KeyTech reports 9% rise in full year profit to USD7.2m

26 Jun 2012

KeyTech Holding Limited, the parent of Bermuda Telephone Company (BTC) and Logic Communications, has released its preliminary financial results for the year ended 31 March 2012, booking net profit of USD7.2 million compared to USD6.6 million in fiscal 2010/11. In a filing to the Bermuda Stock Exchange (BSX), KeyTech said that its latest financial results included a USD10.5 million gain from the disposal of domestic mobile operator M3 Wireless and the acquisition of a 42% stake in Bermuda Digital Communications (CellularOne), the mobile arm of Atlantic Tele-Network (ATN), in May 2011. Under the plan, CellularOne merged its operations with M3 Wireless creating an enlarged entity CellOne with close to 50% of the Bermuda mobile market. Further, KeyTech booked USD8.9 million of additional amortisation expense in 2011/12 due to ‘revised estimates of future cash generation and useful life of a number of tangible and intangible assets’, and USD3 million in staff termination costs. Excluding these three exceptional items the group’s net profit for the year was USD8.6 million.

Operating revenues in FY2011/12 fell by USD5.1 million versus the prior year, while total operating revenues declined USD1.8 million in the period under review, due to a USD2.3 million drop in residential wireline revenues, which was only partially offset by growth in data and international capacity revenues. KeyTech CEO Sheila Lines noted however, that the year-on-year fall was ‘substantially less than that experienced in the prior year’ when KeyTech booked a USD3.9 million dip in wireline revenues. Total operating expenses meanwhile, increased USD1.3 million primarily due to one-off amortisation expenses, while depreciation and amortisation costs increased by USD4.7 million. CAPEX for the full year reached USD11.7 million, down from USD14.0 million in fiscal 2010/11, comprising in the main the Prism deployment in Hamilton, the construction of fibre plant in Cayman Islands and USD3.8 million in additional cellsites for M3 Wireless.

Commenting on the latest results, Lines said: ‘Despite continued weak economic conditions affecting group revenue, 2011/12 was a year in which we tangibly advanced our strategies as a group of companies with the facilities and breadth to meet and exceed the global and local communication needs of our customers. In the corporate segment BTC completed our rebuild of Bermuda’s Hamilton network, branded ‘PRISM’, to a full Ethernet network using Cisco technology. In the residential market BTC launched 8Mbps and 10Mbps DSL. In the Cayman Islands we completed our fibre network in George Town. Internationally, Logic established a network point of presence in London, in addition to existing points of presence in New York, Miami, Bermuda and the Cayman Islands.’

In fiscal 2012/13, BTC will work to upgrade its network to offer higher broadband speeds to the home, using VDSL and fibre-to-the-home (FTTH). The CEO confirmed that work on the deployment of these technologies will start in the coming fiscal year. Further, KeyTech reports that in January this year its Logic Cayman unit was issued with an IPTV licence, allowing it to start offering triple-play services in the Cayman Islands. ‘We intend to offer a triple-play in Cayman over a fibre residential network and we have commenced construction of this residential network. We expect the first phase to be in service in our 2012/13 fiscal year,’ Lines said.

Bermuda, Bermuda Telephone Company (BTC), One Communications