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Preliminary Announcement of KeyTech Six Month Interim Results
Hamilton, Bermuda, December 7, 2006 - KeyTech consolidated net income for the six month period ended 30th September 2006 is $6,831,281 compared to net income for the same period last year of $6,305,116, an increase of $526,165.
Operating revenues for the period were $52,189,694 as compared to $51,297,839 for the same period last year, an increase of $891,855. This increase is due to increased revenues from M3 Wireless cellular services and to increased directory revenue from the Bermuda Yellow Pages.
Operating expenses for the period were $36,285,658 as compared to $34,934,285 for the same period last year, an increase of $1,351,373. In the current six-month period, BTC incurred $880,143 in redundancy costs as part of a management restructuring. Other increased expenses include inflation-adjusted salary costs, higher electricity rates due to global fuel prices and product-marketing expenses. Operating expenses for prior period included a $1,314,497M adjustment to cash balances due to banking irregularities discovered in October 2005.
Amortisation expenses for the period were $9,259,409 as compared to $9,631,605 for the same period last year, a decrease of $372,196.
Equity loss in Affiliates for the six month period is $245,293 as compared to $881,914 in the prior period, a decrease of $636,621. The decrease is due to improved operating performance by affiliates.
During the six month period, KeyTech invested $8,533,650 in capital assets to improve current infrastructure and develop new services including the wireless easyConnect data service. $6,704,300 was invested in capital assets in the prior period.
Basic and fully diluted earnings per share for the six month period ended 30th September 2006 were $0.52 compared to $0.48 for the same period last year.
BTC continued to improve the range of products offered to its customers. DSL was upgraded to significantly faster speeds of two and three megabits per second at no extra cost to the consumer. A new corporate data product, gigabit Ethernet, which provides faster data connectivity for computer networks and corporate offices, was offered to the corporate customer base.
In July, M3 Wireless launched the easyConnect wireless broadband access service. This wireless network, separate from the cellular network, provides higher speed and more reliable broadband access than cellular networks. easyConnect has proven to be popular with residential broadband users. Initial take up was strong and continues to grow steadily.
Logic revenue remained in line with the prior period due to growth in data and long distance voice services revenue offsetting a decline in professional services revenue.
Bermuda Yellow Pages had another successful directory campaign for the 2006/7 print directory and the directory website www.bermudayp.com has been re-launched with improved local search capability, classified advertising plus island and dining guides.
Investment income from marketable securities for the period was $431,948 compared to $299,590 for the same period last year.
In the prior period other income of $1,735,275 arose on a gain from the sale of Packet Exchange shares. There was no other income in the current six month period.
Consolidated net income before discontinued operations for the current six month period is $6,831,281 as compared to $7,884,902 for the prior six month period. Excluding the redundancy costs for BTC income from continuing operations for the current six month period was $7,711,424. Excluding the one time gain made on the sale of the investment in Packet Exchange and the adjustment made to reflect the cumulative impact of the banking and cashiering irregularities, income from continuing operations for the prior period was $7,464,124.
Losses from discontinued operations of $1,579,786 in the prior six month arose on the discontinuance of BD&M, a directory business in the Bahamas. There was no loss from discontinued operations in the current period.
The Company declared a dividend of $0.15 per share for the quarters ending June 30th 2006 and September 30th 2006. In addition, the Board declared a one-for-ten stock dividend on July 24th 2006.