"significantly surpassed the company's performance expectations''.

Financial results for the second quarter of 2000 were released by Flag on Tuesday and showed accounting revenues rising $5.5 million to reach $24.7 million in the second quarter from $19.2 million in the first quarter.

A release from the company revealed that EBITDA (earnings before interest, taxes, depreciation and amortisation) turned positive a year ahead of plan and that cash revenue grew a healthy 33 percent in the first six months of 2000 compared with the first half of 1999.

The higher than expected revenues were a result , the company said, of strong sales growth across the Flag Telecom Network and strong cost containment.

"Based on the strength of our half year results, we are increasing our accounting revenue target for 2000 by 25 percent to $90 million,'' said Ed McCormack, Chief Operating Officer and CFO.