Supplements its previously released year-end report for 1997

NETCOM SYSTEMS AB ("NETCOM") SUPPLEMENTS ITS PREVIOUSLY RELEASED YEAR-END REPORT FOR 1997 New York and Stockholm - Tuesday February 24, 1998 - NetCom Systems AB ("NetCom") (Nasdaq : NECSY), the leading alternative provider of telecommunication services in Scandinavia, today announced its statutory accounts for the twelve months ended December 31, 1997 incorporating the results of its associate undertaking NetCom ASA for the same period. At the time of NetCom's disclosure of its 1997 financial results on February 9, 1998, NetCom ASA, a listed associate undertaking had not finalized its year end accounts and therefore only results for the first nine months ended September 30, 1997 were incorporated. The disclosure of NetCom's statutory accounts incorporates financial results for the twelve months ended December 31, 1997 for the associate undertaking. The effect on NetCom's statutory accounts of incorporating NetCom ASA's financial results for the twelve month period has been a net MSEK (9) comprising of an increased share of losses of associated companies of MSEK (13) and a deferred tax income of MSEK 4. There has also been an adjustment to non restricted equity to reflect the total share of associated company losses. FINANCIAL HIGHLIGHTS (in MSEK) 1997 1996 % Change Operating Revenue 4,036 2,872 41 Operating Profit Before depreciation and amortization 1,001 652 54 After depreciation and 392 254 54 amortization Gain/loss after 1 (287) - financial items but before exceptional items* Gain for the year after 49 248 - tax** * The 1997 figure excludes a deferral to the first quarter of 1997 of MSEK (38) relating to NetCom ASA's fourth quarter of 1996 financial results. The 1996 comparative figure excludes an exceptional gain of MSEK 316 relating to the initial public offering of NetCom ASA. The financial costs include a non-recurring cost of MSEK 45 in connection with the refinancing. ** The 1997 figures includes a deferral to the first quarter of 1997 of MSEK (38) relating to NetCom ASA's fourth quarter of 1996 financial results. The 1996 comparative figure includes an exceptional gain of MSEK 316 relating to the initial public offering of NetCom ASA. The figures also include a net tax income of MSEK 86 in 1997 and 242 MSEK in 1996. The financial costs include a non-recurring cost of MSEK 45 in connection with the refinancing. NetCom ASA Total subscribers for the 12 month period ended December 31, 1997, were 417,477 representing an increase of 47 % and representing an approximate one third share of the Norwegian GSM market. Average customer monthly minutes of use increased by 40 minutes to 133 minutes and average monthly revenue per subscriber increased by 19 % during the year to NOK 365. In 1997, NetCom ASA launched a prepaid card which has resulted in lower retailer commissions being paid. Financial results for the twelve months ended December 31, 1997 NetCom ASA's operating revenues for the 12 months ended December 31, 1997, were MNOK 1,714, an increase of 73 % compared to the MNOK 989 reported in 1996. Operating losses after depreciation and amortization in 1997, amounted to MNOK (24), compared to a loss of MNOK (426) in 1996. NetCom ASA's loss for the year amounted to MNOK (186) compared to (577) in 1996. NetCom System's percentage share of NetCom ASA's loss amounts to 25.02 %. NetCom System's share of associated companies losses in 1997 included a charge for goodwill depreciation of MSEK 31 relating to NetCom ASA. Financial results for the three months ended December 31, 1997 NetCom ASA's operating revenues for the three months ended December 31, 1997 were MSEK 508, an increase of 90 % compared to the MSEK 267 reported in the same period of 1996. Operating losses after depreciation and amortization amounted to MNOK (18), compared to a loss of MNOK (270) in the comparative period of 1996. NetCom ASA's loss for the fourth quarter amounted to MNOK (50) compared to (304) in 1996. For more information about NetCom ASA, please 1997 1996 Operating revenue 4,036 2,872 Operating expenses (3,850) (2,694) Other revenues 217 86 Other expenses (11) (10) Operating profit 392 254 Share of losses of (81) (199) associated companies Non-recurring items* (38) 316 Net interest and other (310) (342) financial expenses** Loss/gain after financial (37) 29 items Taxes*** 86 242 Minority interest - (23) Gain for the year 49 248 Earnings per share after tax 0.57 SEK2.78 SEK and after full conversion * The 1997 figure relates to a deferral to the first quarter of 1997 of NetCom ASA's fourth quarter of 1996 financial results. The 1996 comparative figure includes an exceptional gain of MSEK 316 relating to the initial public offering of NetCom ASA. ** Includes the expensing of one off interest costs in 1997 totaling MSEK 45 associated with loan agreements preceding the refinancing of the total group. *** In the year ended 1996, deferred tax assets increased significantly as a result of the ownership structure of companies within the Group, which increased the ability to utilize tax losses carried forward. The tax income of 1997 includes a deferred tax income mainly relating to NetCom ASA and also to the sale of shares in SCD Invest AB. REVIEW OF THE GROUP (MSEK) 1997* 1996 Operating revenue by business area Comviq GSM AB 2,095 1,551 Tele2 AB 1,686 1,312 Kabelvision 241 42 Other operations, operations 277 40 abroad included Parent company 3 -- Group adjustments, for (266) (73) internal sales Total 4,036 2,872 Operating profit by business area Comviq GSM AB 444 216 Tele2 AB 211 153 Kabelvision (9) (7) Other operations, operations (121) (57) abroad included Parent company (60) (25) Group adjustments, (73) (26) depreciation Total 392 254 Gain/loss after financial items Comviq GSM AB 214 (72) Tele2 AB 154 103 Kabelvision (37) (19) Other operations, operations (137) (71) abroad included Parent company (39) (3) Shares of loss in associated (81) (199) companies Non-recurring items** (38) 316 Group adjustments, (73) (26) depreciation Total (37) 29 * Figures are stated prior to the inclusion of several companies into Tele2 AB. ** The 1997 figure includes NetCom's proportional share of NetCom ASA's results for the nine month period ended September 30, 1997. The 1996 comparative includes a twelve month figure for NetCom ASA relating to the financial year September 1995 to September 1996. The 1996 comparative figure also includes an exceptional gain of MSEK 316 relating to the initial public offering of NetCom ASA. CONSOLIDATED BALANCE SHEET (MSEK) 1997 1996 DecemberDecember 31 31 Fixed assets Intangible assets 1,707 1,889 Property, plant and 4,583 3,880 equipment Financial investments* 624 624 6,914 6,393 Current assets Materials and supplies 9 11 Current receivables 1,182 903 Cash 579 220 1,770 1,134 Total assets 8,684 7,527 Shareholders' Equity Restricted equity 4,332 3 484 Non restricted equity ** (1,176) (1,208) 3,156 2,276 Minority interest 2 2 Long-term liabilities Interest-bearing liabilities 4,146 3,412 Convertible debenture loan 37 647 Interest-free liabilities - 10 4,183 4,069 Short-term liabilities Interest-bearing liabilities 4 69 Interest-free liabilities 1,339 1,111 1,343 1,180 Total equity and liabilities 8,684 7,527 * The figures include deferred tax of MSEK 580 and MSEK 489 respectively. ** The non restricted equity includes capital shares of associated companies of MSEK (304) and MSEK (217) respectively. ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1998/02/24/19990201BIT00490/bit0001.doc