's managers
and employees, as falling demand may be anticipated as a result of economic
trends. Nevertheless, times like these often provide opportunities for
financially strong companies like Skipti, and we will closely monitor the
situation in the market in the coming weeks and months.” 

Operating results for first Quarter 2008

Accounting Polices
The accounting policies adopted are consistent with those followed in the
preparation of the Annual Financial Statements for the year ended 31 December
2007. The Board of Directors and the CEO of Skipti hf. have confirmed the
Condensed Interim Consolidated Financial Statements for the three months ended
31 March 2008. 

Sales in 1Q 2008 came to ISK 8.865 million, as compared to ISK 7.383 million in
first quarter of the preceding year, increasing by 20%. The significant
increase is mainly explained by income from the Danish telecommunications
operations and organic growth. 

Earnings before financial items and taxes (EBIT) came to ISK 1.106 million,
decreasing by 5% between years. 

EBITDA for the Group came to ISK 2.005 million, as compared to 2.075 million in
the first quarter of 2007.  The EBITDA ratio is now 22.4%, against 27.9% a year
ago. Skipti has invested in IT companies and while this market generally yields
a lower EBITDA ratio than telecommunications companies, the investments
involved are lower in the IT sector. Furthermore, Skipti´s telecommunications
companies abroad do not own the networks on which they operate, which results
in a lower EBITDA margin than in the case of companies that own and operate
networks. Also, a one-off cost in the amount of ISK 145 million has been
charged to the accounts in the first quarter, relating to Skipti´s interest in
acquiring shares in Telekom Slovenije. 

Depreciation amounted to ISK 899 million, as compared to ISK 908 million in
corresponding quarter of 2007.
Loss for the Group came to ISK 3.607 million, as compared to a profit of ISK
1.432 million over the corresponding quarter of 2007. 

Cash Flow
Cash provided by operations  came to ISK 2.550 million for the quarter, as
compared to ISK 2.123 million in the first quarter of 2007. 

The Group's capital expenditures (CAPEX) amounted to ISK 761 million over the
quarter, as compared to ISK 787 million in 2007. 

Balance sheet
The group's total assets at 31 March 2008 came to ISK 100.581 million, having
increased by ISK 2.940 million, or 3%, between the first quarters of 2007 and

Equity stood at ISK 30.625 million at the end of 1Q 2008, and the equity ratio
was 30.4%. 

Market position and outlook
There is some uncertainty about the economic situation in Iceland, Skipti's
largest market, in the near-term future. A general fall in demand may be
expected, and Skipti hf and its subsidiaries have responded to the new
circumstances by taking various actions designed to achieve even greater
efficiency.  Each company operates on the basis of a clear and well defined

The development of Síminn's 3G network is moving ahead at full pace, and
according to the company's plans the service should be accessible in 23 urban
areas around the country this year. Síminn is currently working on the
installation of long-range 3G transmitters which will eventually cover a larger
area than the existing 2G service area. However, the extended coverage is not
the greatest advantage of the system, but rather the possibilities that will be
opened to customers with the new high-speed mobile network. High-speed data
transmission via telephone or laptops virtually anywhere in the country will
promote freedom of activity and communication for people who have elected to
live temporarily or permanently in the more isolated regions of the country. It
has always been an inherent element of Síminn's strategy that the development
of its transmission infrastructure must support the future market needs for
telecommunications service, and 3G is the next step in this development as the
successor to the best available mobile telephone service known today. 

Following a call for tenders, Farice hf and Míla ehf reached a ten-year
agreement concerning telecommunications services. According to the Agreement,
Míla will provide telecommunication services to Farice for the latter company's
development of a new submarine cable, Danice, and enlargements of the capacity
of the FARICE-1 cable. The effect of the agreement is that Míla will multiply
its transmission capacity and provide Icelandic telecommunications companies
with opportunities to enlarge their own capacities and at the same time
strengthen their services to customers. 

A new framework agreement between Skjárinn and SagaFilm was announced in the
first quarter which secured improved operations for Skjárinn and a supply of
quality Icelandic programming material for SkjárEinn. SkjárEinn's market share
amounted to about 36% of the total of advertising minutes in the first quarter.
A record was set in the SkjáBíó home movie channel in March when orders were
placed for 154,000 films and television programmes.  The number of
SkjárHeimur's customers grew by just short of 6% from the beginning of the year
and major improvements were achieved in contracts on programming material. 
Sales of advertisements in Já's telephone directory ended in February, with
publication scheduled for May.  The number of individual users of Ja.is grew by
approximately 20% from the corresponding period in 2007, and toward the end of
the quarter over 123 thousand individual users were accessing the site on a
weekly basis; over two million telephone calls were received by Já's
information service number over the quarter. 

On-Waves, a Síminn subsidiary, specialises in offering mobile telephone
services aboard ocean liners and ferries, as well as cargo vessels. The company
recently signed an agreement with MSC Cruises involving mobile telephone
services aboard MSC's ocean liners. The agreement covers eight vessels. The
agreement substantially enlarges On-Waves' market area, from approximately 55
thousand to 88 thousand passengers and crew. 

Síminn's companies in Denmark, Business Phone and Ventelo, were merged in early
March under a new brand - Síminn Danmark A/S. The objective of the merger is to
take better advantage of the strengths of both companies and benefit from
synergies resulting from the companies' similar operations. The company
currently has a staff of 60 and offers universal telecommunications services to
small and medium-sized enterprises in Denmark. Over 6000 companies are doing
business with Síminn Danmark, with approximately 50,000 end users. 

The operation of the IT company Sirius IT showed great success in the first
quarter. The project backlog was good and gross profit almost doubled between
years. Although operations were particularly successful in Denmark, the biggest
impact stemmed from the streamlining measures taken in Norway and Sweden last
year, which have resulted in significantly improved results. In general, the
operating prospects for Sirius IT over the coming months are very good. 

Further information:
Brynjólfur Bjarnason, CEO
Tel: +354 550-6003
Pétur Þ. Óskarsson, VP Corporate Communication
Tel: +354 863-6075

About Skipti hf.
Skipti is a holding company engaged in the operation of enterprises in the
telecommunications and IT industry. The Group comprises Síminn, Míla, Já,
Skjárinn, Sensa, Tæknivörur, On-Waves and Radiomiðun. Overseas subsidiaries are
the telecommunications company Aerofone in the United Kingdom, Síminn Danmark
in Denmark and the information technology company Sirius IT, which has
operations in Norway, Sweden and Denmark.