Stream Reports Second Consecutive Quarter of Positive EBITDA for 2Q06

WARSAW, Poland, Sept. 1 /PRNewswire-FirstCall/ -- Stream Communications Network & Media Inc. (OTC Bulletin Board: SCNWF & FSE: TPJ), the broadband cable company offering Cable TV, high-speed Internet and VoIP services in Poland, today announced unaudited results for the three- and six-month periods ending June 30, 2006.

Mr. Rynkiewicz, Stream President commented, "We are pleased with our progress, as we continue to grow revenues, while improving operating efficiency.

"This quarter we initiated an extensive cost control and corporate restructuring program to reduce expenses. In addition to improving operating efficiencies, the new management team in Poland is finalizing new initiatives in marketing strategies, daily operations and management systems to improve revenues and expand business. At the same time, we continue to move forward with our strategy of organic growth and acquisition of strategic networks to achieve our goal of becoming a leading supplier of video, data and voice products in our markets."

Financial and Operational Highlights(1) (in million Canadian dollars) 2Q06 2Q05 % Chg. 1H06 1H05 % Chg. Financial Highlights Net revenue 1,545,990 1,445,359 7.0% 3,113,819.0 2,883,031.0 8.0% Operating profit before amortization 161,850 (943,803) n/a 250,599.0 (2,948,870.0) n/a EBITDA(2) 229,691 (826,484) n/a 393,255.0 (2,753,538.0) n/a Net loss (1,403,298) (1,517,202) n/a (1,911,212.0) (4,125,135.0) n/a Operating profit before amort. margin 10.5% -65.3% +758 8.0% -102.3% +1103 bps bps EBITDA margin(2) 14.9% -57.2% +720 12.6% -95.5% +1081 bps bps Net loss margin -90.8% -105.0% +142 -61.4% -143.1% +817 bps bps Operational Highlights Homes passed Subscribers 62,000 62,000 Total RGUs 64,250 64,250 Cable Television RGUs 58,600 58,600 Premium Cable TV 600 600 High-speed internet RGUs 5,000 5,000 IP Telephony RGUs SECOND QUARTER 2006 CONSOLIDATED RESULTS Revenues

Revenues for the quarter rose 7% to $1,545,990 from $1,445,359 in the second quarter of 2005, after adjusting for currency fluctuations from Polish Zlotych to Canadian dollars. In Polish Zlotych, revenues for the period rose 13.5%, to 4,330,516 PLN, up from 3,814,550 PLN in 2Q05.

Overall Expenses

Overall expenses for the quarter declined 42.1% to $1,384,140, or 89.5% of revenues, from $2,389,162, or 165.3% of revenues, for the year-ago quarter.

Administration and services expenses fell 47.5% YoY, to $214,618 from $408,547. As a percentage of revenues, administration and services expenses fell to 13.9% from 28.3% in the year-ago quarter.

Sales and marketing expenses declined 42.5% during the period to $5,397, or 0.3% of revenues, from $9,405, or 0.7% or revenues.

Table 1: Overall Expenses For the three months For the three months ended June 30, 2006 ended June 30, 2005 $ % of revenues $ % of revenues % Change Expenses Administration and services 214,618 13.9% 408,547 28.3% -47.5% Interest, long-term 45,555 2.9% 51,777 3.6% -12.0% Interest, short-term 22,286 1.4% 65,542 4.5% -66.0% Investor relations 13,623 0.9% 660,594 45.7% -97.9% Legal and accounting 48,960 3.2% 23,791 1.6% 105.8% Occupancy costs 30,383 2.0% 127,791 8.8% -76.2% Programming 430,021 27.8% 256,704 17.8% 67.5% Sales and marketing 5,397 0.3% 9,405 0.7% -42.6% Stock-based compensation - 0.0% 207,982 14.4% -100.0% Travel and automotive 73,626 4.8% 71,471 4.9% 3.0% Wages for ongoing operations 499,671 32.3% 505,558 35.0% -1.2% 1,384,140 89.5% 2,389,162 165.3% -42.1% Profit from Operations (before amortization and other items) and EBITDA

Profit from operations (before amortization and other items) for 2Q06 was $161,850 compared to a loss of $943,803 for the same period of last year. Operating margin, in turn, improved to 10.5%, from negative 65.3% for 2Q05.

EBITDA for the quarter improved to $229,691, from negative $826,484 in 2Q05. EBITDA margin, in turn, rose to 14.6%, from negative 57.2% in the year-ago period.

Table 2: EBITDA* For the three months For the three months ended June 30, 2006 ended June 30, 2005 + Revenues $1,545,990 100.0% $1,445,359 100.0% - Expenses 1,384,140 89.5% 2,389,162 165.3% - Interest, long-term 45,555 2.9% 51,777 3.6% - Interest, short-term 22,286 1.4% 65,542 4.5% EBITDA $229,691 14.9% $(826,484) -57.2% * EBITDA does not include the following other items: interest income, financing expenses, standby guarantee, restructuring costs, foreign exchange gain/loss. See "Consolidated Statements of Operations and Deficit" for more detail. Net Loss

During the quarter the company recorded a net loss of $1,403,298, or negative $0.02 per share. This was a $113,904 improvement from the $1,517,202 loss, or negative $0.04 per share in 2Q05.

The net loss also reflects $1,340,164 in one-time charges, and a $118,384 provision for income taxes. One-time charges included $541,875 related to restructuring costs and $798,289 resulted from US$5,000,000 standby guarantee fees incurred in connection with any debt or equity financings Stream may undertake until March 1, 2007.

FIRST HALF 2006 CONSOLIDATED RESULTS Revenues

Revenues for the period rose 8% to $3,113,819 from $2,883,031 in 1H05, after adjusting for currency fluctuation from Polish Zlotych to Canadian dollars. In Polish Zlotych, revenues for the period rose 16.7%, to 8,662,271 PLN, up from 7,420,260 PLN in 1H05.

Overall Expenses

Overall expenses for the quarter declined 50.9% YoY, to $2,863,220 from $5,831,901, or 92.0% of revenues, from $2,389,162, or 202.3% of revenues, for the year-ago period.

Administration and services expenses fell 32.3% YoY, to $485,338 from $717,009 in 1H05. As a percentage of revenues, administration and services expenses fell to 15.6% from 32.3% in 1H05.

Sales and marketing expenses declined 21.6% during the period to $55,886, or 1.8% of revenues, from $71,304, or 2.5% or revenues.

Table 3: Overall Expenses For the six months For the six months ended June 30, 2006 ended June 30, 2005 $ % of revenues $ % of revenues % Change Expenses Administration and services 485,338 15.6% 717,009 24.9% -32.3% Interest, long-term 99,542 3.2% 106,493 3.7% -6.5% Interest, short-term 43,114 1.4% 88,839 3.1% -51.5% Investor relations 25,912 0.8% 1,300,535 45.1% -98.0% Legal and accounting 132,748 4.3% 107,850 3.7% 23.1% Occupancy costs 130,746 4.2% 250,413 8.7% -47.8% Programming 771,064 24.8% 509,384 17.7% 51.4% Sales and marketing 55,886 1.8% 71,304 2.5% -21.6% Stock-based compensation - 0.0% 1,555,709 54.0% -100.0% Travel and automotive 126,645 4.1% 129,118 4.5% -1.9% Wages for ongoing operations 992,225 31.9% 995,247 34.5% -0.3% 2,863,220 92.0% 5,831,901 202.3% -50.9% Profit from Operations (before amortization and other items) and EBITDA

Profit from operations (before amortization and other items) for 1H06 was $250,599 compared to a loss of $2,948,870 for 1H05. Operating margin, in turn, improved to 8.0%, from negative 102.3% for 1H05.

EBITDA for the period improved to $393,255, from negative $2,753,538 in 1H05. EBITDA margin, in turn, rose to 12.6%, from negative 95.5% in the year-ago period.

Table 4: EBITDA* For the six months For the six months ended June 30, 2006 ended June 30, 2005 + Revenues $3,113,819 100.0% $2,883,031 100.0% - Expenses 2,863,220 92.0% 5,831,901 202.3% - Interest, long-term 99,542 3.2% 106,493 3.7% - Interest, short-term 43,114 1.4% 88,839 3.1% EBITDA $393,255 12.6% $(2,753,538) -95.5% * EBITDA does not include the following other items: interest income, financing expenses, standby guarantee, restructuring costs, foreign exchange gain/loss. See "Consolidated Statements of Operations and Deficit" for more detail. Net Loss

During the period the company recorded a net loss of $1,911,212, or negative $0.03 per share. This was a $2,213,923 improvement from the $4,125,135 loss, or negative $0.11 per share in 1H05.

Excluding one time charge of restructuring costs and standby guarantee fees as described before, the expenses of head office in Vancouver excluding interest on long-term debt amounted to approximately $403,055. This includes $27,117 legal fees related to the settlement of the departure of former president of the Company. The Company will continue to reduce costs in Vancouver and Poland to increase the profitable of the Company. It is the Company's objective to significantly reduce Vancouver's office costs from the third quarter of 2006.

LIQUIDITY AND CAPITAL RESOURCES

At June 30, 2006, the company had a working capital deficiency of $1,810,233, an improvement of $741,941 as of December 31, 2005, when the company had a capital deficiency of $2,552,174. This improvement was a result of private placements and shares being issued for services. The company received $1,795,741 total proceeds from the placements done in the current quarter.

On May 8, June 15, and June 29, 2006 Stream completed private placements for the issuance of 2,400,000, 4,468,332, and 333,333 units, respectively. Each unit is comprised of one common share and a non-transferable share purchase warrant at a price of $0.15 USD per unit, where two warrants entitle the holder to purchase an additional common share of the Company at a purchase price of $0.225 USD each for a period of two years.

At June 30, 2006 the company had a bank credit facility in Poland of $500,000 USD.

KEY DEVELOPMENTS Jan S. Rynkiewicz appointed new President & CEO of Stream

Effective June 12, 2006, Jan S. Rynkiewicz was promoted to President & CEO of the Company. Iwona Kozak will continue to serve on Stream's Board in the capacity of Executive Director & Corporate Secretary. The Board of Stream believes that the Company's President & CEO, along with other top executives, ideally should be located in the country of its operations where the crucial strategic decisions and negotiations take place. Iwona in her new role will have the authority to lead all aspects of the Company's public, corporate, IR and management of all North American interfaces.

Stream Moves Headquarters to Warsaw, Poland

As of July 1st the Company's head office was moved from Vancouver to Warsaw, Poland, in line with the objective of introducing various measures to bring efficiencies to its operations while building a strong Central European communications company. The head-office in Warsaw will bring together the company's top corporate, finance and marketing department's management. The Company has retained its corporate office in Vancouver with a significantly reduced number of employees to serve its North American shareholders.

Stream Receives a US$5M Standby Guarantee

On June 15, 2006, the company announced it had secured a standby guarantee for a combined amount of US$5,000,000 for a period ending March 1, 2007 in connection with any debt or equity financings Stream may undertake during that period. This financing guarantee allows the company to proceed with its acquisition plan. In consideration for providing the guarantee, Stream has agreed to pay the guarantors a fee in shares of the Company equal to 15% of the guaranteed amount resulting in the issuance of 3,807,107 shares at a price of US$0.19 per share.

Przemyslaw Aussenberg Appointed to Stream Board of Directors

On June 26, 2006, the Company announced the appointment of Mr. Przemyslaw Aussenberg to the Board of Directors. Mr. Aussenberg brings over 15 years of experience in business management and has held a number of executive management positions, including Financial Director for ITI Group, and Chief Financial Officer and a Board member with TVN, a leading commercial television company in Poland. He also served as Chief Financial Officer of Elektrim S.A., an energy and telecom conglomerate which indirectly controlled 25% of PTC, the largest mobile telephone operator in Poland. Since 2004, Mr. Aussenberg has been a Board member of Kouri Capital, responsible for business development and restructuring.

About Stream Communications

Stream is a broadband cable company and offers Cable TV, high-speed Internet and VoIP services in Poland. Stream is the 7th largest Cable TV operator in Poland, focusing on the densely populated markets of Southern Poland.

Safe Harbour for Forward-Looking Statement

Except for statements of historical fact, the information presented herein constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include general economic and business conditions, the ability to acquire and develop specific projects, the ability to fund operations and changes in consumer and business consumption habits and other factors over which Stream Communications Network and Media Inc. has little or no control.

Stream Communications and Network & Media Inc. Consolidated Balance Sheets Unaudited (In Canadian Dollars) June 30, 2006 December 31, 2005 ASSETS Current Assets Cash and cash equivalents $343,379 $439,937 Accounts receivable - net 314,391 293,898 Inventory 11,691 8,459 Prepaid expenses and advances 75,305 75,035 744,766 817,329 Property, plant and equipment 9,113,189 9,367,012 Intangibles 2,293,501 2,927,767 $12,151,456 $13,112,108 LIABILITIES Current Liabilities Trade accounts payable and accrued liabilities $1,720,286 $2,565,017 Accounts payable pertaining to financing costs 430,473 477,113 Corporation income taxes payable 14,965 11,577 Deferred revenue 29,087 15,430 Loans payable and leasing contracts - current portion 375,511 300,366 2,570,322 3,369,503 Long-term Liabilities Loans payable and leasing contracts 4,731,732 4,873,760 7,302,054 8,243,263 Non-controlling interest 718,788 690,678 8,020,842 8,933,941 SHAREHOLDERS' EQUITY Capital stock - Authorized 150,000,000 common shares of no par value Issued and fully paid 43,309,671 41,129,499 Contributed surplus 2,877,474 2,877,474 Private placement subscriptions - 291,455 Warrants 3,652,832 2,439,684 Cumulative translation account (1,397,065) (158,859) Deficit (44,312,298) (42,401,086) 4,130,614 4,178,167 $12,151,456 $13,112,108 Stream Communications and Network & Media Inc. Consolidated Statements of Operations and Deficit Unaudited (In Canadian Dollars) For the three For the three For the six For the six months ended months ended months ended months ended June 30, 2006 June 30, 2005 June 30, 2006 June 30, 2005 Revenues $1,545,990 $1,445,359 $3,113,819 $2,883,031 Expenses Administration and services 214,618 408,547 485,338 717,009 Interest, long-term 45,555 51,777 99,542 106,493 Interest, short-term 22,286 65,542 43,114 88,839 Investor relations 13,623 660,594 25,912 1,300,535 Legal and accounting 48,960 23,791 132,748 107,850 Occupancy costs 30,383 127,791 130,746 250,413 Programming 430,021 256,704 771,064 509,384 Sales and marketing 5,397 9,405 55,886 71,304 Stock-based compensation - 207,982 - 1,555,709 Travel and automotive 73,626 71,471 126,645 129,118 Wages for ongoing operations 499,671 505,558 992,225 995,247 1,384,140 2,389,162 2,863,220 5,831,901 Profit (loss) before undernoted items 161,850 (943,803) 250,599 (2,948,870) Amortization of property, plant and equipment 220,554 239,517 446,452 465,188 Amortization of intangibles 246,080 233,913 589,083 480,420 466,634 473,430 1,035,535 945,608 Loss before other items (304,784) (1,417,233) (784,936) (3,894,478) Other items Interest income 4,430 5,644 8,038 10,370 Financing expenses (237) (86,656) (9,820) (170,429) Standby guarantee (798,289) - (798,289) - Restructuring costs (541,875) - (541,875) - Foreign exchange gain (loss) 155,414 (15,277) 149,340 (50,034) (1,180,557) (96,289) (1,192,606) (210,093) Loss before non- controlling interest (1,485,341) (1,513,522) (1,977,542) (4,104,571) Non-controlling interest (36,341) (3,680) (52,054) (20,564) (1,521,682) (1,517,202) (2,029,596) (4,125,135) Provision for income taxes 118,384 - 118,384 - Net loss for the period (1,403,298) (1,517,202) (1,911,212) (4,125,135) Deficit, beginning of year (42,909,000) (39,197,660) (42,401,086) (36,589,727) Deficit, end of period $(44,312,298) $(40,714,862) $(44,312,298) $(40,714,862) Loss per share, basic and diluted Loss per share $(0.02) $(0.04) $(0.03) $(0.11) Weighted average number of shares Basic and diluted 65,381,491 38,268,002 65,381,491 38,268,002 Stream Communications and Network & Media Inc. Consolidated Statements of Cash Flows Unaudited (In Canadian Dollars) For the three For the three For the six For the six months ended months ended months ended months ended June 30, 2006 June 30, 2005 June 30, 2006 June 30, 2005 Operating Activities Net loss for the period $(1,403,298) $(1,517,202) $(1,911,212) $(4,125,135) Items not involving cash 466,634 473,430 1,035,535 945,608 Amortization - 207,982 - 1,555,709 Stock-based compensation 39,250 1,067,881 90,960 1,487,754 Issuance of shares for debt - - Issuance of shares for services 416,875 - 416,875 - Issuance of share for restructuring costs 798,290 - 798,290 - Issuance of shares for standby guarantee 36,341 54,029 52,054 70,226 Non-controlling interest (27,789) 105,047 (29,943) (76,710) Change in non-cash working capital Accounts receivable (1,699) 8,146 (3,533) (8,120) Inventory 4,727 2,422 (2,887) (12,478) Prepaid expenses and advances (353,420) (520,121) (843,941) (620,859) Accounts payable and accrued liabilities (1,925) - 3,799 - Corporation income taxes (50,716) - 3,530 - Deferred revenue (76,730) (118,386) (390,473) (784,005) Financing Activities Issuance of shares and warrants for cash 1,199,481 110,410 1,795,741 110,410 Subscriptions received for private placements to be issued - 484,775 - 1,313,078 Proceeds (repayment) of loans and leasing contracts (108,238) 69,256 (66,883) 38,912 Net cash provided by financing activities 1,091,243 664,441 1,728,858 1,462,400 Investing Activities Purchase of property, plant and equipment (256,955) (622,817) (540,757) (1,263,432) Net cash used in investing activities (256,955) (622,817) (540,757) (1,263,432) Foreign exchange effect on cash and cash equivalents (note 6) (653,048) 60,602 (894,186) 113,549 Change in cash and cash equivalents 104,510 (16,160) (96,558) (471,488) Cash and cash equivalents at beginning of period 238,869 184,980 439,937 640,308 Cash and cash equivalents at end of period $343,379 $168,820 $343,379 $168,820 (1) Unless otherwise stated, all financial figures discussed in this announcement are unaudited, prepared in accordance with Canadian generally accepted accounting principles, and expressed in Canadian dollars. (2) See EBITDA calculations on tables 2 and 4.