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Bermuda Computer Services Releases Six Month Report

Hamilton, Bermuda: 10 December 1999- The Board of Directors of Bermuda Computer Services Limited reported a loss of $124,416 for the six months ended 30th June 1999 before an inventory write off of $225,000 relating to changes taking place in the PC market following IBM's decision to sell PC's for home use over the Internet. This write off of parts and obsolete equipment gives recognition to the rapidly changing computer equipment and software sales environment which not only affects us but also IBM and all computer hardware manufacturers and distributors.

In fact, BCS has been undergoing a major reengineering during the past three months under the leadership of Wyatt Sellyeh who joined us on 1st September 1999. The Board recognized in September that once IBM decided to cooperate with Dell and to change the way in which they distributed PC's our sales would be very negatively impacted.

In November Ian MacIntyre, the Manager of The Computer Store, which is our retail sales operation, resigned to join the Department of Civil Aviation and earlier in the year our Controller, Keith Oliver, left to get married and resettle in New Zealand.

Other changes have been taking place to adapt to the new circumstances in which we now operate and we have reemphasized our commitment to telecommunications which we believe will be the base for computer services in the future.

BCS Agencies Limited reported earnings of $208,000 in the first six months of this year and it is still a vital part of our operations for quite apart from our activities as agent for IBM hardware it provides us with access to IBM's worldwide software services.

The communications business which we referred to earlier contributed $14,300 to earnings and we believe it should in future become a very important part of our operations.

Notwithstanding the loss reported for the year to date the Directors have decided to pay a dividend on 17th January 2000 of .20¢ per share to shareholders of record 4th January 2000 out of prior years earnings.