KeyTech reports 15% rise in net income in 2012/13

11 Jul 2013

Bermuda-based KeyTech Group, which includes incumbent operator Bermuda Telephone Company (BTC), reported net profit of BMD8.3 million (USD8.3 million) for the year ended 31 March 2013, up 15.3% compared with BMD7.2 million in FY 2011/12. Full year operating revenues dipped to BMD73.9 million from BMD80.6 million the previous year, not helped by a BMD3.3 million year-on-year fall in voice and data sales it said. In addition, the group’s directory services unit also declined BMD600,000 in the period under review, impacted by the weak economy. KeyTech also reported that sales from hardware and software products declined by BMD1.2 million in the period under review, although the fall was partly offset by reductions in cost of goods sold. Revenues derived from other services, including colocation and professional services also fell by BMD1.6 million y-o-y, while consolidated operating expenses in FY 2012/13 fell BMD12.4 million largely as a result in reductions in salary expenses and a one-off amortisation charge in the prior year. Depreciation and amortisation charges fell by BMD5.4 million, KeyTech said. Total capital expenditure in FY 2012/13 reached BMD21.6 million compared to BMD11.7 million in 2011/12. This included the purchase of TeleCayman in the Cayman Islands as well as infrastructure deployment to increase DSL speeds at BTC and the continuation of the fibre-optic build and IPTV rollout in the Cayman Islands.

Commenting on the results KeyTech chief executive officer Lloyd Fray said that he was pleased to have increased group profitability despite a challenging economic climate. ‘The increase in net income is a result of the ongoing efforts of management to improve efficiencies and reduce operating expenses in our subsidiaries in addition to the success of our investments in associates … Over the past year we have positioned the company well for the future. In Cayman, we acquired TeleCayman, which solidified our position in the corporate data market while we continue to expand our fibre footprint and triple-play services in the residential market,’ he said. ‘In April this year, we amalgamated [Bermudan ISPs] Logic Communications and North Rock Communications. This move sets the foundation for the launch of new and innovative IP products and we will leverage the synergies between the two companies to bring down operating costs and reduce the cost to the consumer.’

The CEO went on to point out that in the period under review BTC introduced VDSL2 technology to offer customers higher speeds and to help improve reliability. ‘The VDSL2 project will allow BTC to deliver broadband access download speeds of up to 25Mbps to homes and businesses for internet and video streaming. This project will continue in 2013/14,’ he said. ‘Regulatory reform is presenting many challenges for KeyTech. We will continue to work with the Regulatory Authority to ensure that our subsidiaries will be able to compete and leverage the new Integrated Class Operating Licenses (ICOLs).’

Bermuda, Bermuda Telephone Company (BTC)