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KeyTech posts $2.4m loss after writedown

Telecommunications company KeyTech made a consolidated loss from operations of $2.4 million in its last fiscal year.

The company said the loss was primarily the result of a $4.3 million accounting writedown and one-time staff termination charges of $1.4 million in the year ended March 31, 2016.

Earnings before interest, depreciation, amortisation and one-time charges for the period was $22.5 million compared with $3.3 million in the prior year, an increase of $19.2 million. Consolidated revenue for the period was $89.3 million compared with $66.9 million in the prior year, an increase of $22.4 million.

KeyTech owns telecoms interests in Bermuda and the Cayman Islands, including Logic Communications, CellOne and Bermuda CableVision. KeyTech said that the revenue increase was driven by the acquisition of CableVision and BOTCAT, its Cayman television business.

US firm ATN International acquired a 51 per cent stake in KeyTech in a deal that was completed in May this year. A review of the carrying value of KeyTech's assets necessitated by the deal led to the $4.3 million writedown recorded in the 2015-16 results, but also a further impairment charge of $85.6 million in 2014-15, causing a restatement of that year's financial results.

Frank Amaral, KeyTech's chief executive officer, said: “From an operational standpoint, the ATN transaction brings together our Logic and CellOne businesses in Bermuda. It also strengthened our balance sheet and provided the financial foundation to continue investing in the business and improve the value proposition to the customer.

“By the end of the year we intend to launch a unified customer brand, thereby opening the door for competitive offers that will include next generation wireless, internet, home-phone and television services.

“To capitalise on the opportunities ahead, we are revamping our operations to better serve our residential and business clients. We are making substantial investments in fibre infrastructure and advanced capabilities throughout our networks in Bermuda and Cayman so that we can better serve homes and businesses.

“This transaction and subsequent restatement of financial results allows us to better reflect the value of the company and better recognise and measure the positive effects of the merger going forward.”

KeyTech said its operating loss of $1.1 million — adjusted for one-time charges — relates to increased operations and maintenance costs, depreciation and amortisation and government taxes, primarily due to consolidating an entire 12 months of results of Bermuda CableVision, compared to seven months of consolidation in the prior year.

KeyTech data revenues rose in Bermuda and Cayman organically and through acquisition. “Our bundled internet access and voice service has allowed the company to improve market share in addition to consumers purchasing higher bandwidth solutions,” the company stated.

Mr Amaral said KeyTech had been working on operational efficiencies and he expected these to show in the next earnings year.

KeyTech declared no dividends for the 2015/2016 year. There was a one-time dividend of 75 cents per share, as part of the ATN transaction that was declared and paid after the reporting period.

Earnings per share for continuing operations for 2015-2016 amounted to a loss of 15 cents per share compared with a loss of $6.54 in the same period last year.

Unified brand plans: Frank Amaral, the CEO of KeyTech

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Published October 19, 2016 at 6:39 pm (Updated October 19, 2016 at 9:15 pm)

KeyTech posts $2.4m loss after writedown

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