KeyTech Reports Earnings Of $5.7 Million

October 31, 2014

Lloyd-FrayThe KeyTech Group of Companies today [Oct 31] announced earnings of $5.7 million for the year ended March 31, 2014, compared to $8.3 million in the prior year.

“Notwithstanding the economic growth challenges in Bermuda and Cayman, the last 12 months have been successful in terms of strategic positioning for the company,” said KeyTech CEO Lloyd Fray [pictured].

“In Bermuda, KeyTech maintained its market share in spite of intense price competition in the telecommunications market. We focused on managing expenses across our subsidiaries as well as through the efficiencies and cost savings as a result of Logic’s amalgamation with North Rock and the acquisition of TeleCayman.”

“The company’s growth strategy is geared towards owning data-access infrastructures that can meet the demands of future capacity requirements, diversifying earnings across two jurisdictions and enhancing shareholder value.”

Operating revenues for the year were $81.1 million compared to $74 million for the prior year, an increase of $7.1 million. Due to Logic’s amalgamation with North Rock, data revenues increased $5.5 million over the prior year while voice revenues declined $0.3 million as customers continue to rely more heavily on both cellular and internet-based local and long distance voice products.

“Directory revenues have been impacted by reduced advertising spend as a result of the weak economy and are down $0.4 million over the prior year. Hardware and Software revenues remained relatively consistent with the prior year. Other revenues which include professional services, co-location and third party property rentals have also remained consistent with the prior year.

Total operating expenses increased $9.8 million primarily due to the company’s acquisition and growth strategy. Salaries and employee benefit expenses increased $1 million due to the additional headcount required to support Logic Bermuda following the amalgamation.

One-time redundancy costs across both jurisdictions as a result of the transactions were $0.9 million, an increase of $0.3 million over the prior year. Depreciation and amortization expenses increased $4.1 million from the amortization of the intangible assets created by both acquisitions and the increased depreciation of assets deployed in WestTel Limited’s fibre to the home build.

Total capital expenditure in the current year was $44.8 million compared to $21.6 million in the prior year. This included the $26.8 million acquisition of North Rock; the remaining funds were used to expand infrastructure to increase DSL speeds at BTC and the continuation of the fibre build and IPTV rollout in the Cayman Islands, both of which lead to improved product offerings for customers.

Share of income of associates for the year were $7.9 million as compared to $6.9 million for the prior year.

Profit attributable to shareholders was $5.7 million as compared to $8.3 million for the prior year.

Total cash dividends paid to common shareholders for the current and prior year was $0.48 per common share. KeyTech’s basic and fully diluted earnings per common share from continuing operations for the year were $0.39 compared to $0.57 in the prior year.

Investment income was $129,158 as compared to $163,434 for the prior year.

Total comprehensive income for the year was $8.4 million compared to $7.4 million for the prior year.

The record date for attendance at the 2014 Annual General Meeting is October 27, 2014. The 2014 Annual General Meeting will be held at 4:00pm on November 21, 2014. Notice of the AGM as well as proxy forms will be mailed to shareholders by the end of next week.

Bermuda Stock Exchange has been provided with an electronic copy of the Annual Report, which is available for viewing at their office or on The Annual Report will be sent to shareholders in the mail by November 7. There was a delay in going to print due to Hurricane Gonzalo.

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