2ND QUARTER 2019 – FINANCIAL REPORT for the three month period ended June 30, 2019

DIGI COMMUNICATIONS N.V. ("Digi")

(the "COMPANY")

(Digi, together with its direct and indirect consolidated subsidiaries are referred to as the "Group")

FINANCIAL REPORT (the "REPORT") for the three month period ended June 30, 2019

This Unaudited Condensed Consolidated Interim Financial Report for the period ended 30 June 2019 refers to the Unaudited Condensed Consolidated Interim Financial Statements prepared in accordance with IAS 34 "Interim Financial Reporting".

Important Information4
Cautionary Note Regarding Forward-Looking Statements 5
Operating and Market Data 5
Non-Gaap Financial Measures 6
Rounding 6
Management's Discussion and Analysis of Financial Condition and Results of Operations7
Overview 8
Recent Developments 8
Historical Results of Operations 12
Main variations of assets and liabilities as at June 30, 2019 19
Management Statement for the Interim Condensed Consolidated Financial Statements of Digi
Communications NV Group for the six month period ended 30 June 201920
Management Statement for the Interim Condensed Consolidated Financial Statements of Digi Communications NV Group for the six month period ended 30 June 2019 21

Condensed Consolidated Interim Financial Report

Important Information

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this Report are not historical facts and are forward-looking. Forward-looking statements include statements concerning our plans, expectations, projections, objectives, targets, goals, strategies, future events, future operating revenues or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, our competitive strengths and weaknesses, our business strategy, and the trends we anticipate in the industries and the political and legal environments in which we operate and other information that is not historical information.

Words such as "believe," "anticipate," "estimate," "target," "potential," "expect," "intend," "predict," "project," "could," "should," "may," "will," "plan," "aim," "seek" and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements.

The forward-looking statements contained in this Report are largely based on our expectations, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors, some of which are discussed below. Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control. In addition, management's assumptions about future events may prove to be inaccurate. We caution all readers that the forward-looking statements contained in this report are not guarantees of future performance, and we cannot assure any reader that such statements will be realized or the forward-looking events and circumstances will occur.

By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, many of which are beyond our control, and risks exist that the predictions, forecasts, projections and other forwardlooking statements will not be achieved. You should be aware that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors include, without limitation, various risks related to our business, risks related to regulatory matters and litigation, risks related to investments in emerging markets, risks related to our financial position as well as risks related to the notes and the related guarantee.

Any forward-looking statements are only made as of the date of this Report. Accordingly, we do not intend, and do not undertake any obligation, to update forward-looking statements set forth in this Report. You should interpret all subsequent written or oral forward-looking statements attributable to us or to persons acting on our behalf as being qualified by the cautionary statements in this Report. As a result, you should not place undue reliance on such forward-looking statements.

Operating and Market Data

Throughout this Report, we refer to persons who subscribe to one or more of our services as customers. We use the term revenue generating unit ("RGU") to designate a subscriber account of a customer in relation to one of our services. We measure RGUs at the end of each relevant period. An individual customer may represent one or several RGUs depending on the number of our services to which it subscribes. More specifically:

for our cable TV and DTH services, we count each basic package that we invoice to a customer as an RGU, without counting separately the premium add-on packages that a customer may subscribe for;
for our fixed internet and data services, we consider each subscription package to be a single RGU;
for our fixed-line telephony services, we consider each phone line that we invoice to be a separate RGU, so that a customer will represent more than one RGU if it has subscribed for more than one phone line; and
for our mobile telecommunication services we consider the following to be a separate RGU: (a) for pre-paid services, each mobile voice and mobile data SIM with active traffic in the last month of the relevant period, except for Romania where pre-paid RGUs are not included due to low usage and small number of users; and (b) for post-paid services, each separate SIM on a valid contract.

As our definition of RGUs is different for our different business lines, you should use caution when comparing RGUs between our different business lines. In addition, since RGUs can be defined differently by different companies within our industry, you should use caution in comparing our RGU figures to those of our competitors.

We use the term average revenue per unit ("ARPU") to refer to the average revenue per RGU in a business line, geographic segment or the Group as a whole, for a period by dividing the total revenue of such business line, geographic segment, or the Group, for such period, (a) if such period is a calendar month, by the total number of RGUs invoiced for services in that calendar month; or (b) if such period is longer than a calendar month, by (i) the average number of relevant RGUs invoiced for services in that period and (ii) the number of calendar months in that period. In our ARPU calculations we do not differentiate between various types of subscription packages or the number and nature of services an individual customer subscribes for. Because we calculate ARPU differently from some of our competitors, you should use caution when comparing our ARPU figures with those of other telecommunications companies.

In this Report RGUs and ARPU numbers presented under the heading "Other" are the RGUs and ARPU numbers of our Italian subsidiary.

Non-Gaap Financial Measures

In this report, we present certain financial measures that are not defined in and, thus, not calculated in accordance with IFRS, U.S. GAAP or generally accepted accounting principles in any other relevant jurisdiction. This includes EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin (each as defined below). Because these measures are not standardized, companies can define and calculate these measures differently, and therefore we urge you not to use them as a basis for comparing our results with those of other companies.

We calculate EBITDA by adding back to our consolidated operating profit or loss charges for depreciation, amortization and impairment of assets. Adjusted EBITDA is EBITDA adjusted for the effect of non-recurring and one-off items, as well as mark-to-market results (unrealised) from fair value assessment of energy trading contracts. Adjusted EBITDA Margin is the ratio of Adjusted EBITDA to the sum of our total revenue and other operating income (other than mark-to-market gain/(loss) from fair value assessment of energy trading contracts). EBITDA, Adjusted EBITDA or Adjusted EBITDA Margin under our definition may not be comparable to similar measures presented by other companies and labelled "EBITDA", "Adjusted EBITDA" or "Adjusted EBITDA Margin," respectively. We believe that EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are useful analytical tools for presenting a normalized measure of cash flows that disregards temporary fluctuations in working capital, including due to fluctuations in inventory levels and due to timing of payments received or payments made. Since operating profit and actual cash flows for a given period can differ significantly from this normalized measure, we urge you to consider these figures for any period together with our data for cash flows from operations and other cash flow data and our operating profit. You should not consider EBITDA, Adjusted EBITDA or Adjusted EBITDA Margin as substitutes for operating profit or cash flows from operating activities.

In Note 3 to the Interim Financial Statements, as part of our "Other" segment we reported EBITDA of (i) our Italian operations, together with operating expenses of Digi. In this Report, EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin represent the results of our Romanian, Hungarian, Spanish and Italian subsidiaries and operating expenses of Digi.

Rounding

Certain amounts that appear in this Report have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

Management's Discussion and Analysis of Financial Condition and Results of Operations

2nd Quarter 2019 – Financial Report pag. 7

/Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the financial condition and results of operations of the Group should be read in conjunction w i t h t h e unaudited interim condensed consolidated financial statements of the Group as of June 30, 2019.

The following discussion includes forward-looking statements based on assumptions about our future business. Our actual results could differ materially from those contained in these forward-looking statements as a result of many factors, including but not limited to those described in sections captioned "Forward-Looking Statements" of this Report.

Overview

We are a leading provider of telecommunication services in Romania and Hungary, based on the number of RGUs (Sources: Group and peer reporting). Our offerings in both countries include cable and DTH television services, fixed internet and data and fixed-line telephony. Our fixed telecommunication and entertainment services are offered through our technologically-advanced fiber-optic network. Our cable and DTH television subscribers enjoy access to custom-made channels and pay-to-view services, which carry premium movies and sports content, as well as various third-party products. We also operate one of the most technologically-advanced mobile networks in Romania, which shares the backbone of our fixed fiber-optic infrastructure. In addition, we provide mobile telecommunication services as an MVNO in Spain and Italy. In Spain we also provide fixed internet and data and fixed-line telephony services as resale products.

For the three months ended June 30, 2019, we had revenues of €294.1 million, net profit of €20.8 million and Adjusted EBITDA of €108.7 million.

In connection with the Company's decision to issue in February 2019 an additional €200 million senior secured notes due 2023, the Company was required to re-issue financial information for the nine months period ended 30 September 2018. As a result of this, the Company made certain changes compared to the original financial statements. In line with these changes, the Company also restated the six months period ended 30 June 2018, in order to account for recognition of deferred green certificates (revenues of €4.2 million).

Also, given the short timing between the acquisition date of Invitel (30 May 2018) and the preparation of the Interim Condensed Consolidated Financial Statements as at 30 June 2018, we did not consolidate Invitel to Digi Group. By 30 June 2019, the Purchase Price Allocation ("PPA") analysis for Invitel acquisition was finalised and therefore, we have restated the Interim Condensed Consolidated Financial Statements for the six months period ended 30 June 2018 to account for Invitel's assets, liabilities and result.

Recent Developments

Starting from May 27, 2019 we have launched mobile telephony services in Hungary through our local network. We are testing the network, therefore this offering is limited to our existing customers for the moment.

On 30 July 2019, RCS & RDS S.A. (the Company's subsidiary in Romania – "RCS&RDS"), as borrower and original guarantor, Digi Távközlési és Szolgáltató Korlátolt Felelősségű Társaság (RCS & RDS S.A.'s subsidiary in Hungary – "Digi Kft."), as borrower and original guarantor, the Company, as borrower, original guarantor and parent, Invitel Távközlési Zrt, as original guarantor, Citibank, N.A., London Branch, ING Bank N.V. and Unicredit Bank S.A., as mandated lead arrangers, Unicredit Bank S.A., as original issuing bank, and ING Bank N.V. as the agent of the other finance parties and several other financial institutions as original lenders, have concluded a syndicated multicurrency facility agreement consisting of two facilities in RON, EUR and HUF(the "Syndicated Facility Agreement").

The Syndicated Facility Agreement is granted for 12 months, with the possibility of extension up to 24 months from the execution date of the Syndicated Facility Agreement. The value of the Syndicated Facility Agreement is €150 million and may be increased up to €250 million (or its equivalent in other currencies).

The Syndicated Facility Agreement is meant to be used by the Company and its subsidiaries for the purpose of investments.

For details regarding the up-date of the litigations, please see Note 16 (c) from the Interim Consolidated Condensed Financial Statements as at 30 June 2019.

Basis of Financial Presentation

The Group prepared its Interim Financial Statements as of June 30, 2019 in accordance with IFRS as adopted by the EU. For the periods discussed in this Report, the Group's presentation currency was the euro. The Group's financial year ends on December 31 of each calendar year.

Functional Currencies and Presentation Currency

Each Group entity prepares individual financial statements in its functional currency, which is the currency of the primary economic environment in which such entity operates. As our operations in Romania and Hungary generated approximately 63% and 19%, respectively, of our consolidated revenue for the three months ended June 30, 2019 our principal functional currencies are the Romanian leu and the Hungarian forint.

The Group presents its consolidated Interim Financial Statements in euros. The Group uses the euro as the presentation currency of its consolidated Interim Financial Statements because management analysis and reporting is prepared in euros, as the euro is the most used reference currency in the telecommunication industry in the European Union.

Presentation of Revenue and Operating Expenses

Our Board of Directors evaluates business and market opportunities and considers our results primarily on a country by country basis. We currently generate revenue and incur operating expenses in Romania, Hungary, Spain and Italy. Revenue and operating expenses from our operations are broken down into the following geographic segments: Romania, Hungary, Spain and Other (the Other segment includes Italy).

In line with our management's consideration of the Group's revenue generation we further break down revenue generated by each of our four geographic segments in accordance with our five principal business lines: (1) cable TV; (2) fixed internet and data; (3) mobile telecommunication services; (4) fixed-line telephony; and (5) DTH.

Exchange rates

In the three month period ended June 30, 2019 the Romanian leu has depreciated with approximately 2% and the Hungarian forint has depreciated with approximately 2%, comparing it with the three month period ended June 30, 2018.

The following table sets out, where applicable, the period end and average exchange rates for the periods under review of the euro against each of our principal functional currencies and the U.S. dollar, in each case as reported by the relevant central bank on its website (unless otherwise stated):

Value of one euro in the relevant currency	As at and for the three months	ended June 30,	As at and for the six months ended June 30,
	2018	2019	2018	2019
Romanian leu (RON) (1)
Period end rate	4.66	4.74	4.66	4.74
Average rate	4.65	4.75	4.65	4.74
Hungarian forint (HUF)(2)
Period end rate	328.6	323.5	328.6	323.5
Average rate	317.0	323.04	314.0	320.5
U.S. dollar (USD)(1)
Period end rate	1.16	1.14	1.16	1.14
Average rate	1.19	1.12	1.21	1.13

(1) According to the exchange rates published by the National Bank of Romania.

(2) According to the exchange rates published by the Central Bank of Hungary.

In the three months ended June 30, 2019, we had a net foreign exchange gain (which is recognized in net finance result on our statement of comprehensive income) of €2.7 million. In the three months ended June 30, 2018, we had a net foreign exchange loss (which is recognized in net finance result on our statement of comprehensive income) of €7.8 million.

In the six months ended June 30, 2019, we had a net foreign exchange loss (which is recognized in net finance result on our statement of comprehensive income) of €8.2 million. In the six months ended June 30, 2018, we had a net foreign exchange loss (which is recognized in net finance income on our statement of comprehensive income) of €5.5 million.

Growth in Business, RGUs and ARPU

Our revenue is mostly a function of the number of our RGUs and ARPU. Neither of these terms is a measure of financial performance under IFRS, nor have these measures been reviewed by an outside auditor, consultant or expert. Each of these measures is derived from management estimates. As defined by our management, these terms may not be comparable to similar terms used by other companies.

The following table shows our RGUs (thousand) and monthly ARPU (€/month) by geographic segment and business line as at and for the three month period ended June 30, 2018 and 2019:

	As at and for the three months ended	% change
RGUs (thousand)/ARPU (€/month)	June 30,
	2018	2019
Romania
Cable TV
RGUs	3,148	3,447	9.5%
ARPU	5.1	5.3	3.9%
Fixed internet and data
RGUs
Residential	2,237	2,470	10.4%
Business	147	166	12.9%
ARPU
Residential	4.9	4.8	-2.0%
Business	28.5	26.2	-8.1%
Mobile telecommunication services(1)
RGUs	3,367	3,383	0.5%
ARPU	4.4	4.8	9.1%
Fixed-line telephony
RGUs
Residential	1,092	1,000	-8.4%
Business	133	133	0.0%
ARPU
Residential	1.30	1.30	0.0%
Business	3.4	3.3	-2.9%
DTH
RGUs	564	517	-8.3%
ARPU	4.8	5.1	6.3%

Hungary(5)
Cable TV
RGUs	684	696	1.8%
ARPU	8.2	8.0	-2.4%
Fixed internet and data
RGUs	730	757	3.7%
ARPU	7.4	8.8	18.9%
Mobile telecommunication services(2)
RGUs	17	56	229.4%
ARPU	6.2	3.7	-40.3%
Fixed-line telephony
RGUs	718	691	-3.8%
ARPU	2.1	2.4	14.3%
DTH
RGUs	299	276	-7.7%
ARPU	9.2	9.1	-1.1%

RGUs (thousand)/ARPU (€/month)	As at and for the three months ended June 30,	% change
	2018	2019
Spain
Fixed internet and data
RGUs	-	33	0.0%
ARPU	-	24.3	0.0%
Mobile telecommunication services(1)(3)
RGUs	1,124	1,634	45.4%
ARPU	9.5	9.4	-1.1%
Fixed-line telephony
RGUs	-	13.0	0.0%
ARPU	-	3.2	0.0%
Other(4)
Mobile telecommunication services(1)(3)
RGUs	209	213	1.9%
ARPU	9.7	8.9	-8.2%

(1) Includes mobile telephony and mobile internet and data RGUs.

(2) Includes mobile internet and data services offered as a reseller through the Telenor network under our "Digi" brand. Starting from May 27, 2019 it also includes mobile telephony RGUs using our local network.

(3) As an MVNO through Telefónica's network in Spain and TIM's network in Italy.

(4) Includes Italy.

(5) For the three months ended at June 30, 2019, RGUs and ARPUs for Hungary include the consolidated RGUs and ARPUs for Digi Hungary and Invitel. Comparative information for prior period has been restated accordingly.

Historical Results of Operations

Results of Operations for the three and six months ended June 30, 2018 and 2019

	As at and for the three months		As at and for the six months
	ended		ended June 30,
	June 30,
	2018	2019	2018	2019
(€ millions)
Revenues
Romania(1)	175.4	187.5	339.4	368.8
Hungary(2)	43.1	55.4	80.4	110.4
Spain	30.4	46.6	57.5	87.3
Other	6.1	5.7	11.7	11.0
Elimination of intersegment revenues	(1.3)	(1.2)	(2.5)	(2.3)
Total revenues	253.7	294.1	486.4	575.2
Other income	3.0	-	7.2	-
Other expenses	(5.8)	(0.3)	(8.9)	(2.5)
Operating expenses
Romania	(106.0)	(103.9)	(205.7)	(212.8)
Hungary(2)	(35.8)	(39.3)	(65.2)	(84.7)
Spain	(23.5)	(36.7)	(44.2)	(68.9)
Other	(8.1)	(6.6)	(14.7)	(11.7)
Elimination of intersegment expenses	1.3	1.2	2.5	2.3
Depreciation, amortization and
impairment of tangible and intangible	(54.8)	(70.3)	(101.9)	(143.7)
assets
Total operating expenses	(227.0)	(255.7)	(429.4)	(519.5)
Operating profit	23.8	38.0	55.4	53.2

Finance income	0.0	2.7	0.1	6.8
Finance expense	(20.4)	(18.5)	(31.5)	(48.3)
Net finance costs	(20.4)	(15.7)	(31.4)	(41.5)
Profit before taxation	3.4	22.3	24.0	11.7
Income tax expense	(5.4)	(1.5)	(11.1)	(8.6)
Profit for the period	(1.9)	20.8	12.9	3.2

(1) The Company restated the 6 months period ending 30 June 2018 to account for deferred green certificates , with an impact in revenues of €4.2 million

(2) Invitel's results are consolidated into the Group's results for the period ended June 30, 2019. Comparative information for prior periods has been restated accordingly,

Revenue

Our revenue (excluding intersegment revenue and other income) for the three month period ended June 30, 2019 was €294.1 million, compared with €253.7 million for the three month period ended June 30, 2018, an increase of 15.9%.

Our revenue (excluding intersegment revenue and other income) for the six month period ended June 30, 2019 was €575.2 million, compared with €486.4 million for the six month period ended June 30, 2018, an increase of 18.3%.

The following table shows the distribution of revenue by geographic segment and business line for the three and six month period ended June 30, 2018 and 2019:

	As at and for the three months ended June 30,			As at and for the six months ended June 30,
	2018		% 2019 change	2018	2019	% change
(€ millions)
Romania
Cable TV	47.2	54.5	15.5%	93.7	105.6	12.7%
Fixed internet and data	44.8	48.4	8.0%	89.0	95.1	6.9%
(2) Mobile telecommunication services	44.4	49.3	11.0%	88.1	95.8	8.7%
Fixed-line telephony	5.5	5.3	-3.6%	11.1	10.6	-4.5%
DTH	8.3	7.9	-4.8%	16.7	15.5	-7.2%
(1)(7) Other revenue	24.3	21.3	-12.3%	39.0	44.7	14.6%
Total	174.5	186.7	7.0%	337.6	367.2	8.8%
(6) Hungary
Cable TV	13.9	16.6	19.4%	26.1	33.6	28.7%
Fixed internet and data	12.5	19.9	59.2%	22.5	38.9	72.9%
(3) Mobile telecommunication services	0.2	0.2	0.0%	0.5	0.5	0.0%
Fixed-line telephony	3.2	5.1	59.4%	4.8	10.3	114.6%
DTH	8.1	7.5	-7.4%	16.3	15.0	-8.0%
(1) Other revenue	5.2	6.1	17.3%	10.2	12.1	18.6%
Total	43.1	55.4	28.5%	80.4	110.4	37.3%
Spain
Fixed internet and data	0.0	1.9	0.0%	0.0	2.8	0.0%
(2)(4) Mobile telecommunication services	30.2	44.3	46.7%	57.0	83.7	46.8%
Fixed-line telephony	0.0	0.1	0.0%	0.0	0.2	0.0%
(1) Other revenue	0.0	0.1	0.0%	0.0	0.2	0.0%
Total	30.2	46.4	53.6%	57.1	86.9	52.2%
(5) Other
(2)(4) Mobile telecommunication services	5.9	5.5	-6.8%	11.3	10.7	-5.3%
(1) Other revenue	0.0	0.0	0.0%	0.1	0.0	-100.0%
Total	5.9	5.5	-6.8%	11.4	10.7	-6.1%
Total	253.7	294.1	15.9%	486.4	575.2	18.3%

(1) Includes sales of CPE (primarily mobile handsets and satellite signal receivers and decoders), own content to other operators, advertising revenue from own TV and radio channels and sundry penalties invoiced to subscribers, as the case may be.

(2) Includes mobile telephony and mobile internet and data revenue.

(3) Represents mobile internet and data revenue generated as a reseller through Telenor's local network. Starting from May 27, 2019 it also includes mobile telephony revenue generated through our network.

(4) Represents mobile telephony and internet and data revenue from our MVNO operations (Telefónica's network in Spain and TIM's network in Italy).

(5) Includes revenue from operations in Italy.

(6) Invitel's results are consolidated into the Group's results for the period ended June 30, 2019. Comparative information for prior periods

has been restated accordingly,

(7) The Company restated the 6 months period ending 30 June 2018 to account for deferred green certificates, with an impact in revenues of €4.2 million

Revenue in Romania for the three month period ended June 30, 2019 was €186.7 million compared with €174.5 million for the three month period ended June 30, 2018, an increase of 7.0%. Revenue growth in Romania was the result of both the increase in telecommunication services prices starting with March 2019 and the increase in our cable TV and fixed internet and data RGUs. Our cable TV RGUs increased from approximately 3,148 thousand as at June 30, 2018 to approximately 3,447 thousand as at June 30, 2019, an increase of approximately 9.5%, and our residential fixed internet and data RGUs increased from approximately 2,237 thousand as at June 30, 2018 to approximately 2,470 thousand as at June 30, 2019, an increase of approximately 10.4%. These increases were primarily due to our investments in expanding of our fixed fiber-optic network and to our attractive fixed internet and data packages. Mobile telecommunication services RGUs slightly increased from approximately 3,367 thousand as at June 30, 2018 to approximately 3,383 thousand as at June 30, 2019, an increase of approximately 0.5%. Growth in mobile telephony subscribers is partially off-set by the decrease of mobile internet sticks RGUs. Mobile telecommunication services ARPU increased to an average €4.8/month for the three month period ended June 30, 2019, compared to an average €4.4/month for the three month period ended June 30, 2018, an increase of approximately 9.1%, primarily as a result of subscription prices increase and customers generating more voice and internet and data traffic. Growth in our mobile telecommunication services, cable TV, fixed internet and data was partially offset by a decrease in revenue generated by our DTH and fixed-line telephony businesses as a result of decreases in RGUs in both business lines. DTH RGUs decreased from 564 thousand as at June 30, 2018 to 517 thousand as at June 30, 2019, a decrease of approximately 8.3%. This decrease was primarily driven by a number of DTH subscribers terminated their contracts, moved to our competitors or migrated from our DTH services to our cable TV services. Residential fixed-line telephony RGUs decreased from approximately 1,092 thousand as at June 30, 2018 to approximately 1,000 thousand as at June 30, 2019, a decrease of approximately 8.4%, as a result of the general trend away from fixed-line telephony and towards mobile telecommunication services.

Other revenues include mainly sales of equipment, but also contains services of filming sport events and advertising revenue. Sales of equipment includes mainly mobile handsets and other equipment.

Revenue in Hungary for the three month period ended June 30, 2019 was €55.4 million, compared with €43.1 million for the three month period ended June 30, 2018, an increase of 28.5%. This increase was mainly due to our acquisition of Invitel on May 30, 2018 and to the increase in fixed services prices starting with March 2019.

Our cable TV RGUs increased from approximately 684 thousand as at June 30, 2018 to approximately 696 thousand as at June 30, 2019, an increase of approximately 1.8% and our fixed internet and data RGUs increased from approximately 730 thousand as at June 30, 2018 to approximately 757 thousand as at June 30, 2019, an increase of approximately 3.7%. These increases were the result of our investments in expanding of our fixed fiber-optic network and to our attractive fixed internet and data packages. Our fixed-line telephony RGUs decreased from approximately 718 thousand as at June 30, 2018 to approximately 691 thousand as at June 30, 2019, a decrease of approximately 3.8%. Our DTH RGUs decreased from approximately 299 thousand as at June 30, 2018 to approximately 276 thousand as at June 30, 2019, a decrease of approximately 7.7%. A number of DTH subscribers terminated their contracts, moved to our competitors or migrated from our DTH services to our cable TV services. Starting from May 27, 2019 we have launched mobile telephony services in Hungary through our local network. We

Revenue in Spain for the three month period ended June 30, 2019 was €46.4 million, compared with €30.2 million for the three month period ended June 30, 2018, an increase of 53.6%. The increase in our Spain revenue was due to the increase in mobile telecommunication services RGUs from approximately 1,124 thousand as at June 30, 2018 to approximately 1,634 thousand as at June 30, 2019, an increase of approximately 45.4%. This was primarily due to new customer acquisitions as a result of more attractive and affordable mobile and data offerings. Fixed internet and fixed telephony services were launched by DIGI Spain towards the end of September 2018, as a resale product on Telefónica's network, and generated revenue of €2.0 million for the three month period ended June 30, 2019.

are testing the network, therefore this offering is limited to our existing customers for the moment.

Revenue in Other represented revenue from our operations in Italy and for the three month period ended June 31, 2019 was €5.5 million, compared with €5.9 million for the three month period ended June 30, 2018, a decrease of 6.8%. The decrease in our revenue in Italy was primarily due to customers being attracted by lower value offerings. Mobile telecommunication services RGUs increased from approximately 209 thousand as at June 30, 2018 to approximately 213 thousand as at June 30, 2019, an increase of approximately 1.9%.

Total operating expenses

Our total operating expenses (excluding intersegment expenses and other expenses, but including depreciation, amortization and impairment) for the three period ended June 30, 2019 were €255.7 million, compared with €227.0 million for the three month period ended June 30, 2018, an increase of 12.6%, respectively.

Our total operating expenses (excluding intersegment expenses and other expenses, but including depreciation, amortization and impairment) for the six months ended June 30, 2019 were €519.5 million compared with €429.4 million for the six months ended June 30, 2018, an increase of 21.0%.

The following table shows the distribution of operating expenses by geographic segment for the three and six month

period ended June 30, 2018 and 2019:

	As at and for the three months		As at and for the six months
	ended June 30,		ended June 30,
	2018	2019	2018	2019
(€ millions)
Romania	105.6	103.6	205.0	212.1
Hungary( 2 )	35.8	39.3	65.2	84.7
Spain	22.9	36.1	43.1	67.8
(1) Other	7.8	6.4	14.2	11.3
Depreciation, amortization and impairment of tangible and intangible assets(2)	54.8	70.3	101.9	143.7
Total operating expenses	227.0	255.7	429.4	519.5

(1) Includes operating expenses of operations in Italy and operating expenses of Digi.

(2) Invitel's results are consolidated into the Group's results for the period ended June 30, 2019. Comparative information for prior periods has been restated accordingly,

Operating expenses in Romania for three month period ended June 30, 2019 were €103.6 million, compared with €105.6 million for the three month period ended June 30, 2018, a decrease of 1.9%. This is the result of the decrease of rental expenses as a result of adoption IFRS 16, decrease partially netted of by the increase in salary expenses, programming and interconnection expenses and other taxes.

Operating expenses in Hungary for the three month period ended June 30, 2019 were €39.3 million, compared with €35.8 million for the three month period ended June 30, 2018, an increase of 9.8%. The increase was primarily due to the Invitel acquisition and to a lesser extent to the increase in salaries and programming expenses, elements partially netted off by the decrease of rental expenses as a result of adoption IFRS 16.

In general increases of operating expenses are in line with the development of the business and the building stage of the mobile network.

Operating expenses in Spain for the three month period ended June 30, 2019 were €36.1 million, compared with €22.9 million for the three month period ended June 30, 2018, an increase of 57.6%. The large increase refers mainly to interconnection and salaries expenses as a result of the significant business development.

Operating expenses in Other represented expenses of our operations in Italy and expenses of Digi and for the three month period ended June 30, 2019 were €6.4 million, compared with €7.8 million for the three month period ended June 30, 2018, a decrease of 17.9%. The decrease is mainly the result of other operational expenses and taxes recorded by our holding company.

Depreciation, amortization and impairment of tangible and intangible assets

The table below sets out information on depreciation, amortization and impairment of our tangible and intangible assets for the three and six month period ended June 30, 2018 and 2019.

	As at and for the three months ended June 30,		As at and for the six months ended June 30
	2018(1)	2019	2018(1)	2019
(€ millions)
Depreciation of property, plant and equipment	34.1	34.6	59.7	69.7
Amortization of non-current intangible assets	11.1	11.3	21.1	26.8
Amortization of right of use assets	-	14.1	-	24.5
Amortization of programme assets	9.2	9.9	20.1	21.2
Impairment of property, plant and equipment	0.4	0.4	1.0	1.4
Total	54.8	70.3	101.9	143.7

(1) Invitel's results are consolidated into the Group's results for the period ended June 30, 2019. Comparative information for prior periods has been restated accordingly,

Depreciation of property, plant and equipment

Depreciation of property, plant and equipment was €34.6 million for the three month period ended June 30, 2019, compared with €34.1 million for the three month period ended June 30, 2018, an increase of 1.5%. This variation is the result our continuing development of networks.

Amortization of non-current intangible assets

Amortization of non-current intangible assets was €11.3 million for the three month period ended June 30, 2019, compared with €11.1 million for the three month period ended June 30, 2018, an increase of 1.8%. This was due to increase in subscriber acquisition cost amortization charge in the period.

Amortization of right of use

The Group has adopted IFRS 16 Leases from January 1, 2019. In accordance with the new leases standard requirements, the impact of adoption on our depreciation, amortisation and impairment of tangible and intangible assets for the three months period ended June 30, 2019 was €14.1 million.

Amortization of program assets

Amortization of program assets was €9.9 million for the three month period ended June 30, 2019, compared with €9.2 million for the three month period ended June 30, 2018, an increase of 7.6%.

Other income/(expenses)

We recorded €0.3 million of other expense in the three month period ended June 30, 2019 compared with €5.8 million of other expense in the three months ended June 30, 2018. For 2019, this reflected accrued expenses for the period in amount of €0.3 million related to the share option plan approved in 2017 and 2018 which are estimated to be one off events. For 2018, this reflected accrued expenses for the period in amount of €3.3 million related to the share option plan approved in 2017 and 2018 which are estimated to be one off events, as well as Invitel's acquisition related costs in amount of €2.5 million.

Starting with January 1, 2019 the electricity contracts are no longer considered for fair value assessment. In the three month period ended June 30, 2018, we recorded a mark-to-market unrealized gain from fair value assessment of energy trading contracts in amount of €3.0 million.

Operating profit (1)

For the reasons set above, our operating profit was €38.0 million for the three month period ended June 30, 2019, compared with €23.8 million for the three month period ended June 30, 2018.

Net finance expense (1)

We recognized net finance loss of €15.7 million in the three month period ended June 30, 2019, compared with a net finance loss of €20.4 million for the three month period ended June 30, 2018.

The net gain from foreign exchange in amount of €2.7 million in the three months period ended June 30, 2019 (compared to a foreign exchange loss of €7.8 million from previous period) has contributed to the increase of the net finance gain.

Interest expenses increased in the current period mainly because of the additional issue of the EUR 200 million Bonds from February 2019, but this is partially offset by the decrease in interest for Senior Facilities from 2016 and 2018 due to the partial repayment in February 2019.

The adoption of IFRS 16 also had an impact of €2.7 million in the interest expense from lease liability for the three months period ended 30 June 2019.

Profit before taxation (1)

For the reasons set forth above, our profit before taxation was €22.3 million in the three month period ended June 30, 2019, compared with loss before taxation of €3.4 million for the three month period ended June 30, 2018.

Income tax expense (1)

An income tax expense of €1.5 million was recognized in the three month period ended June 30, 2019, compared to a tax expense of €5.4 million recognized in the three month period ended June 30, 2018.

Net profit for the period (1)²

For the reasons set forth above, our net profit was €20.8 million in the three month period ended June 30, 2019, compared with net loss of €1.9 million for the three month ended June 30, 2018.

¹ Comparative amounts for the 6 months period ending 30 June 2018 have been restated to account for Invitel consolidation and recognition of deferred green certificates

Liquidity and Capital Resources

Historically, our principal sources of liquidity have been our operating cash flows as well as debt financing. Going forward, we expect to fund our cash obligations and capital expenditures primarily out of our operating cash flows, credit facilities and letter of guarantee facilities. We believe that our operating cash flows will continue to allow us to maintain a flexible capital expenditure policy.

All of our businesses have historically produced positive operating cash flows that are relatively constant from month to month. Variations in our aggregate cash flow during the periods under review principally represented increased or decreased cash flow used in investing activities and cash flow from financing activities.

We have made and intend to continue to make significant investments in the growth of our businesses by expanding our mobile telecommunication network and our fixed fiber optic networks, acquiring new and renewing existing content rights, procuring CPE which we provide to our customers and exploring other investment opportunities on an opportunistic basis in line with our current business model. We believe that we will be able to continue to meet our cash flow needs by the acceleration or deceleration of our growth and expansion plans.

Historical cash flows

The following table sets forth our consolidated cash flows from operating activities for the three and six month period ended June 30, 2018 and 2019, cash flows used in investing activities and cash flows from/(used in) financing activities.

	As at and for the three months		As at and for the six months
	ended June 30,		ended June 30,
	(1) 2018	2019	(1) 2018	2019
(€ millions)
Cash flows from operations before working capital changes	74.6	96.2	154.8	181.4
Cash flows from changes in working capital	12.2	1.6	8.6	(6.7)
Cash flows from operations	86.8	97.9	163.4	174.7
Interest paid	(15.2)	(18.8)	(20.1)	(25.4)
Income tax paid	(1.5)	(2.3)	(2.1)	(3.3)
Cash flow from operating activities	70.1	76.8	141.1	146.0
Cash flow used in investing activities	(193.3)	(85.9)	(270.1)	(160.2)
Cash flows from /(used in) financing activities	129.5	3.1	134.0	17.3
Net decrease in cash and cash equivalents	6.3	(6.0)	5.0	3.0
Cash and cash equivalents at the beginning of the period	14.8	22.9	16.1	13.8
Effect of exchange rate fluctuation on cash and cash equivalent held	0.0	0.0	0.0	0.0
Cash and cash equivalents at the closing of the period	21.1	16.9	21.1	16.9

(1) Comparative amounts for the 6 months period ending 30 June 2018 have been restated to account for Invitel consolidation and recognition of deferred green certificates.

Cash flows from operations before working capital changes were €96.2 million in the three month period ended June 30, 2019 and €74.6 million in the three month period ended June 30, 2018 for the reasons discussed in "— Historical Results of Operations—Results of operations for the three and six month period ended June 30, 2019 and 2018".

The following table shows changes in our working capital:

		For the three months ended June 30,		For the six months ended
				June 30,
	(1) 2018	2019	(1) 2018	2019
(€ millions)
(Increase) in trade receivables and other	(18.6)	(7.9)	(26.1)	(29.8)
assets
(Increase) in inventories	(3.4)	(1.4)	(3.1)	(1.0)
Increase/(decrease) in trade payables			24.4
and other current liabilities		33.2 6.4		19.5
Increase/(decrease) in contract liabilities	1.0	4.6	13.4	4.6
Total	12.2	1.6	8.6	(6.7)

(1) Comparative amounts for the 6 months period ending 30 June 2018 have been restated to account for Invitel consolidation and recognition of deferred green certificates.

We had a working capital surplus of €1.6 million in the three month period ended June 30, 2019 (compared with a working capital surplus of €12.2 million in the three month period ended June 30, 2018). This is the result of the increase of trade payables and other current liabilities; the increase in receivables balances and contract liabilities

(deferred revenue) all in line with the overall business increase.

Cash flows from operating activities were €76.8 million in the three month period ended June 30, 2019 and €70.1 million in the three month period ended June 30, 2018. Included in these amounts are deductions for interest paid and income tax paid. Income tax paid which were €2.3 million in the three months ended June 30, 2019 and €1.5 million in the three months ended June 30, 2018. Interest paid was €18.8 million in the three months ended June 30, 2019, compared with €15.2 million in the three months ended June 30, 2018. The increase in cash flows from operating activities in the three months ended June 30, 2019 was primarily due to changes in working capital discussed above.

Cash flows used for investing activities were €85.9 million in the three month period ended June 30, 2019 and €193.3 million in the three month period ended June 30, 2018.

Purchases of property, plant and equipment were €40.8 million in the three months ended June 30, 2019 and €43.9 million in the three months ended June 30, 2018.

Purchases of intangible assets were €45.1 million in the three months ended June 30, 2019 and €17.3 million in the three months ended June 30, 2018.

Payments for acquisition of subsidiaries were nill for in the three months ended June 30, 2019 and €132.2 million in the three months ended June 30, 2018. The 2018 amount reprepresent the Invitel acquisition.

Cash flows used in (from) financing activities were €3.1 million outflow for the three months period ended June 30, 2019 si €129.5 million outflow for the three months ended June 30, 2018, mainly because of the SFA 2018 drawing from May 2018 for the closing of Invitel transaction.

Main variations of assets and liabilities as at June 30, 2019

Main variations for the consolidated financial position captions as at June 30, 2019 are presented below:

ASSETS

Right of use assets

As a result of the adoption of IFRS 16 in January 2019, the June 30, 2019 accounts comprise a value of €207.9 million rights of use.

Available for sale financial assets (AFS)

The available for sale financial assets of €38.4 million as at June 30, 2019 (December 31, 2018: €32.1 million) comprise of shares in RCSM obtained a result of the Share swap contracts between the Company and minority shareholders in 2017.

Programme assets

As at June 30, 2019 we recorded programme assets in amount of €6.8 million (December 31, 2018: €21.4 million). The decrease is mainly caused by less acquisitions in the period.

LIABILITIES

Interest bearing loans and borrowings

Short term interest bearing loans and borrowings as at June 30, 2019 are in amount of €91.0 million (December 31, 2018: €168.6 million).

Long term interest bearing loans and borrowings as at June 30, 2019 are in amount of €807.5 million (December 31, 2018: €716.2 million)

The variation is mainly the result of the additional Bond issue of €200 million from February 2019 and repayments of borrowings of €186.4 million in the six months period ended 30 June 2019.

Related parties borrowings

On May 12, 2017 RCSM granted a short-term loan to RCS & RDS in amount of €5 million. As at June 30, 2019 the outstanding amount is €0.5 million.

Lease liability

As a result of the adoption of IFRS 16 in January 2019, the June 30, 2019 accounts comprise a value of €206.6 million lease liability.

EQUITY

The share capital of the Company was €6.8 million as at June 30, 2019 (December 31, 2018: €6.9 million), as a result of a conversion of 1.2 million Class A shares into class B shares, which took place in January 2019. As at 30 June 2019, the Company had 5.0 million treasury shares.

Management Statement for the Interim Condensed Consolidated Financial Statements of Digi Communications NV Group for the six month period ended 30 June 2019

/Management's Discussion and Analysis of Financial Condition and Results of Operations

Management Statement for the Interim Condensed Consolidated Financial Statements of Digi Communications NV Group for the six month period ended 30 June 2019

The Board of Directors (the "Board") confirms that to the best of its knowledge, the Interim Condensed Consolidated Financial Statements of Digi Communications NV Group for the period ended 30 June 2019 prepared in accordance with IAS 34 "Interim financial reporting" give a true and fair view of the assets, liabilities, financial position, statement of comprehensive income for Digi Communications NV Group.

The Board declares that the Management Report (Director's report), issued as per Directive 2004/109/EC ("Transparency Directive") and in compliance with art 65 from Law 24/2017 and FSA Regulation no 5/2018 containing analysis of the results for the reported period reflects correct and complete information according to the reality regarding the results and development of Digi Communications NV Group.

Serghei Bulgac, Valentin Popoviciu, CEO Executive Director,

14 August 2019

DIGI COMMUNICATIONS NV

CONDENSED CONSOLIDATED INTERIM FINANCIAL REPORT

PREPARED IN ACCORDANCE WITH IAS 34 INTERIM FINANCIAL REPORTING for the six-month period ended 30 June 2019

CONTENTS Page

GENERAL INFORMATION	-
CONDENSED CONSOLIDATED INTERIM FINANCIAL REPORT (unaudited)	1 - 37
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (unaudited)	1
CONDENSED CONSOLIDATED INCOME STATEMENT (unaudited)	2
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (unaudited)	3
CONDENSED CONSOLIDATED CASH FLOW STATEMENT (unaudited)	4
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (unaudited)	5- 6
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL REPORT (unaudited) 7 - 37

GENERAL INFORMATION

Directors:

Serghei Bulgac

Bogdan Ciobotaru

Valentin Popoviciu

Piotr Rymaszewski

Emil Jugaru

Marius Catalin Varzaru

Zoltan Teszari

Registered Office: Digi Communications N.V. Str. Dr. Nicolae Staicovici, nr. 75, bl. Forum 2000 Building, Faza 1, et. 4, sect. 5, Bucuresti, Romania

Auditors: Ernst & Young Accountants LLP.

GENERAL INFORMATION

In connection with the Company's decision to issue in February 2019 an additional EUR 200,000 senior secured notes due 2023, the Company was required to re-issue financial information for the nine months period ended 30 September 2018. As a result of this, the Company made certain changes compared to the original financial statements. In line with these changes, the Company also restated the six months period ended 30 June 2018, in order to account for recognition of deferred green certificates (revenues of EUR 4,181). For further details please refer to Note 9.

Also, given the short timing between the acquisition date of Invitel ( 30 May 2018) and the preparation of the Interim Condensed Consolidated Financial Statements as at 30 June 2018, we did not consolidate Invitel to Digi Group. By 30 June 2019, the Purchase Price Allocation ("PPA") analysis for Invitel acquisition was finalised and therefore, we have restated the Interim Condensed Consolidated Financial Statements for the six months period ended 30 June 2018 to account for Invitel's assets, liabilities and result. For further details please refer to Note 12.

DIGI Communications N.V.

Condensed Consolidated Statement of financial position (unaudited) for the period 6 month period ended 30 June 2019

(all amounts are in thousand Eur, unless specified otherwise)

	Notes	30 June 2019	31 December 2018
ASSETS
Non-current assets
Property, plant and equipment	4	1,157,860	1,138,992
Intangible assets	5	257,515	245,852
Right of use assets		207,982	-
Financial assets at fair value through OCI		38,436	32,058
Investment in associates		969	970
Long term receivables		3,724	5,584
Other non-current assets		5,126	4,629
Deferred tax assets		2,694	2,659
Total non-current assets		1,674,306	1,430,744
Current assets
Inventories		17,074	16,586
Programme assets	5	6,836	21,379
Trade and other receivables		72,495	60,002
Contract assets	9	49,562	44,076
Income tax receivable		9	547
Other assets		14,869	12,419
Derivative financial assets	14	30,674	33,287
Cash and cash equivalents		16,861	13,832
Total current assets		208,380	202,128
Total assets		1,882,686	1,632,872

EQUITY AND LIABILITIES	6
Equity
Share capital		6,810	6,918
Share premium		13,018	3,406
Treasury shares		(11,667)	(14,527)
Reserves		(15,462)	(18,583)
Retained earnings		149,963	168,825
Equity attributable to equity holders of the parent		142,662	146,039
Non-controlling interest		9,665	7,306
Total equity		152,327	153,345
LIABILITIES
Non-current liabilities
Interest-bearing loans and borrowings, including bonds	7	807,465	716,193
Deferred tax liabilities		63,765	60,652
Lease liabilities		206,648	-
Decommissioning provision		6,159	6,082
Other long term liabilities		41,222	34,600
Total non-current liabilities		1,125,259	817,527
Current liabilities
Trade and other payables		478,317	461,463
Interest-bearing loans and borrowings	7	90,993	168,625
Income tax payable		1,062	543
Derivative financial liabilities	14	-	1,106
Provisions		7,116	7,225
Contract liabilities	9	27,612	23,038
Total current liabilities		605,100	662,000
Total liabilities		1,730,359	1,479,527
Total equity and liabilities		1,882,686	1,632,872

The notes on pages 7 to 38 are an integral part of this condensed consolidated interim financial report.

The condensed consolidated interim financial report was issued on 14 August 2019.

DIGI Communications N.V. Condensed Consolidated Statement of Comprehensive Income (unaudited) for the period ended 30 June 2019 (all amounts are in thousand Eur, unless specified otherwise)

	Notes	Three month period ended 30 June 2019	Three month period ended 30 June 2018

Revenues	9	294,057	253,656
Other income		-	2,991
Operating expenses	10	(255,741)	(226,955)
Other expenses		(319)	(5,846)
Operating Profit		37,997	23,846
Finance income	11	2,742	42
Finance expenses	11	(18,475)	(20,445)
Net finance costs		(15,733)	(20,403)
Profit before taxation		22,264	3,443
Income tax		(1,455)	(5,371)
Net profit for the period		20,809	(1,928)
Other comprehensive income
Items that are or may be reclassified to profit or loss
Foreign operations – foreign currency translation differences		(736)	(5,612)
Available for sale financial asset, net change in fair value		7,857	(2,439)
Movements fair value reserves		-	(837)
Cash Flow hedge reserves		(8)	671
Other comprehensive income/(loss) for the period, net of income tax		7,113	(8,217)
Total comprehensive income/(loss) for the period		27,922	(10,145)

Profit attributable to:
Equity holders of the parent	16,659	(584)
Non-controlling interest	4,150	(1,344)
Profit for the period	20,809	(1,928)

Total comprehensive income/(loss) attributable to:
Equity holders of the parent	23,819	(8,427)
Non-controlling interest	4,103	(1,718)
Total comprehensive income/(loss) for the period	27,922	(10,145)

The notes on pages 7 to 38 are an integral part of this condensed consolidated interim financial report.

The condensed consolidated interim financial report was issued on 14 August 2019.

,,,

DIGI Communications N.V. Condensed Consolidated Statement of Comprehensive Income (unaudited) for the period ended 30 June 2019 (all amounts are in thousand Eur, unless specified otherwise)

	Notes	Six month period ended 30 June 2019	Six month period ended 30 June 2018

Revenues	9	575,236	486,448
Other income		-	7,248
Operating expenses	10	(519,508)	(429,401)
Other expenses		(2,507)	(8,866)
Operating Profit		53,221	55,429

Finance income	11	6,834	58
Finance expenses	11	(48,330)	(31,470)
Net finance costs		(41,496)	(31,412)
Profit before taxation		11,725	24,017

Income tax		(8,563)	(11,133)
Net profit for the period		3,162	12,884

Other comprehensive income
Items that are or may be reclassified to profit or loss
Foreign operations – foreign currency translation differences		(556)	(6,429)
Available for sale financial asset, net change in fair value		6,378	(2,439)
Cash Flow hedge reserves		(76)	478
Other comprehensive income/(loss) for the period, net of income tax		5,746	(8,390)
Total comprehensive income for the period		8,908	4,494

Profit attributable to:
Equity holders of the parent	187	13,233
Non-controlling interest	2,975	(349)
Profit for the period	3,162	12,884
Total comprehensive income attributable to:
Equity holders of the parent	5,974	5,275
Non-controlling interest	2,934	(781)
Total comprehensive income for the period ,,,	8,908	4,494
Basic earnings per share (EUR/share)	0.0	0.1
Diluted earnings per share (EUR/share)	0.0	0.1

The notes on pages 7 to 38 are an integral part of this condensed consolidated interim financial report.

The condensed consolidated interim financial report was issued on 14 August 2019.

DIGI Communications N.V.

Condensed Consolidated Cash Flow Statement (unaudited)

for the 6 month period ended 30 June 2019

(all amounts are in thousand Eur, unless specified otherwise)

	Notes	Six month period ended 30 June 2019	Six month period ended 30 June 2018
Cash flows from operating activities
Profit before taxation		11,725	24,017
Adjustments for:
Depreciation, amortization and impairment	10	143,660	101,949
IFRS 16 rent expense		(24,975)	-
Interest expense, net	11	33,637	21,430
Impairment of trade and other receivables	10	4,093	4,948
Equity settled share-based payments		1,713	7,768
Unrealised losses/ (gains) on derivative financial instruments	15	946	(6,612)
Unrealised foreign exchange loss / (gain)		10,661	1,289
Gain on sale of assets		(16)	(36)
Cash flows from operations before working capital changes		181,444	154,753
Changes in:
Trade receivables, other assets and contract assets		(29,836)	(26,052)
Inventories		(1,012)	(3,093)
Trade payables and other current liabilities		19,534	24,389
Increase in deferred revenue		4,574	13,403
Cash flows from operations		174,704	163,400
Interest paid		(25,415)	(20,136)
Income tax paid		(3,320)	(2,129)
Cash flows from operating activities		145,969	141,135
Cash flow used in investing activities
Purchases of property, plant and equipment		(86,922)	(97,111)
Purchases of intangibles		(73,309)	(40,764)
Acquisition of subsidiaries, net of cash and NCI*		(162)	(46,820)
Invitel loan assignment*		-	(85,551)
Proceeds from sale of property, plant and equipment		194	151
Cash flows used in investing activities		(160,199)	(270,095)
Cash flows from financing activities
Dividends paid to shareholders		(3,717)	(3,122)
Cash outflows from buying back equity shares		(964)	(190)
Proceeds from borrowings		216,450	173,375
Repayment of borrowings		(186,422)	(31,768)
Financing costs paid		(4,464)	(2,122)
Settlement of derivatives		-	(742)
Payment of finance lease obligations		(3,620)	(1,476)
Cash flows used in/from financing activities		17,263	133,955
Net increase / (decrease) in cash and cash equivalents		3,033	4,995
Cash and cash equivalents at the beginning of the period		13,832	16,074
Effect of exchange rate fluctuations of cash and cash equivalents held		(4)	8
Cash and cash equivalents at the end of the period		16,861	21,077

* Included is the consideration paid for the acquisition of Invitel in the amount of EUR 135.4 million paid by Digi Kft. for the completion of transaction on 30 May 2018.

The notes on pages 7 to 38 are an integral part of this condensed consolidated interim financial report.

DIGI Communications N.V.

Condensed Consolidated Statement of Changes in Equity (unaudited)

for the period ended 30 June 2019

(all amounts are in thousand Eur, unless specified otherwise)

	Share capital	Share premium	Treasury shares	Translatio n reserve	Revaluatio n reserve	Fair value reserves	Cash flow hedge reserves	Retained earnings	Total equity attributable to equity holders of the parent	Non controllin g interest	Total equity
											153,345

											3,162
											(556)
											6,378
											(76)
											-

											8,908



											-


											1,713


											(9,885)

											(40)

											(40)
											(9,925)
Balance at 30 June 2019	6,810	13,018	(11,667)	(34,762)	26,654	(7,377)	23	149,963	142,662	9,665	152,327

(1) The amount presented on Cash Flow Hedge reserves is included in Reserves in Statement of financial position.

The notes on pages 7 to 38 are an integral part of this condensed consolidated interim financial report.

DIGI Communications N.V. Condensed Consolidated Statement of Changes in Equity (unaudited) for the period ended 30 June 2019 (all amounts are in thousand Eur, unless specified otherwise)

	Share capital	Share premium	Treasury shares	Translatio n reserve	Revaluatio n reserve	Fair value reserves	Cash flow hedge reserves	Retained earnings	Total equity attributable to equity holders of the parent	Non controllin g interest	Total equity
Balance at 1 January 2018	6,918	3,406	(13,922)	(29,957)	35,120	(3,667)	(248)	138,869	136,519	6,029	142,548
Comprehensive income for the period
Net profit for the period	-	-	-	-	-	-	-	13,233	13,233	(349)	12,884
Foreign currency translation differences	-	-	-	(5,966)	-	-	-	-	(5,966)	(463)	(6,429)
Movements fair value reserves	-	-	-	-	-	(2,439)	-	-	(2,439)	-	(2,439)
Cash Flow hedge reserves(1)	-	-	-	-	-	-	447	-	447	31	478
Transfer of revaluation reserve (depreciation)	-	-	-	-	(3,008)	-	-	3,008	-	-	-
Total comprehensive income/(loss) for the period	-	-	-	(5,966)	(3,008)	(2,439)	447	16,241	5,275	(781)	4,494
Transactions with owners, recognized directly in equity Contributions by and distributions to owners
Equity-settled share-based payment transactions	-	1,845	400	-	-	-	-	4,932	7,177	401	7,578
Dividends distributed	-	-	-	-	-	-	-	(7,037)	(7,037)	(679)	(7,716)
Total contributions by and distributions to owners	-	1,845	400	-	-	-	-	(2,105)	140	(278)	(138)
Changes in ownership interests in subsidiaries Payments while having full control	-	-	-	-	-	-	-	-	-	-	-
Movement in ownership interest while retaining control Total changes in ownership interests in	-	-	-	-	-	-	-	-	-	-	-
subsidiaries
Total transactions with owners	-	1,845	400	-	-	-	-	(2,105)	140	(278)	(138)
Balance at 30 June 2018	6,918	5,251	(13,522)	(35,924)	32,112	(6,106)	199	153,005	141,934	4,970	146,904

(1)The amount presented on Cash Flow Hedge reserves is included in Reserves in Statement of financial position.

The notes on pages 7 to 38 are an integral part of this condensed consolidated interim financial report.

1. CORPORATE INFORMATION

Digi Communications Group ("the Group" or "DIGI Group") comprises Digi Communications N.V., RCS&RDS S.A. and their subsidiaries.

The parent company of the Group is Digi Communications N.V. ("DIGI" or "the Company" or "the Parent"), a company incorporated in Netherlands with place of business and registered office in Romania. The main operations are carried by RCS&RDS S.A (Romania) ("RCS&RDS"), Digi T.S kft (Hungary), Digi Spain Telecom SLU, and Digi Italy SL. DIGI registered office is located in Str. Dr. Nicolae Staicovici, nr. 75, bl. Forum 2000 Building, Faza 1, et. 4, sect. 5, Bucuresti, Romania. On 11 April 2017 the Company changed its name to Digi Communications N.V., its former name being Cable Communications Systems N.V.

RCS&RDS is a company incorporated in Romania and its registered office is located at Dr. Staicovici 75, Bucharest, Romania.

RCS&RDS was setup in 1994, under the name of Analog CATV, and initially started as a cable TV operator in several cities in Romania. In 1996 following a merger with a part of another cable operator (Kappa) the name of the company became Romania Cable Systems S.A. ("RCS").

In 1998 Romania Cable Systems S.A established a new subsidiary Romania Data Systems S.A. ("RDS") for the purposes of offering internet, data and fixed telephony services to the Romanian market. In August 2005, Romania Cable Systems S.A. absorbed through merger its subsidiary Romania Data Systems S.A. and changed its name into RCS&RDS. RCS&RDS evolved historically both by organic growth and by acquisition of telecommunication operators and customer relationships.

The Group provides telecommunication services of Cable TV (television), Fixed and Mobile Internet and Data, Fixed-line and Mobile Telephony ("CBT") and Direct to Home television ("DTH") services in Romania, Hungary, Spain and Italy. The largest operating company of the Group is RCS&RDS.

The controlling shareholder of the DIGI is RCS Management ("RCSM") a company incorporated in Romania. The ultimate shareholder of DIGI is Mr. Zoltan Teszari, the controlling shareholder of RCSM. DIGI and RCSM have no operations, except for holding and financing activities, and their primary asset is the ownership of RCS&RDS and respectively DIGI.

The consolidated financial statements were authorized for issue on 14 August 2019.

2.1 BASIS OF PREPARATION

(a) Statement of compliance

These unaudited interim condensed consolidated financial statements for the six month period ended 30 June 2019 have been prepared in accordance with IAS 34 Interim Financial Reporting. Selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in financial position and performance of the Group since the last annual consolidated financial statements as at and for the year ended 31 December 2018. These interim condensed consolidated financial statements do not include all the information required for full annual financial statements, and should be read in conjunction with the Group's annual financial statements as at 31 December 2018 which were prepared in accordance with International Financial Reporting Standards as adopted by the European Union and part 9 of book 2 of the Dutch Civil code.

2. BASIS OF PREPARATION AND ACCOUNTING POLICIES (continued)

(b) Basis of measurement

The interim condensed consolidated financial statements have been prepared on the historical cost basis, except for buildings, cable plant, equipment and devices and customer premises equipment measured at revalued amount, and except for financial assets at fair value through OCI and derivative financial instruments measured at fair value.

(c) Judgements and estimates

Preparing the interim condensed consolidated financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing these interim condensed consolidated financial statements, significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 December 2018.

(d) Functional and presentation currency

The functional currency as well as the presentation currency for the financial statements of each Group entity is the currency of the primary economic environment in which the entity operates (the local currency).

The interim condensed consolidated financial statements are presented in Euro ("EUR") and all values are rounded to the nearest thousand EUR except when otherwise indicated. The Group uses the EUR as a presentation currency of the interim condensed consolidated financial statements under IFRS based on the following considerations:

management analysis and reporting is prepared in EUR;
EUR is used as a reference currency in telecommunication industry in the European Union;
Main debt finance instruments are denominated in EUR.

The translation into presentation currency of the financial statements of each entity is described under Note 2.2 below.

The assets and liabilities of the subsidiaries are translated into the presentation currency at the rate of exchange ruling at the reporting date (none of the functional currencies of the subsidiaries or the Parent is hyperinflationary for the reporting periods). The income and expenses of the Parent and of the subsidiaries are translated at transaction date exchange rates. The exchange differences arising on the retranslation from functional currency to presentation currency are taken directly to equity under translation reserve. On disposal of a foreign entity, accumulated exchange differences relating to it and previously recognized in equity as translation reserve are recognized in profit or loss as component of the gain or loss on disposal.

Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets and liabilities of the foreign operation and translated at the closing rate.

The following rates were applicable at various time periods according to the National Banks of Romania and Hungary:

Currency		2019			2018
	Jan – 1	Average for the 6 months	Jun – 30	Jan – 1	Average for the 6 months	Jun – 30
RON per 1EUR	4.6639	4.7414	4.7351	4.6597	4.6537	4.6611
HUF per 1EUR	321.51	320.52	323.54	310.14	314.03	328.60
USD per 1EUR	1.1450	1.1298	1.1380	1.1993	1.2106	1.1658

2. BASIS OF PREPARATION AND ACCOUNTING POLICIES (continued)

The Group established vendor financing and reverse factoring agreements with suppliers. In some cases, payment terms are extended in agreements between the supplier and the Group. Depending on the nature of the agreements' clauses, these transactions are classified as trade payables. If these agreements imply extended payment terms, trade payables are classified as long term. Corresponding cash flows are presented as Cash flow from investing or operating activities, as applicable.

2.2. GOING CONCERN

Management believes that the Group will continue as a going concern for the foreseeable future. In the current year and recent years, the Group has managed to achieve consistently strong local currency revenue streams and cash flows from operating activities and has continued to grow the business. These results have been achieved during a period of significant investments in technological upgrades, new services and footprint expansion. The ability to offer multiple services is a central element of DIGI Group strategy and helps the Group to attract new customers, to expand the uptake of service offerings within the existing customer base and to increase customer loyalty by offering high value-for-money package offerings of services and attractive content.

For further information refer to Note 13b) Liquidity risk.

2.3 SIGNIFICANT ACCOUNTING POLICIES

Starting from 1 January 2019, the Group has implemented IFRS 16 which is effective for annual periods beginning on or after 1 January 2019. The rest of the significant accounting policies applied by the Group in this condensed consolidated interim financial report are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 December 2018.

New pronouncements

The accounting policies used are consistent with those of the previous financial year except for the following new and amended IFRSs which have been adopted by the Group as of 1 January 2019.

The Group has initially adopted IFRS 16 Leases from January 1, 2019. The effects of this standard are described in the following paragraphs and notes below.

IFRS 16: Leases

IFRS 16 was issued in January 2016 and it replaces IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease, SIC-15 Operating Leases-Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under IAS 17. The standard includes two recognition exemptions for lessees – leases of 'low-value' assets (e.g., personal computers) and short-term leases (i.e., leases with a lease term of 12 months or less). At the commencement date of a lease, a lessee will recognise a liability to make lease payments (i.e., the lease liability) and an asset representing the right to use the underlying asset during the lease term (i.e., the right-of-use asset). Lessees will be required to separately recognise the interest expense on the lease liability and the depreciation expense on the right-of-use asset.

Lessees will be also required to remeasure the lease liability upon the occurrence of certain events (e.g., a change in the lease term, a change in future lease payments resulting from a change in an index or rate used to determine those payments). The lessee will generally recognise the amount of the remeasurement of the lease liability as an adjustment to the right-of-use asset.

Lessor accounting under IFRS 16 is substantially unchanged from today's accounting under IAS 17. Lessors will continue to classify all leases using the same classification principle as in IAS 17 and distinguish between two types of leases: operating and finance leases.

IFRS 16, which is effective for annual periods beginning on or after 1 January 2019, requires lessees and lessors to make more extensive disclosures than under IAS 17.

2.3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Transition to IFRS 16

The Group has transitioned to IFRS 16 in accordance with the modified retrospective approach, therefore the prioryear figures have not been adjusted.

Statement of financial position: IFRS 16 requires lessees to adopt a uniform approach to the presentation of leases. In future, assets must be recognized for the right of use received and liabilities must be recognized for the payment obligations entered into for all leases.

The Group has made use of the relief options provided for leases of low-value assets and short-term leases. In contrast, the accounting requirements for lessors remain largely unchanged, particularly with regard to the continued requirement to classify leases according to IAS 17.

For leases that have been classified to date as operating leases in accordance with IAS 17, the lease liability will be recognized at the present value of the remaining lease payments, discounted using lessee's incremental borrowing rate at the time the standard is first applied. The right of use asset will generally be measured at the amount of the lease liability plus initial direct costs. Advance payments and liabilities from the previous financial year will also be accounted for. The preliminary results of the analysis indicate a probable significant increase in lease liabilities and total assets. The Group's equity ratio will decline and the Net debt will rise accordingly due to the material increase in lease liabilities.

The financial impact of the adoption of IRFS 16 can be observed in above financial statements and the below notes to this statements.

Statement of comprehensive income: In contrast to the presentation to date of operating lease expenses, in future depreciation charges on right of use assets and the interest expense from the unwinding of the discount on the lease liabilities will be recognized. IFRS 16 also provides new guidance on the treatment of sale and leaseback transactions. The seller/lessee recognizes a right of use asset in the amount of the proportional original carrying amount that relates to the right of use retained. Accordingly, only the proportional amount of gain or loss from the sale must be recognized.

These changes will improve the profit from operating activities (EBIT).

Cash flow statement: The change in presentation of operating lease expenses will result in a corresponding improvement in cash flows from operating activities and a decline in cash flows from financing activities.

In order to ensure the proper application of IFRS 16 the Group performs an on-going analysis of its operational lease's contracts. To assess whether a contract is or contains a lease, the Group analyses if:

The contract relates to an identified asset, which may be physically distinct or represent substantially all the capacity of a physically distinct asset;
The Group has the right to obtain substantially all the economic benefits from the use of the asset throughout the contractual period;
The Group has the right to direct the use of the asset

The remaining lease payments of the contracts, which were considered to be in the scope of IFRS 16, were discounted using the incremental borrowing rate which is the rate of interest that a lessee would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment.

Discount rates estimated considering lessee's incremental borrowing rate for each type of lease contracts reflects the specific risk of the lessee, country of operation and each sector for which funding would be needed.

The Group performs an on-going analysis to estimate the present value of the rent expenses which will represent the estimated additional impact on debt to be recognized in the Consolidated financial position and the carrying amount of the Right of usage asset; to estimate the depreciation expense for the additional assets recognized in the Consolidated financial position and the estimated interest expense of the lease liability, based on maturity profiles.

2.3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Standards issued but not yet effective and not early adopted

Other standards which were issued but not yet effect and not early adopted have no impact on the Group's financial statements:

Amendment in IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
IFRS 9: Prepayment features with negative compensation (Amendment)
IAS 28: Long-term Interests in Associates and Joint Ventures (Amendments)
IFRIC INTERPETATION 23: Uncertainty over Income Tax Treatments
IAS 19: Plan Amendment, Curtailment or Settlement (Amendments)
Conceptual Framework in IFRS standards
the Annual Improvements to IFRSs 2015 2017 Cycle issued by IASB.

3. SEGMENT REPORTING

Three months ended 30 June 2019	Romania	Hungary	Spain	Other	Eliminations	Reconciling item	Group

Segment revenue	186,717	55,400	46,430	5,510	-	-	294,057
Inter-segment revenues	823	-	208	147	(1,178)	-	-
Segment operating expenses	(103,933)	(39,300)	(36,727)	(6,611)	1,178	-	(185,393)
Adjusted EBITDA	83,607	16,100	9,911	(954)	-	-	108,664
Depreciation, amortization and impairment of tangible and intangible assets						(70,348)	(70,348)
Other income (Note 9)	-	-	-	-	-	-	-
Other expenses (Note 10)	(319)	-	-	-	-	-	(319)
Operating profit							37,997
Additions to tangible non-current assets	38,356	7,587	4,842	15	-	-	50,800
Additions to intangible non-current assets	17,894	379	4,936	708	-	-	23,917
Carrying amount of:
Property, plant and equipment	831,628	312,435	13,571	227	-	-	1,157,860
Non-current intangible assets	289,686	149,339	24,125	2,347	-	-	465,497
Investments in associates	969	-	-	38,436	-	-	39,405

The types of products and services from which each segment derives its revenues are disclosed in Note 9.

DIGI Communications N.V.

Notes to the Condensed Consolidated Interim Financial Report (unaudited)

for the period ended 30 June 2019

(all amounts are in thousand Eur, unless specified otherwise)

3. SEGMENT REPORTING (continued)

Three months ended 30 June 2018	Romania	Hungary	Spain	Other	Eliminations	Reconciling item	Group

Segment revenue	174,514	43,069	30,181	5,892	-	-	253,656
Inter-segment revenues	882	-	221	164	(1,267)	-	-
Segment operating expenses	(106,000)	(35,815)	(23,543)	(8,060)	1,267	-	(172,151)
Adjusted EBITDA	69,396	7,254	6,859	(2,004)	-	-	81,505
Depreciation, amortization and impairment of tangible and intangible assets						(54,804)	(54,804)
Other income (Note 9)	2,991	-	-	-	-	-	2,991
Other expenses (Note 10)	(3,327)	(2,519)	-	-	-	-	(5,846)
Operating profit							23,846
Additions to tangible non-current assets	39,550	140,879	1,816	20	-	-	182,266
Additions to intangible non-current assets	5,210	29,734	2,103	496	-	-	37,543
Carrying amount of:
Property, plant and equipment	783,635	270,696	5,781	266	-	-	1,060,378
Non-current intangible assets	168,112	61,879	7,382	2,439	-	-	239,812
Investments in associates	784	-	-	39,707	-	-	40,491

The types of products and services from which each segment derives its revenues are disclosed in Note 9

3. SEGMENT REPORTING (continued)

Six months ended 30 June 2019	Romania	Hungary	Spain	Other	Eliminations	Reconciling item	Group

Segment revenue	367,189	110,442	86,924	10,681	-	-	575,236
Inter-segment revenues	1,567	-	402	292	(2,261)	-	-
Segment operating expenses	(212,783)	(84,726)	(68,912)	(11,688)	2,261	-	(375,848)
Adjusted EBITDA	155,973	25,716	18,414	(715)	-	-	199,388
Depreciation, amortization and impairment of tangible and intangible assets	-	-	-	-	-	(143,660)	(143,660)
Other income (Note 18)	-	-	-	-	-	-	-
Other expenses (Note 18)	(2,507)	-	-	-	-	-	(2,507)
Operating profit							53,221
Additions to tangible non-current assets	75,726	32,278	10,236	35	-	-	118,275
Additions to intangible non-current assets	30,539	1,424	8,639	1,090	-	-	41,692
Carrying amount of:
Property, plant and equipment	831,628	312,435	13,571	227	-	-	1,157,860
Non-current intangible assets	289,686	149,339	24,125	2,347	-	-	465,497
Investments in associates	969	-	-	38,436	-	-	39,405

The types of products and services from which each segment derives its revenues are disclosed in Note 9

3. SEGMENT REPORTING (continued)

Six months ended 30 June 2018	Romania	Hungary	Spain	Other	Eliminations	Reconciling item	Group

Segment revenue	337,613	80,369	57,072	11,394	-	-	486,448
Inter-segment revenues	1,752	-	403	305	(2,460)	-	-
Segment operating expenses	(205,739)	(65,185)	(44,248)	(14,740)	2,460	-	(327,452)
Adjusted EBITDA	133,626	15,184	13,227	(3,041)	-	-	158,996
Depreciation, amortization and impairment of tangible and intangible assets						(101,949)	(101,949)
Other income (Note 18)	7,248	-	-	-	-	-	7,248
Other expenses (Note 18)	(6,347)	(2,519)	-	-	-	-	(8,866)
Operating profit							55,429
Additions to tangible non-current assets	78,149	152,160	2,801	33	-	-	233,143
Additions to intangible non-current assets	13,755	29,946	4,000	990	-	-	48,691
Carrying amount of:
Property, plant and equipment	783,635	270,696	5,781	266	-	-	1,060,378
Non-current intangible assets	168,112	61,879	7,382	2,439	-	-	239,812
Investments in associates	784	-	-	39,707	-	-	40,491

The types of products and services from which each segment derives its revenues are disclosed in Note 9.

4. PROPERTY, PLANT AND EQUIPMENT (PPE)

Acquisitions and disposals

During the six month period ended 30 June 2019, the Group acquired property, plant and equipment with a cost of EUR 118,275, including Right of Use Assets from financial leasing contracts but excluding Right of Use Assets from operational leasing under IFRS 16. (six months ended 30 June 2018: EUR 233,143, including additions through business combinations of EUR 132,837). The acquisitions related mainly to networks EUR 61,502 (six months ended 30 June 2018: EUR 136,787, including additions through business combinations of EUR 95,448), customer premises equipment of EUR 17,468 (six months ended 30 June 2018: EUR 27,474, including additions through business combinations of EUR 10,845), equipment and devices of EUR 30,811 (six months ended 30 June 2018: EUR 42,730, including additions through business combinations of EUR 14,744) and buildings and structures of EUR 3,606 (six months ended 30 June 2018: EUR 17,266, including additions through business combinations of EUR 10,506).

5. NON-CURRENT INTANGIBLE ASSETS AND PROGRAMME ASSETS

Acquisitions

Non-current intangible assets

During the six-month period ended 30 June 2019, the Group acquired non-current intangible assets with a cost of EUR 41,692 (30 June 2018: EUR 48,691) as follows:

Software and licences in amount of EUR 10,187 (30 June 2018: EUR 8,490);
Customer relationships by acquiring control in other companies in amount of EUR 14,539 (30 June 2018: EUR 11,973);
Costs to obtain contracts with customers (Subscriber Acquisition Costs "SAC") in amount of EUR 16,966 (30 June 2018: EUR 14,926); SAC represents third party costs for acquiring and connecting customers of the Group;
Goodwill didn't increase through new additions in the first six months of 2019 (30 June 2018: EUR 7,613).

Programme assets

During the six month period ended 30 June 2019, additions of programme assets in the amount of 7,024 EUR (30 June 2018: EUR 12,127) represent broadcasting rights for sports competitions for 2019/2020 season and related advance payments for future seasons, and also rights for movies and documentaries.

Goodwill

(i) Reconciliation of carrying amount
Cost
Balance at 1 January 2018	76,089
Additions	7,613
Effect of movement in exchange rates	(1,207)
Balance at 30 June 2018	82,495

Balance at 1 January 2019	82,903
Additions	-
Effect of movement in exchange rates	(981)
Balance at 30 June 2019	81,922

(ii) Impairment testing of goodwill

Goodwill is not amortized but is tested for impairment annually (as at 31 December) and when circumstances indicate the carrying values may be impaired. There were no impairment indicators for the cash generating units to which goodwill was allocated as of 30 June 2019.

6. EQUITY

On January 14, 2019, the Board of Directors converted 1.2 million Class A shares of the Company that were held as treasury shares by the Company into an equal number of Class B shares. As a result of this conversion, the issued share capital of the Company currently amounts to €6,810,042.52 divided into:

64,556,028 Class A Shares with a nominal value of €0.10 each in the share capital of the Company; and
35,443,972 Class B Shares with a nominal value of €0.01 each in the share capital of the Company

Given the difference in the nominal value between a class A share (EUR 0.1) and a class B share (EUR 0.01) of the Company, in accordance with article 5 (4) from the Company's articles of association, the conversion resulted in a decrease by EUR 0.09 in nominal value per class A share subject of the conversion (in total—EUR 108.000). This amount was added to the general equity reserves of the Company.

The class B shares resulting from the Conversion will be used by the Company (in addition to the existing treasury class B shares and to the class B shares repurchased through the ongoing buy-back program) for the purpose of the several ongoing Company's subsidiaries employees and managers' stock option plans having a vesting period in 2019.

On 15 May 2019 Mr. Serghei Bulgac, Chief Executive Officer and Executive Director of the Company and Mr. Valentin Popoviciu, Executive Director of the Company, have exercised their stock options, which have vested in accordance with the provisions of the Company's stock option plan granted in 2018. In accordance with this stock option plan, Mr. Serghei Bulgac was granted 170,000 shares, while Mr. Valentin Popoviciu was granted 90,000 shares.

On 25 May 2019 Mr. Mihai Dinei, Board Member of RCS & RDS S.A. has exercised his stock option, which has vested in accordance with the provision of the company's stock option plan granted in 2018. In accordance with this stock option plan, Mr. Mihai Dinei was granted 100,000 shares.

As at 30 June 2019, the Company had 5.0 million treasury shares.

The GSM from 30 April 2019 approved the distribution of a gross dividend of 0.50 RON per share for 2018.

7. INTEREST-BEARING LOANS AND BORROWINGS

Included in Long term interest-bearing loans and borrowings are bonds EUR 546,617 (December 2018: EUR 349,490) and bank loans EUR 260,848 (December 2018: EUR 363,125).

Included in Short term interest-bearing loans and borrowing are bank loans EUR 46,425 (December 2018: EUR 44,240), short portion of long term interest-bearing loans EUR 36,097 (December 2018: EUR 112,580) and interest payable amounting to EUR 8,471 (December 2018: EUR 7,415).

Starting 1st of January The Company adopted IFRS 16 and presented all financial leasing liability together with the operational leasing liability under "Lease liabilities" in amount of EUR 206,648 as at 30 June 2019. As at 31 December 2018, financial leasing liability was presented under "Interest-bearing loans and borrowings" and was included in EUR 884,818. The movements in total Interest-bearing loans and borrowings is presented in the table below.

7. INTEREST-BEARING LOANS AND BORROWINGS (CONTINUED)

	Carrying amount
Balance as of 1 January 2019	884,818
Effect of IFRS 16 adoption
Reclassification of financial leasing into Lease Liability	(7,967)
New drawings
Proceeds from bank borrowings	216,450
Interest expense for the period	26,913
Repayment
Repayment of borrowings	(186,422)
Current year interest paid	(24,546)
Additional financing costs	(5,561)
Effect of movements in exchange rates	(5,229)
Balance as of 30 June 2019	898,458

Included in Other long term liabilities and Trade payables and other payables we have supplier balances that are part of several factoring arrangements amounting to EUR 92,633.

8. RELATED PARTY DISCLOSURES

		30 June 2019	31 December 2018
Receivables from Related Parties
Ager Imobiliare S.R.L.	(i)	752	743
RCS-Management		1	1
Other		10	9
Total		763	753
		30 June 2019	31 December 2018
Payables to Related Parties
RCS-Management	(ii)	11,193	5,756
Mr. Zoltan Teszari		245	8
Other		1,350	720
Total		12,788	6,484

(i) Entities affiliated to a shareholder of the parent

(ii) Shareholder of DIGI

On 12 May 2017, RCS&RDS entered into a short term loan with RCS Management, for a principal amount of EUR 5,000. The loan bears a 5.5% per annum interest rate, the repayment date was extended to May 2020. As at 30 June 2019 the outstanding amount is EUR 465.

In May 2019, RCS & RDS declared dividends in amount of 50,000 RON, equivalent of 10.5 million EUR from 2018 profit.

8. RELATED PARTY DISCLOSURES (CONTINUED)

		30 June 2019
Transactions of the Company with group
entities
Revenues
RCS&RDS SA	(i)	3,505
RCS&RDS SA	(ii)	14,208
RCS&RDS SA	(iii)	9,833
RCS&RDS SA	(iv)	2,162
RCS&RDS SA	(v)	13
Total		29,721
(i) Cost recovery
(ii) Interest
(iii) Dividend
(iv) Costs reinvoiced Bond
(v) Services
		30 June 2019
Transactions of the Company with group
entities
Expenses
RCS&RDS SA	(i)	58
RCS&RDS SA	(ii)	76
Total		134

(i) Costs reinvoiced

(ii) Costs reinvoiced Bond

Compensation of key management personnel of the Group
	Three months	Three months	Six months	Six months
	ended	ended	ended	ended
	30 June 2019	30 June 2018	30 June 2018	30 June 2017
Short term employee benefits –
salaries	972	1,168	1,839	1,992

In May 2017 and May 2018 share option plans were approved by the General Shareholders' Meeting for members of the Company's Board of Directors.

For details, please see Note 14.

9. REVENUES

Allocation of revenues through business lines and geographical areas is as follows:

a)	Three months ended 30 June 2019 Revenues from contracts with costumers	Three months ended 30 June 2018	Six months ended 30 June 2019	Six months ended 30 June 2018
Cable TV
Romania	54,545	47,220	105,577	93,731
Hungary	16,561	13,880	33,631	26,077
Internet and data
Romania	48,430	44,833	95,086	88,964
Hungary	19,912	12,509	38,871	22,538
Spain	1,909	-	2,833	-
Telephony
Romania	54,544	49,907	106,386	99,153
Hungary	5,299	3,402	10,851	5,302
Spain	44,395	30,165	83,896	57,037
Italy	5,503	5,866	10,668	11,344
DTH
Romania	7,868	8,276	15,471	16,727
Hungary	7,482	8,088	14,953	16,269
Other revenues
Romania	17,965	18,395	36,777	31,138
Hungary	6,147	5,204	12,137	10,184
Spain	124	17	194	35
Italy	5	25	13	50
a) Other revenues
Romania	3,368	5,869	7,892	7,899
Total revenues	294,057	253,656	575,236	486,448

Other revenues from contracts with costumers as at 30 June 2019 include mainly revenues from sale of handsets and other CPE, as well as advertising revenues.

The split of revenues based on timing of revenue recognition is presented below:

Timing of revenue recognition
	Three months ended	Three months ended 30 June 2018	Six months ended	Six months ended
	30 June 2019		30 June 2019	30 June 2018
Goods transferred at a point in	7,220	9,290	17,495	14,846
time
Services transferred over time	286,837	244,366	557,741	471,602
Total revenues	294,057	253,656	575,236	486,448

9. REVENUES (CONTINUED)

The transfer of goods to the customer at a point in time are presented in the first table above as "Other revenues". The rest of the services provided to customers and presented as revenues for each business line and geographical segment

10. OPERATING EXPENSES

	Three months ended 30 June 2019	Three months ended 30 June 2018	Six months ended 30 June 2019	Six months ended 30 June 2018

Depreciation of property, plant and equipment	34,633	34,148	69,748	59,749
Amortization of programme assets	9,898	9,237	21,234	20,143
Amortization of non-current intangible assets	11,348	11,053	26,810	21,061
Amortisation of right of use assets	14,116	-	24,463	-
Impairment of property, plant and equipment	335	366	1,365	991
Impairment of non-current intangible assets	18	-	40	5
Salaries and related taxes	51,378	44,592	101,033	85,735
Contribution to pension related fund	1,742	1,186	3,195	2,241
Programming expenses	26,323	21,965	52,854	42,856
Telephony expenses	51,498	40,669	99,545	81,660
Cost of goods sold	6,452	12,466	15,996	13,790
Rentals	7,194	16,147	15,937	31,204
Invoicing and collection expenses	5,477	4,741	10,851	9,089
Taxes and penalties	3,559	3,901	14,110	6,301
Utilities	6,426	4,619	12,418	9,005
Copyrights	3,032	2,329	5,841	4,716
Internet connection and related services	2,837	992	4,907	1,837
Impairment of receivables, net of reversals	2,374	2,182	4,094	4,948
Taxes to authorities	2,392	2,382	4,798	4,777
Other materials and subcontractors	2,410	2,903	5,160	5,512
Other services	6,482	9,094	13,786	14,618
Other expenses	5,817	1,983	11,323	9,163
Total operating expenses	255,741	226,955	519,508	429,401

In 2019 share option plans expenses accrued in the period are included in the caption "Salaries and related taxes". For details, please see Note 14.

Miscellaneous operating expenses mainly include expenses related to advertisings costs, expenses related to own TV channels, settlements of contracts, network maintenance expenses and various other fees and commissions to third parties.

11. NET FINANCE COSTS

	Three months Three months		Six months	Six months
	ended	ended	ended	ended
	30 June 2019	30 June 2018	30 June 2019	30 June 2018
Financial revenues
Interest from banks	72	42	3,327	58
Other financial revenues	1	-	3,507	-
Foreign exchange differences (net)	2,669	-	-	-
	2,742	42	6,834	58
Financial expenses
Interest expense and	(13,018)	(11,541)	(29,040)	(21,428)
amortization of borrowing cost
Interest expense for lease	(2,710)	-	(4,598)	-
liability IFRS 16
Net gain/(loss) on derivative	6	(245)	(2)	(625)
financial instruments
Foreign exchange differences	-	(7,766)	(8,149)	(5,546)
(net)
Other financial expenses	(2,753)	(894)	(6,541)	(3,872)
	(18,475)	(20,445)	(48,330)	(31,470)
Net Financial Cost	(15,733)	(20,403)	(41,496)	(31,412)

12. ACQUISITION OF SUBSIDIARY

On 21 July 2017, DIGI Távközlési és Szolgáltató Kft. ("Digi HU") our subsidiary in Hungary, acting as purchaser, has signed a share-purchase agreement ("SPA") with Ilford Holding Kft. and Invitel Technocom Távközlési Kft., acting as sellers for the acquisition of shares representing in total 99.998395% of the share capital and voting rights of Invitel Távközlési Zrt ("Invitel").

In May 2018 the Regulatory Authority from Hungary approved, with certain conditions, the proposed transaction. The transaction was closed on 30 May 2018 for a total consideration of approximately 135.4 million EUR.

As at 30 June 2019, for comparative purpose, we have restated Interim Condensed Consolidated Financial Statements as at 30 June 2018 to account for Invitel consolidation from 30 May 2018 to 30 June 2018. Please see below Invitel impact on consolidated figures as at 30 June 2018:

12. ACQUISITION OF SUBSIDIARY (CONTINUED)

Invitel IFRS Statement of Financial Position as at 30 June 2018

	30 June 2018
ASSETS
Non-current assets
Property, plant and equipment	122,056
Intangible assets	5,506
Long term receivables	41
Total non-current assets	127,603

Current assets
Inventories	119
Trade and other receivables	5,730
Other assets	411
Cash and short term deposits	8,988
Amounts receivable from intragroup
companies	2
Total current assets	15,250
Total assets	142,853
EQUITY AND LIABILITIES
Equity attributable to equity holders
of the parent
Share capital	37,639
Reserves	(7,108)
Retained earnings	(11,980)
Total equity	18,551
Non-current liabilities
Interest-bearing loans and borrowings	548
Intercompany Loan Payables - long term	92,091
Total non-current liabilities	92,639

Current liabilities
Trade payables and other payables	29,578
Interest-bearing loans and borrowings	488
Contract liability	1,352
Intercompany Payables - short term	245
Total current liabilities	31,663
Total liabilities	124,302

Total equity and liabilities	142,853

12. ACQUISITION OF SUBSIDIARY (CONTINUED)

Invitel IFRS Profit and Loss Account for one month ended 30 June 2018

	One month period ended 30 June 2018

Revenues	6,568
Operating expenses	(12,851)
Intercompany Services expenses	(303)
Operating Profit	(6,586)

Finance income	19
Finance expenses	(59)
Net finance costs	(40)
Profit before taxation	(6,626)
Income tax	(11)
Net profit for the period	(6,637)

GINOP non-refundable funds

Invitel has received GINOP non-refundable funds for development of the project Next Generation Access and access networks under Milestone 1 for network development projects. The ultimate goal of the project is to boost the availability of digital services to households, and not only, but extending next generation internet access to settlements where the broadband internet is currently not available and to enhance system capacity. The local name of the funding programme within which the grants are available is Super Fast Internet Programme ("SZIP").

In the six month period ended 30 June 2019 there were no new non-refundable funds received by Invitel.

13. FINANCIAL RISK MANAGEMENT

The Group has exposure to the following risks from the use of financial instruments:

credit risk
liquidity risk
market risk (including currency risk, interest rate risk and price risk).

This note presents information about the Group's exposure to each of the above risks, the Group's objectives, policies and processes for measuring and managing risk, and the Group's management of capital. Further quantitative disclosures are included throughout these consolidated financial statements.

The Board of Directors has overall responsibility for the establishment and oversight of the Group's risk management framework.

The Group's risk management policies are established to identify and analyze the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group's activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

13. FINANCIAL RISK MANAGEMENT (continued)

(a) Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group's trade receivables from customers. Management mitigates credit risk mainly by monitoring the subscribers base and identifying bad debt cases, which are suspended, in general, in an average of 15 days period after the invoice due date.

The carrying amount of the non-derivative financial assets, net of the recorded allowances for expected credit losses, represents the maximum amount exposed to credit risk. The Group evaluates the concentration of risk with respect to trade receivables and contract assets as low. Although collection of receivables could be influenced by macroeconomic factors, management believes that there is no significant risk of loss to the Group beyond the allowances already recorded.

The credit exposure for derivatives is limited, as there will be no incoming cash-flow arising from the embedded derivatives

Cash and cash equivalents are placed in financial institutions, which are considered at time of deposit to have minimal risk of default.

The credit risk on cash and cash equivalents is very small, since the cash and cash equivalents are held at reputable banks in different countries. The most significant part of cash and cash equivalents balance is generally kept at the main subsidiary (RCS RDS) level with internationally reputable banks, having at least A-2 rating in a country with a "BBB-" rating.

(b) Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation.

The Group's objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, bank loans, vendor financing and reverse factoring agreements. Management monitors on a monthly basis the forecast of cash outflows and inflows in order to determine its funding needs.

At 30 June 2019, the Group had net current liabilities of EUR 396,720 (31 December 2018: EUR 459,872). As a result of the volume and nature of the telecommunication business current liabilities exceed current assets. A large part of the current liabilities is generated by investment activities. Management considers that the Group will generate sufficient funds to cover the current liabilities from future revenues.

The Group's policy on liquidity is to maintain sufficient liquid resources to meet its obligations as they fall due and to keep the Group's leverage optimized. The Group's objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, bank loans, finance leases and working capital, whilst considering future cash flows from operations. Management believes that there is no significant risk that the Group will encounter liquidity problems in the foreseeable future.

(c) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, market electricity prices and equity prices will affect the Group's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

13. FINANCIAL RISK MANAGEMENT (continued)

Exposure to currency risk

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures (other than the functional currency of each legal entity), primarily with respect to the USD and EUR. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in currencies other than the functional currencies of the Company and each of its subsidiaries.

Management has set up a policy to manage the foreign exchange risk against the functional currency. To manage their foreign exchange risk arising from future commercial transactions and recognized assets and liabilities, the Group used forward/option contracts, transacted with local banks.

Foreign exchange risk arises when future commercial transactions or recognized assets or liabilities are denominated in a currency that is not the entity's functional currency.

The Group imports services and equipment and attracts substantial amount of foreign currency denominated borrowings.

The Board of Directors actively manages the exposure to EUR and USD currency only for borrowings.

Exposure to electricity price risk

The electricity production and commercial activity are not core activities for the Group. Through its electricity production and commercial trading activities, the Group is exposed to electricity price risk, due to the volatility of prices on the electricity market and the potential mismatches between purchase prices and selling prices. In particular, due to the fixed prices we charge customers related to our electricity supply activities, increases in the cost of the electricity we acquire from third parties could adversely affect our financial condition.

(d) Fair values

The Group measures at fair value the following: financial assets at fair value through other comprehensive income, embedded derivatives, interest rate swaps, cross currency swaps.

14. SHARE-BASED PAYMENT

On 14 May 2017 the General Shareholders' Meeting adopted the terms and conditions of the stock option plan for Class B Shares, applicable to the executive Board members of the Company. A total number of 280,000 class B shares were granted as part of the stock option plan, with vesting date in one year's time. On 15 May 2018, this stock option plan vested and Mr. Serghei Bulgac, Chief Executive Officer and Executive Director of the Company and Mr. Valentin Popoviciu, Executive Director of the Company, have exercised their stock options. In accordance with this stock option plan, Mr. Serghei Bulgac was granted 220,000 shares, while Mr. Valentin Popoviciu was granted 60,000 shares.

In December 2017, 1.5 million shares were granted as options to eligible employees under the share based payment plan. A total number of 2,746 employees are included in the share based payment plan, which was a one-time event after the IPO.

On 2 May 2018, the General Shareholder's Meeting has approved the grant of stock options for class B shares applicable to the executive and non-executive Board members in 2018.

In May 2018, Mr. Serghei Bulgac (Chief Executive Officer and Executive Director of the Company), Mr. Valentin Popoviciu (Executive Director of the Company), Mr. Marius Varzaru (Non-executive Director) and Mr. Bogdan Ciobotaru (Non-executive Director) have been granted by the Company conditional stock options pursuant to the decision of the Company's general meeting of shareholders dated 2 May 2018. The number of options of class B shares granted as part of this stock option plan (applicable for the years 2018 and 2019) amounts to a total of 686,090 stock options. The further vesting of all option shares granted will be conditional upon several performance criteria and the passage of a minimum duration of 1 year.

The Company also granted on 24 May 2018 conditional stock options to a limited number of Romanian directors and employees. The number of options of class B shares granted to such directors and employees amounts to a total of 250,000 stock options. The further vesting of all option shares granted will be conditional upon several performance criteria and the passage of a minimum duration of 1 year.

The Company approved in June 2018 the implementation of a stock option plan to the benefit of the officers and employees of Digi Spain S.L.U., the Company's subsidiary in Spain. The maximum number of options of class B shares allocated to this plan amounts to 35,000. The grant of the stock options under this plan will be determined based on performance criteria and the vesting will be conditional upon the passage of a minimum duration of 1 year.

For the six month period ended 30 June 2019, the related share option expense was of EUR 1,714 (six month period ended 30 June 2018: EUR 7,690).

15. DERIVATIVE FINANCIAL INSTRUMENTS

As at 30 June 2019 the Group had derivative financial assets in amount of EUR 30,674 (31 December 2018: EUR 33,287), which included:

• Embedded derivatives of EUR 30,647 (31 December 2018: EUR 31,115) related to the bond (the Bonds include several call options as well as one put option, for which the combined fair value of these embedded options was assessed through the Option Adjusted Spread model and recognized a separate embedded derivative asset).

• From January 2019 the electricity contracts are no longer considered for fair value assessment (31 December 2018: 2,052).

15. DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED)

As at 30 June 2019 the Group had derivative financial liabilities in amount of EUR nill (31 December 2018: EUR 1,106), which included:

• From January 2019 the electricity contracts are no longer considered for fair value assessment (31 December 2018: 1,106).

• On May 22, 2015 and in January 2016 RCS & RDS concluded interest rate swaps for the entire term loan facility and Accordion term loan facility under the 2015 SFA, through which RCS&RDS hedged against the volatility of cash flows on its floating rate borrowings due to modification of market interest rates (i.e.: ROBOR). Under the interest rate swaps RCS&RDS pays fixed and receives variable cash flows on the same dates on which is settles the interest on its hedged borrowings. Hedged cash flows occur periodically, on the settlement of the interest on hedged loans, and impact profit or loss throughout the life of the loan, through accrual. Given that critical terms of the hedging instrument match the critical terms of the hedged cash flows, there is no significant ineffectiveness. The interest rate swaps remain valid until the maturity of the agreement in 2020.

Fair value hierarchy

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs)

	Level 3	Total
30 June 2019
Available for sale financial assets	38,436	38,436
Interest rate swaps	-	-
Embedded derivatives	30,674	30,674
Electricity trading assets (term contracts)	-
Electricity trading liabilities (term contracts)	-
Total	69,110	69,110
31 December 2018
Available for sale financial assets	32,058	32,058
Interest rate swaps	120	120
Embedded derivatives	31,115	31,115
Electricity trading assets (term contracts)	2,052	2,052
Electricity trading liabilities (term contracts)	(1,106)	(1,106)
Total	64,239	64,239

16. GENERAL COMMITMENTS AND CONTINGENCIES

(a) Contractual commitments

Commitments are presented on a discounted basis, using an interest rate of 3M LIBOR + 5.59% p.a., 3M EURIBOR + 5.59% p.a. or 3M ROBOR + 5.59% p.a.

The Group leases under operating leases several main types of assets:

pillars for network support in Romania and Hungary in several rural areas for the Romanian and Hungarian fibre optics main ring and pillars/land for mobile network in Romania and Hungary;
pillars for network support in Romania in several urban areas for "fibre to the block networks";
fibre optic line capacities in Hungary;
commercial spaces for cash collection points in Romania and Hungary;
office facilities in Romania, Hungary, Spain, Italy.

As at 30 June 2019, contractual commitments for capital expenditure amounted to approximately EUR 94,799 (31 December 2018: EUR 82,325) and contractual operating commitments amounted to approximately EUR 101,265 (31 December 2018: EUR 199,022), including operating leases.

(b) Letters of guarantee

As of 30 June 2019, there were bank letters of guarantee and letters of credit issued in amount of 16,378 EUR mostly in favour of content and satellite suppliers and for participation to tenders (31 December 2018: EUR 19,639).

We have cash collateral agreements for issuance of letters of counter guarantees. As at 30 June 2019 we had letters of guarantee issued in amount of EUR 719 (31 December 2018: EUR 719). These agreements are secured with moveable mortgage over cash collateral accounts.

(c) Legal proceedings

During the year, the Group was involved in a number of court proceedings (both as a plaintiff and a defendant) arising in the ordinary course of business. In the opinion of the management, there are no current legal proceedings or other claims outstanding which could have a material effect on the result of operations or financial position of the Group and which have not been accrued or disclosed in these consolidated financial statements. Specifically, for the litigations described below the Group recognized provisions only for some case, as for the others management assessed that the outcome of these litigations is not more likely than not to result in significant cash outflows for the Group.

Intact Media Group Litigations, which ceased under a Settlement Agreement

Since March 2011, we have been engaged in a number of legal proceedings against Intact Media Group, which is a leading media group in Romania. In particular, Intact Media Group (largely, through Antena Group) initiated a series of legal proceedings against us, inter alia, alleging violations of Romanian "must carry" regulations, claiming damages because of our refusal to retransmit certain of their channels, claiming copyright infringement and alleging our abuse of dominant market position. We also initiated proceedings against Intact Media Group claiming compensation of damages to reputation and violations of certain contractual arrangements.

On June 15, 2018, we settled all underlying disputes with Intact Media Group and both parties waived all their remaining claims and agreed to formally terminate all pending legal proceedings. As at the date of this report, Romanian courts have acknowledged the settlement and formally terminated all such proceedings, except for the litigation where Antena Group is challenging the RCC's dismissal of its claim alleging our abuse of dominant position in relation to their GSP TV channel (Antena Group's claims were dismissed by the court of first instance, and the final hearing before the higher appeal court is currently scheduled for September 26, 2019), in which formal termination is pending, based on the same settlement.

Pecuniary claim filed by the National Cinematography Centre

On 4 November 2016, the National Cinematography Centre filed before the Bucharest Tribunal a claim for payment with respect to a value of EUR 1,200, including principal and accessories as royalty tax due by law to this claimant. In March 2019, the Bucharest Court of Appeal admitted the National Cinematography Centre's claim in part by granting to the claimant RON 3,900 (by maintaining the first court solution). Although already enforceable, this decision is not final and we filed an appeal in this case.

For great part of the amounts claimed by the National Cinematography Centre we continue to consider the claim as ungrounded and abusive, and we will continue to resist to these claims, as the amounts that we deem legitimate to be paid by RCS&RDS are significantly smaller.

Litigation with Electrica Distribuţie Transilvania Nord in relation to a concession agreement between RCS&RDS and the Oradea municipality

In 2015, Electrica Distribuţie Transilvania Nord S.A. (the incumbent electricity distributor from the North-West of Romania) challenged in a court the concession agreement we have concluded with the local municipality from Oradea regarding the use of an area of land for the development of an underground cable trough, arguing that the tender whereby we obtained the concession agreement was irregularly carried out. Furthermore, Electrica Distribuţie Transilvania Nord S.A. claims that the cable trough is intended to include electricity distribution wires that would breach its alleged exclusive right to distribute electricity in the respective area.

Based on our request, the trial was suspended pending final settlement of a separate lawsuit in which two Group companies are challenging the validity of the alleged exclusivity rights of incumbent electricity distributors (this claim was denied by the court of first instance). Should the final court decision be unfavourable to us, it may result in a partial loss of our investment in the underground cable trough.

Motion filed by certain US individuals against the Company, RCS&RDS, RCS Management S.A., DIGI Távközlési és Szolgáltató Kft, and its subsidiary, i-TV Digitális Távközlési Zrt.

On 2 May 2017, certain individuals (William Hawkins, Eric Keller, Kristof Gabor, Justin Panchley, and Thomas Zato) (collectively, the "Plaintiffs") filed in the United States District Court for the Eastern District of Virginia – Alexandria Division (the "US Court") a motion to enforce a default judgment (the "Motion") that was issued in favour of the Plaintiffs by the US Court in the Civil Action No. 1:05-cv-1256 (LMB/TRJ) in February 2007 (the "Default Judgment") against Laszlo Borsy, Mediaware Corp., MediaTechnik Kft., Peterfia Kft, and DMCC Kommunikacios Rt. (the predecessor to i-TV Digitális Távközlési Zrt.) (the "Defendants") jointly and severally. Additionally, the Motion sought to extend the enforcement of the Default Judgment against the following entities that were not parties to the original proceedings and not named in the Default Judgment: i-TV Digitális Távközlési Zrt., DIGI Távközlési és Szolgáltató Kft., RCS&RDS, RCS Management S.A., and the Company.

The Default Judgment, of which enforcement is sought before the US Court, awarded the Plaintiffs approximately USD 1,800 in damages resulting from alleged unpaid debts that appear to have been caused by Laszlo Borsy and several related entities. It also ordered that the ownership interest of Defendants Mediaware Corp., MediaTechnik Kft., Peterfia Kft, and DMCC Kommunikacios Rt. be distributed to the Plaintiffs in total percentage of 56.14%. Finally, it prohibited Defendants Laszlo Borsy, Mediaware Corp., MediaTechnik Kft., Peterfia Kft, and DMCC Kommunikacios Rt. from disposing of or dissipating any assets of the initial defendant entities or engaging in any corporate transactions without the consent of the Plaintiffs.

The Motion alleges that i-TV Digitális Távközlési Zrt., DIGI Távközlési és Szolgáltató Kft. and the upstream separate companies RCS&RDS, the Company, and RCS Management S.A. violated the Default Judgment, to which these companies were not party, when, ten years ago, DIGI Távközlési és Szolgáltató Kft. entered the share capital of DMCC Kommunikacios Rt. (i-TV Digitális Távközlési Zrt.'s predecessor).

For more than ten years after the Default Judgment was issued in 2007, the Plaintiffs filed no actual claim against i-TV Digitális Távközlési Zrt., DIGI Távközlési és Szolgáltató Kft., RCS&RDS, RCS Management S.A. or the Company. During the same period, the Plaintiffs never sought to enforce the Default Judgment against i-TV Digitális Távközlési Zrt., DIGI Távközlési és Szolgáltató Kft., RCS&RDS, RCS Management S.A., or the Company in Hungary or another foreign jurisdiction. Nor did they seek to enforce the Default Judgment against any of the Defendants in their domestic countries.

We deem the Motion, which requests payment from the Defendants, i-TV Digitális Távközlési Zrt., DIGI Távközlési és Szolgáltató Kft., RCS&RDS, RCS Management S.A. and the Company, jointly and severally, of USD 1,800 , plus interest, as well as other compensation, damages, fees and expenses, as vexatious for numerous legal and factual reasons. Those reasons include, but are not limited to, the lack of any actual proof of fraud on behalf of either of i-TV Digitális Távközlési Zrt., DIGI Távközlési és Szolgáltató Kft., RCS&RDS, RCS Management S.A., or the Company, the Plaintiffs' passivity for more than ten years, the lack of jurisdiction of the US Court over i-TV Digitális Távközlési Zrt., DIGI Távközlési és Szolgáltató Kft., RCS&RDS, S.A., RCS Management S.A., or the Company, as well as the fact that the Motion, if granted, would go against mandatory legal provisions of any of the jurisdictions where i-TV Digitális Távközlési Zrt., DIGI Távközlési és Szolgáltató Kft., RCS&RDS, RCS Management S.A., or the Company operate.

On 8 February 2018, the US Court granted the Defendants' motion to vacate and dismissed the entire lawsuit for lack of subject matter jurisdiction. The US Court also vacated all prior orders entered in the case (the "US Court's Decision"). The Plaintiffs filed an appeal against the US Court's Decision with the United States Court of Appeals for the Fourth Circuit (the "Appellate Court"). The Defendants also filed a conditional cross-appeal on multiple grounds that need only be considered if the Appellate Court reverses the US Court's Decision. The Appellate Court has issued a scheduling order for the exchange of written arguments (phase completed), and the hearing took place at the end of January 2019. The Appellate Court is expected to issue its decision in the forthcoming months.

Should the Appellate Court grant the Plaintiffs' appeal in whole or in part and reject the Defendants' cross-appeal in whole or in part, the matter would return to the US Court for trial on the merits of the case.

We additionally believe any judgment issued by the US Court against i-TV Digitális Távközlési Zrt., DIGI Távközlési és Szolgáltató Kft., RCS&RDS, RCS Management S.A. or the Company would not be enforceable, as it would need to be first recognized in the relevant jurisdictions where these companies operate, subject to the foreign judgement's compliance with those jurisdictions' mandatory legal provisions.

Investigation by the Romanian National Anti-Corruption Agency brought to court

In 2009, RCS&RDS entered into a joint venture with Bodu S.R.L. (the "JV") with respect to an events hall in Bucharest. This venue enjoys a good location in the city and is relatively close to our headquarters. We believed at the time that the property would have been very helpful to the development of our media business and, potentially, other businesses and desired to acquire the venue from Bodu S.R.L. However, Bodu S.R.L. only agreed to a joint venture arrangement, making certain representations concerning future economic benefits of its joint development, which we accepted in good faith. At the time when RCS&RDS entered into the JV, Bodu S.R.L. was owned by Mr. Bogdan Dragomir, a son of Mr Dumitru Dragomir, who served as the President of the Romanian Professional Football League (the "PFL").

In 2013, certain individuals within Antena Group (with which we had a number of ongoing litigations at the time) blackmailed Mr. Ioan Bendei (who at the time was a member of the Board of Directors of RCS&RDS and is a director of Integrasoft S.R.L. (see below)) threatening to report him (and us) to the prosecuting authorities. They alleged that our investment into the JV represented a means to extend an unlawful bribe to Mr. Dumitru Dragomir in exchange for his alleged assistance with granting to us content rights to Romania's national football competitions administered by the PFL and to certain subsequent modifications to the payment terms of content rights awarded through an auction process in 2008. Mr. Ioan Bendei reported the blackmailers to the prosecutors, which resulted in the General Manager of Antena Group being convicted of blackmail and incarcerated. However, Antena Group's allegations against Mr. Ioan Bendei were also brought to the attention of the Romanian National Anti-Corruption Agency (the "DNA").

By 2015, the JV became virtually insolvent, as initial expectations on its prospects had failed to materialize. In 2015, in order to recover the EUR 3,100 investment it had made into the JV from 2009 to 2011 and to be able to manage the business of the events hall directly and efficiently, RCS&RDS entered into a settlement agreement with Bodu S.R.L. In 2016, in accordance with that settlement agreement, RCS&RDS acquired (at a discount to nominal value) Bodu S.R.L.'s outstanding bank debt (which was secured by its share of, and assets it contributed to, the JV). Thereafter, RCS&RDS set-off its acquired receivables against Bodu S.R.L. in exchange for the real estate and business of the events hall. Bodu S.R.L. was replaced as RCS&RDS's JV partner by Integrasoft S.R.L., one of our Romanian subsidiaries.

Following this acquisition, in addition to its investigation of Antena Group's bribery allegations in relation to our investment into the JV, the DNA opened an enquiry as to whether the transactions that followed (including the 2015 settlement and the 2016 acquisition) represented unlawful money-laundering activities.

On 7 June 2017, Mr. Bendei Ioan, member of the Board of directors of RCS&RDS, was indicted by the DNA in connection with the offences of bribery and accessory to money laundering. Mr. Bendei Ioan was also placed under judicial control. On 25 July 2017, RCS&RDS was indicted by the DNA in connection with the offences of bribery and money laundering, Integrasoft S.R.L. (one of RCS&RDS's subsidiaries in Romania) was indicted for the offence of accessory to money laundering, Mr. Mihai Dinei (member of the Board of directors of RCS&RDS), was indicted by the DNA in connection with the offences of accessory to bribery and accessory to money laundering. On 31 July 2017, Mr. Serghei Bulgac (Chief Executive Officer of RCS&RDS and General Manager and President of the Board of Directors of RCS&RDS), was indicted by the DNA in connection with the offence of money laundering.

The offences of bribery, of receiving bribes and the accessories to such offenses under investigation are alleged to have been committed through the 2009 joint-venture between RCS&RDS and Bodu SRL with respect to the events hall in Bucharest in relation to agreements between RCS&RDS and LPF with regard to the broadcasting rights for Liga 1 football matches, while the offences of money laundering and accessory to money laundering are alleged to have been perpetrated through RCS&RDS's acquisition of the Bodu S.R.L. events hall in 2016.

On 15 January 2019, the Bucharest Tribunal dismissed the giving of bribe related allegations against RCS&RDS and its past and current directors on the basis that they had become time-barred, convicted RCS&RDS in connection with the offence of money laundering for which the court applied a criminal fine in the amount of RON 1,250. The Bucharest Tribunal's decision also decided on the confiscation from RCS&RDS of an amount of EUR 3,100 plus RON 655 and it maintained the seizure over the two real estate assets first instituted by the DNA. Integrasoft S.R.L. was convicted in connection with the offence of accessory to money laundering for which the court applied a criminal fine of RON 700. Mr. Bendei Ioan was convicted to a 4 years imprisonment sentence in connection with the offence of accessory to money laundering resulting from his capacity of director of Integrasoft S.R.L.

Mr. Serghei Bulgac (Chief Executive Officer and President of the board of directors of RCS&RDS), Mr. Mihai Dinei (member of the board of directors of RCS&RDS), as well as Mr. Alexandru Oprea (former Chief Executive Officer of RCS&RSD) were acquitted in connection with all the accusations brought against them by the DNA.

In the same case file, Mr. Dumitru Dragomir was convicted to a 4 years imprisonment sentence in connection with the offences of receiving of bribe and accessory to money laundering, Mr. Bădiță Florin Bogdan (director of Bodu S.R.L.) was convicted to a 4 years imprisonment sentence in connection with the offences of accessory to the receiving of bribe and to money laundering, the company Bodu S.R.L. was convicted in connection with the offences of accessory to the receiving of bribe and money laundering, while Mr. Bogdan Dumitru Dragomir was acquitted in connection with all the accusations brought against him by the DNA.

The decision also cancels the joint-venture agreement from 2009 concluded between RCS&RDS and Bodu S.R.L., as well as all the agreements concluded between RCS&RDS, Bodu S.R.L. and Integrasoft S.R.L. in 2015 and 2016.

We strongly deem the Bucharest Tribunal's decision to be profoundly unjust, incorrect and ungrounded. This decision is neither final nor enforceable and the appeal can be judged only once we receive the written reasoning of the decision taken by the first instance. We have anyway already challenged this decision to the Bucharest Court of Appeal.

We strongly believe that RCS&RDS, INTEGRASOFT S.R.L. and their current and former officers have acted appropriately and in compliance with the law, and we strongly restate that we will continue to defend against all the above allegations.

Claim for indemnity filed against RCS&RDS in connection to certain matters related to the sale by RCS&RDS of its subsidiary in the Czech Republic in 2015

In March 2018, Yolt Services s.r.o., a Czech company, filed against RCS&RDS a claim for indemnification in front of the Vienna International Arbitral Centre (the "VIAC"). The claimant grounds its request on the sale purchase agreement (the "SPA") concluded between RCS&RDS and Lufusions s.r.o., a subsidiary of Lama Energy Group Czech-based holding, whereby RCS&RDS sold in April 2015 to Lufusions s.r.o. its wholly owned subsidiary in the Czech Republic (the "Sold Company"). As an accessory to the business it had sold to the Lama Energy Group, RCS&RDS as seller accepted to indemnify Lufusions s.r.o., as buyer, for certain types of claims (such as tax, copyright) related to the past activity of the Sold Company, under certain conditions provided under the SPA.

After completing the sale, RCS&RDS conducted in good faith the claims against the Sold Company, aiming to obtain the dismissal and/or the mitigation of such claims. However, under the control of the new owner, the Sold Company suffered several corporate changes (including chain de-mergers) that finally resulted in the Sold Company no longer operating the business sold by RCS&RDS through the SPA. Later, the Sold Company (which had meanwhile become a shell entity) was renamed to Yolt Services s.r.o. In RCS&RDS's view, all these post-closing changes have severely impaired the scope of the indemnity provided under the SPA.

In its claim in front of the VIAC, Yolt Services s.r.o. requests RCS&RDS to pay approximately EUR 4,500 together with the accrued default interest and other costs (amounting to approximately EUR 2,800) as indemnity under the SPA for tax and copyright claims (the latter in favor of a Czech collective rights management body), as well as indemnity for breach of the seller's warranties and for other losses. We deem that the claimant lacks legal standing, and these claims as ungrounded and abusive, while some of them are either statute barred or do not meet the conditions for indemnification under the SPA.

We have also filed in front of the VIAC a counterclaim against the claimant for unpaid amounts for services provided by RCS&RDS to the Sold Company post-closing, in approximate outstanding unpaid amount of EUR 1,100 together with accrued default interest, as well as for other amounts due to RCS&RDS under the SPA.

The hearing in the arbitration proceeding took place in January 2019, and, further, the parties submitted additional documents and arguments. Due to the fact that the claimant submitted a new witness statement on that occasion, the Arbitral Tribunal required the respondent to reply thereto and further decided to set a new hearing in the proceedings for 23 May 2019. On 17 July 2019, the parties submitted the post-hearing briefs. The Arbitral Tribunal is expected to issue the award during October 2019.

Competition Council GSP Tv Investigation

RCS&RDS has been until the date of this report subject to one infringement investigation by the Competition Council which has been finalized in 2015. To the best of our knowledge, no other infringement investigation is pending against RCS&RDS.

In May 2011, Antena TV Group S.A., a leading media group in Romania, made a complaint to the RCC based on our refusal to retransmit one of its channels, GSP TV. The RCC opened an investigation against us in relation to this matter in August 2011.

The RCC issued its decision on March 3, 2015 declaring our initial refusal to retransmit GSP TV channel not abusive and not in violation of any competition laws. The RCC additionally considered that such refusal was justified by the existence of multiple judicial disputes between the parties, including with respect to the application and meaning of the must-carry regime.

The RCC also issued a formal, but not-binding recommendation for us to produce general terms to be complied by third party broadcasters wishing to retransmit their content via our network. Our relations with "must-carry" and pay-tv channels are expressly excluded from the scope of that recommendation.

The RCC's decision was subjected to judicial review. Antena TV Group S.A.'s challenge against the RCC's decision was rejected as ungrounded by the Bucharest Court of Appeal, but Antena TV Group S.A. filed a higher appeal against the first court's award. The trial will be settled as per the Settlement Agreement (the details of this case are explained in a dedicated section above: "Litigation regarding the outcome of the GSP investigation"). Reassessment by the Hungarian Competition Authority of limited aspects in connection with the Invitel acquisition

In connection with the decision issued by the Hungarian Competition Authority (Gazdasági Versenyhivatal – "GVH") in May 2018 (the "Initial Decision") approving the acquisition by our Hungarian subsidiary – DIGI Távközlési és Szolgáltató Kft. ("Digi HU"), as the purchaser, of shares representing in total 99.998395% of the share capital and voting rights of Invitel Távközlési Zrt. ("Invitel") from Ilford Holding Kft. and InviTechnocom Kft., acting as sellers (the "Transaction" – the completion of which we have disclosed to the market on 30 May 2018), on 14 November 2018, the GVH issued several decisions whereby it formally withdrew the Initial Decision and it opened a new investigation ("New Procedure") for reassessing limited aspects in connection with certain settlements where i-TV Digitális Távközlési Zrt. ("i-TV" – one of Digi HU's subsidiaries in Hungary) and Invitel overlap.

GVH's stated reason for withdrawing the Initial Decision is based on allegations that Digi HU has failed to proactively comment during the initial assessment on certain data regarding the territorial scope of certain telecommunications services provided by i-TV, which has been used by the GVH in its Initial Decision. On that basis, the GVH also imposed a fine on Digi HU of approximately EUR 280 (HUF 90,000).

Digi HU's ownership and control over Invitel is not affected by the above-mentioned GVH's decisions, as the GVH simultaneously decided on 14 November 2018 to allow Digi HU to continue to exercise control over Invitel ("Exemption Decision") before the issuance by the GVH of a new decision on the Transaction. As a consequence, on the basis of the Exemption Decision, the implementation by Digi HU of the Transaction is not affected by the GVH's New Procedure, except for certain limited behavioural restrictions from the Initial Decision that were reinstated.

In relation to the operation of i-TV, the GVH imposed certain behavioural interim obligations on Digi HU until the completion of the New Procedure. i-TV represents a minor part of DIGI HU's business in Hungary.

We continue to strongly hold that Digi HU fully cooperated during the initial procedure by providing complete and accurate information, and that the GVH's decision to withdraw the Initial Decision and to apply a fine is incorrect. In December 2018, we have challenged in court the parts of the GVH's decision alleging Digi Hu's guilt and setting the size of the fine.

The court of first instance reduced the fine imposed on DIGI by the GVH from HUF 90,000 to HUF 45,000. The court confirmed the authority's decision regarding DIGI's liability for failure to proactively comment on certain data regarding the territorial scope of certain telecommunications services provided by i-TV, but also ruled that the Initial Decision was adopted not only because of the company's conduct, but also based on the authority's failure to properly clarify the facts of the case. GVH filed an appeal and Digi HU can file a cross-appeal until 23rd of August.

17. SUBSEQUENT EVENTS

The Syndicated Facility Agreement is granted for 12 months, with the possibility of extension up to 24 months from the execution date of the Syndicated Facility Agreement. The value of the Syndicated Facility Agreement is EUR 150,000 and may be increased up to EUR 250,000 (or its equivalent in other currencies).

The Syndicated Facility Agreement is meant to be used by the Company and its subsidiaries for the purpose of investments.

18. EBITDA

In the telecommunications industry the benchmark for measuring profitability is EBITDA (earnings before interest, taxes, depreciation and amortization). EBITDA is a non-IFRS accounting measure.

For the purposes of disclosure in these notes, EBITDA is calculated by adding back to consolidated operating profit/(loss) our charges for depreciation, amortization and impairment of assets. Our Adjusted EBITDA is EBITDA adjusted for the effect of non-recurring and one-off items, as well as mark to market results (unrealized) from fair value assessment of energy trading contracts.

	Three month ended 30 June 2019	Three month ended 30 June 2018	Six months ended 30 June 2019	Six months ended 30 June 2018
Revenues and other income	294,057	253,656	575,236	486,448
EBITDA
Operating profit	37,997	23,846	53,221	55,429
Depreciation, amortization and impairment	70,348	54,804	143,660	101,949
EBITDA	108,345	78,650	196,881	157,378
Other income	-	(2,991)	-	(7,248)
Other expenses	319	5,846	2,507	8,866
Adjusted EBITDA	108,664	81,505	199,388	158,996
Adjusted EBITDA (%)	36.95%	32.13%	34.66%	32.69%

Starting with January 1, 2019, the Company adopted the IFRS 16. The impact of adopting IFRS 16 on EBITDA was EUR 13,536 for the three month period ended 30 June 2019 (EUR 24,975 for the six month period ended 30 June 2019).

For breakdown of depreciation, amortization and impairment refer to Notes 4 and 5(a) and 5(b).

For the six-month period ended 30 June 2019 and 30 June 2018, EBITDA was adjusted to exclude Other income and Other expense.

Other expenses include: (i) EUR 1,575 representing the accrued expenses for the period related to the share option plans from 2017 and 2018 which are expected to be one-time events (for details, please see Note 14); and (ii) EUR 932 impact from the derecognition of the fair value assessment of energy trading contracts.

19. FINANCIAL INDICATORS

Financial Indicator	Value as at 30 June 2019
Current ratio
Current assets/Current liabilities	0.34
Debt to equity ratio
Long term debt/Equity x 100
(where Long term debt = Borrowings over 1 year)	557%
Long term debt/Capital employed x 100	85%
(where Capital employed = Long term debt+ Equity)
Trade receivables turnover
Average receivables/Revenues x 190	35.38 days
Non-current assets turnover
(Revenues/Non-current assets)	0.69

______________________ ______________________

Serghei Bulgac, Valentin Popoviciu

CEO, Executive Director,

AI Terminal

Digi Communications N.V.

6226_ir_2019-08-14-144300_15d8945b-78cc-4409-b0dc-f774d39cb64e.pdf

DIGI COMMUNICATIONS N.V. ("Digi")

Table of contents

Condensed Consolidated Interim Financial Report

Important Information

Cautionary Note Regarding Forward-Looking Statements

Operating and Market Data

Non-Gaap Financial Measures

Rounding

Overview

Recent Developments

Basis of Financial Presentation

Functional Currencies and Presentation Currency

Presentation of Revenue and Operating Expenses

Exchange rates

Growth in Business, RGUs and ARPU

Historical Results of Operations

Results of Operations for the three and six months ended June 30, 2018 and 2019

Revenue

Total operating expenses

Depreciation, amortization and impairment of tangible and intangible assets

Depreciation of property, plant and equipment

Amortization of non-current intangible assets

Amortization of right of use

Amortization of program assets

Other income/(expenses)

Operating profit (1)

Net finance expense (1)

Profit before taxation (1)

Income tax expense (1)

Net profit for the period (1)2

Liquidity and Capital Resources

Historical cash flows

Main variations of assets and liabilities as at June 30, 2019

ASSETS

Right of use assets

Available for sale financial assets (AFS)

Programme assets

LIABILITIES

Interest bearing loans and borrowings

Related parties borrowings

Lease liability

EQUITY

Management Statement for the Interim Condensed Consolidated Financial Statements of Digi Communications NV Group for the six month period ended 30 June 2019

DIGI COMMUNICATIONS NV

CONTENTS Page

GENERAL INFORMATION

Directors:

GENERAL INFORMATION

DIGI Communications N.V.

Condensed Consolidated Statement of financial position (unaudited) for the period 6 month period ended 30 June 2019

DIGI Communications N.V. Condensed Consolidated Statement of Comprehensive Income (unaudited) for the period ended 30 June 2019 (all amounts are in thousand Eur, unless specified otherwise)

DIGI Communications N.V. Condensed Consolidated Statement of Comprehensive Income (unaudited) for the period ended 30 June 2019 (all amounts are in thousand Eur, unless specified otherwise)

DIGI Communications N.V.

Condensed Consolidated Cash Flow Statement (unaudited)

DIGI Communications N.V.

Condensed Consolidated Statement of Changes in Equity (unaudited)

for the period ended 30 June 2019

DIGI Communications N.V. Condensed Consolidated Statement of Changes in Equity (unaudited) for the period ended 30 June 2019 (all amounts are in thousand Eur, unless specified otherwise)

1. CORPORATE INFORMATION

2.1 BASIS OF PREPARATION

(a) Statement of compliance

2. BASIS OF PREPARATION AND ACCOUNTING POLICIES (continued)

(b) Basis of measurement

(c) Judgements and estimates

(d) Functional and presentation currency

2. BASIS OF PREPARATION AND ACCOUNTING POLICIES (continued)

2.2. GOING CONCERN

2.3 SIGNIFICANT ACCOUNTING POLICIES

New pronouncements

IFRS 16: Leases

2.3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Transition to IFRS 16

2.3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Standards issued but not yet effective and not early adopted

3. SEGMENT REPORTING

DIGI Communications N.V.

Notes to the Condensed Consolidated Interim Financial Report (unaudited)

Net profit for the period (1)²