Matav’s share in profits of associated companies was NIS 4.6 million (US$1 million) in the third quarter, compared with NIS 7.8 million (US$1.8 million) in the previous quarter and NIS 5.9 million (US$1.3 million) in third-quarter 2002. The decrease stems from Matav’s accounting tax expenses of NIS 7.2 million (US$1.6) due to its share of the profits of Partner Communications (which was accumulated on an equity basis). The Partner investment was considered a strategic investment until the third quarter of 2003, when management changed its strategy regarding the holding. On November 3, 2003, Matav sold approximately 3.8 million shares of Partner for NIS 114.5 million (US$25.8 million). Matav will report a capital gain from the sale of NIS 63 million (US$14.2 million) after tax in its fourth-quarter financial results. Following the sale, Matav’s beneficial holding in Partner is approximately 5.3 %.

Matav’s net loss continued to decrease this quarter. The company reported a third-quarter net loss of NIS 19.8 million (US$4.5 million), or NIS 0.67 (US$0.15) per ordinary share, compared with a net loss of NIS 22.7 million (US$5.1 million), or NIS 0.78 (US$0.18), in the previous quarter. For the third quarter of 2002, Matav reported a net loss of NIS 39.8 million (US$9 million), or NIS 1.38 (US$0.31) per ordinary share.

Third-quarter EBITDA continued to increase, reaching NIS 39 million (US$8.8 million) from NIS 36.7 million (US$8.3 million) for second-quarter 2003 and NIS 14.7 million (US$3.3 million) for third-quarter 2002.

At September 30, 2003, Matav had approximately 267,400 subscribers, compared with 271,700 at June 30, 2003, and 276,700 at September 30, 2002. The company’s fast Internet service has attracted more than 52,000 subscribers to date.

During the third quarter, ARPU continued its upward trend, reaching NIS 201.5 (monthly, including 18% value-added tax) compared with NIS 193.6 in the previous quarter and NIS 174.9 in third-quarter 2002.

In October 2003, Matav, through a wholly owned subsidiary, completed the sale of approximately 1.3 million shares in return for approximately NIS 39.4 million (US$8.8 million).

“We are pleased that we successfully returned to operating profit this quarter after many quarters of operating loss,” said Matav CEO Amit Levin. “We are pleased with our achievements, reflected in increased revenues, increased ARPU and a continued decrease in operating expenses. These results are especially noteworthy considering the fierce competition in our market. Also important to emphasize is our continued increase in EBITDA, which reached approximately 30% of revenues in this quarter. The recent sale of Partner shares as well as the sale of our company’s shares will improve our liquidity position and increase our shareholder equity by approximately NIS 154 million as well as reduce our net debt.

“To address the competition in the multi-channel market, Matav and the other cable companies have launched an aggressive campaign to jointly market our services under the brand ‘HOT.’ This bright and attractive campaign will position us as a truly national brand with nationwide presence, superb product offerings and the first-quality service our customers demand and deserve.”

Revenues for the nine-month period reached NIS 404.2 million (US$91 million) compared with NIS 367.7 million (US$82.8 million) in the comparable period in 2002.

Nine-month selling, marketing and G&A expenses decreased to NIS 63.5 million (US$14.3 million) from NIS 65.8 million (US$14.8 million) in the year-earlier period.

The net loss for the nine months was NIS 67 million (US$15.1 million), or NIS 2.30 (US$0.52) per ordinary share, compared with net income of NIS 82 million (US$18.5 million), or NIS 2.84 (US$0.64) per ordinary share, in the first nine months of 2002.

Management will conduct a teleconference today at 10:30 a.m. U.S. Eastern Time. To participate, please dial +1-866-500-4964 or +1-866-500-4953 in the United States and +972-3-925-5910 internationally, several minutes prior to the start of the conference.

Matav is one of Israel’s three cable television providers, serving roughly 25 percent of the population. Matav’s investments include 5.3 percent of Partner Communications Ltd., a GSM mobile phone company, and 10 percent of Barak I.T.C. (1995), one of the three international telephony-service providers in Israel.

(This press release contains forward-looking statements with respect to the Company’s business, financial condition and results of operations. These forward-looking statements are based on the current expectations of the management of Matav Cable only, and are subject to risk and uncertainties, including but not limited to changes in technology and market requirements, decline in demand for the company’s products, inability to timely develop and introduce new technologies, products and applications, loss of market share and pressure on pricing resulting from competition, which could cause the actual results or performance of the Company to differ materially from those contemplated in such forward-looking statements. The Company undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. For a more detailed description of the risk and uncertainties affecting the company, reference is made to the Company’s reports filed from time to time with the Securities and Exchange Commission.)

Contacts:

Ori Gur-Arieh, Counsel
Matav Cable Systems
Telephone: +972-9-860-2261

Ayelet Shaked Shiloni
Integrated IR
Telephone US: +1-866-447-8633 / Israel: +972-3-635-6790
E-Mail: ayelet@integratedir.com

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MATAV - CABLE SYSTEMS MEDIA LTD.
(An Israeli Corporation)
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

									Convenience translation
			December 31, 2002			September 30 2003			September 30 2003
			Adjusted NIS			Adjusted NIS			U.S. dollars
			(In thousands)
ASSETS:				(Audited)			(Unaudite	d)		(Unaudite	d)
CURRENT ASSETS:
Cash and cash equivalents				7,635			6,555			1,476
Accounts Receivables:
Trade				68,973			65,746			14,805
Other				17,910			15,403			3,468
Total current assets				94,518			87,704			19,749
INVESTMENTS AND LONG-TERM LOANS:
Investments in affiliated companies				22,490			45,521			10,250
Investments in other companies				16,306			16,306			3,672
Long-term loans granted to employees				614			445			100
Severance pay fund				317			-			-
				39,727			62,272			14,022
FIXED ASSETS:
Cost				1,995,217			2,034,672			458,156
Less - accumulated depreciation and
amortization				999,226			1,120,853			252,388
				995,991			913,819			205,768
OTHER ASSETS AND DEFERRED CHARGES
Net of accumulated amortization				6,949			4,896			1,103
				1,137,185			1,068,691			240,642

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MATAV – CABLE SYSTEMS MEDIA LTD.
(An Israeli Corporation)
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

									Convenience translation
			December 31, 2002			September 30 2003			September 30 2003
			Adjusted NIS			Adjusted NIS			U.S. dollars
			(In thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY:				(Audited)			(Unaudited	)		(Unaudited	)
CURRENT LIABILITIES:
Short-term bank credit				516,192			533,933			120,228
Current maturities of debentures				33,866			33,938			7,642
Accounts payable and accruals:
Trade				84,395			70,965			15,980
Affiliated companies - current account				2,693			17,710			3,988
Other				84,948			99,899			22,495
Total current liabilities				722,094			756,445			170,333
LONG-TERM LIABILITIES:
Accrued severance pay, net				-			1,013			228
Loans and debentures (net of current
maturities):
Loans from bank and others				142,658			114,380			25,755
Debentures				99,861			66,498			14,974
Customers' deposits for converters, net of
accumulated amortization				24,909			27,129			6,109
Total long-term liabilities				267,428			209,020			47,066
Total liabilities				989,522			965,465			217,399
SHAREHOLDERS’ EQUITY:
Share capital				49,084			49,084			11,052
Share premium				403,003			403,003			90,746
Retained loss				(239,238	)		(321,359	)		(72,362	)
				212,849			103,728			29,436
Less-Company’s shares held by consolidated company				(65,186	)		(27,502	)		(6,193	)
Total shareholders' equity				147,663			103,226			23,243
				1,137,185			1,068,691			240,642

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MATAV - CABLE SYSTEMS MEDIA LTD.
(An Israeli Corporation)
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share and per ADS data)

															Convenience translation
			Three months ended September 30,						Nine months ended September 30,						Nine months ended September 30,
			2002			2003			2002			2003			2003
			Adjusted NIS												U.S. dollars
				(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenue				124,990			138,375			367,735			404,152			91,005
operating expenses				128,264			117,071			392,560			351,484			79,145
Gross profit (loss)				(3,274	)		21,304			(24,825	)		52,668			11,860
Selling, marketing, general and administrative
expenses:
Selling and marketing				9,634			9,961			31,850			29,564			6,657
General and administrative				11,797			10,770			33,923			33,977			7,651
				21,431			20,731			65,773			63,541			14,308
Operating profit (loss)				(24,705	)		573			(90,598	)		(10,873	)		(2,448	)
Financial expenses, net				(19,574	)		(21,854	)		(27,015	)		(67,571	)		(15,215	)
Other income (expenses), net				(1,400	)		(3,097	)		294,632			(4,442	)		(1,000	)
Income (loss) before taxes on income				(45,679	)		(24,378	)		177,019			(82,886	)		(18,663	)
Taxes on income				-			-			107,189			-			-
Income (loss) from operations of the Company and its subsidiaries				(45,679	)		(24,378	)		69,830			(82,886	)		(18,663	)
Equity in earnings of affiliated companies, net				5,866			4,624			12,195			15,863			3,572
Net income (loss)				(39,813	)		(19,754	)		82,025			(67,023	)		(15,091	)
Earnings (loss) per ordinary share				(1.38	)		(0.67	)		2.84			(2.30	)		(0.52	)
Earnings (loss) per ADS				(2.76	)		(1.34	)		5.68			(4.60	)		(1.04	)
Weighted average number of shares outstanding
in thousands				28,861			29,533			28,861			29,093			29,093
Weighted average number of ADSs outstanding in thousands				14,431			14,767			14,431			14,547			14,547
Operating profit (loss)				(24,705	)		573			(90,598	)		(10,873	)		(2,448	)
Depreciation and amortization, net (including
income from amortization of deposits for
converters)				39,443			38,440			114,839			118,201			26,616
Memo EBITDA(*)				14,738			39,013			24,241			107,328			24,168

(*)Earnings before interest, taxes, depreciation and amortization, (‘EBITDA’) is presented because it is a measure commonly used in the telecommunications industry and is presented solely in order to improve the understanding of the Company’s operating results and to provide a further perspective regarding these results. EBITDA, however, should not be considered as an alternative to operating income or income for the period as an indicator of the operating performance of the Company. Similarly, EBITDA should not be considered as an alternative to cash flows from operating activities as a measure of liquidity. EBITDA is not a measure of financial performance under generally accepted accounting principles and may not be comparable to other similarly titled measures for other companies. EBITDA may not be indicative of the historic operating results of the Company nor is meant to be predictive of potential future results. See the calculation aforementioned.

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