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KeyTech Limited Announces Preliminary Results For The Year Ended 31st March 2004

Hamilton, Bermuda: 22 June 2004 - The KeyTech Group of Companies has delivered to its shareholders a Net Income of $10.4M, a return that is very similar to that of last year. The $2.3M cost of damages resulting from hurricane Fabian, has been mitigated by the improved performance from marketable securities, in particular the $2.2M gain from the sale of Bank of Bermuda shares. The prior year's results included a $1.37M one-off increase in equity earnings from affiliates.

"The diversity of our operations and assets within KeyTech has enabled earnings to be sustained in the face of the severe financial impact of hurricane Fabian and the continuing competitive pressures within the telecommunications marketplace." Said CEO Sheila Manderson

Consolidated net income for the prior year was $10,162,168.

KeyTech's basic earnings per common share for the year were $1.009 before discontinued operations ($0.998 on a fully diluted basis).

KeyTech's basic earnings per common share for the year were $0.934 after discontinued operations ($0.927 on a fully diluted basis).

Total cash dividends paid to common shareholders for the year was $0.59 per common share, increased from $0.515 per common share in the prior year. At the end of the year net assets per common share were $11.99 ($11.42 on a fully diluted basis).

On 15th November 2003 KeyTech exercised its right to redeem the remaining preferred shares and as a result has only common shares in issue at the year end. During the year holders of 1,411,325 preferred shares chose to convert their preferred shares to common shares prior to the redemption date.

Operating revenues for the year were $93,055,513 as compared to $87,444,121 for prior year. Of the $5.6M increase $3.5M can be attributed to the publication of the Bermuda Telephone Directory by the Company for the first time. KeyTech has also been successful in growing other revenue lines including domestic wireline, consulting, international long distance and cellular services.

Hurricane Fabian caused significant damage to BTC's network resulting in total expenditures of $2,326,962 to repair the network in September 2003 and subsequent months. Nevertheless, as significant as this impact was, on a multi year basis it is less costly than if KeyTech maintained insurance coverage of outside cabling for wind storm damage.

Total equity earnings in affiliates for the year were $165,814. In the prior year an affiliate of KeyTech had a one time increase in equity earnings in affiliates $1,370,670. Total equity earnings in affiliates for the prior year were $1,661,757.

Investment income for the year was $2,740,217 and included a gain of sale of Bank of Bermuda shares of $2,201,185. Investment losses for the prior year were $421,903.

Net income before discontinued operations was $11,233,382 similar to net income before discontinued items for the prior year of $11,268,759.

Losses attributable to discontinued operations were $803,017 for the year and $1,106,591 for the prior year.

Net income after discontinued operations for the year was $10,430,265 as compared to $10,162,168 for the prior year.

During the financial year KeyTech invested $18.8 million in capital assets, to maintain existing plant and improve its networks, and also support provision of new services and increased coverage of high-speed Internet access to Bermuda residences via Asymmetrical Digital Subscriber Line (ADSL) technology. KeyTech continues to recognize the value in continuing to invest in Bermuda's telecommunications infrastructure where an adequate return for its shareholders will likely be achieved.

"This is an exciting time to be a provider in the telecommunications marketplace. It is dynamic and competitive, and the challenges are many. I believe that the key to our success this past year, pre and post Fabian, was to remain focused on our strategic initiatives for enhancing shareholder value, growing revenues and providing high levels of customer service." Said KeyTech CEO Sheila Manderson.

The dividend for the common shareholders of KeyTech Limited for the quarter ending 30th June 2004 will be 15 cents per share. It will be payable to the common shareholders of record on 30th June 2004 and the payment date will be 15th July 2004.