Repairing Bermuda's telephone lines following Hurricane Fabian cost over $2 million ? and the damaged cable, poles and lines were not insured, according to BTC's parent company, KeyTech.

KeyTech said in its six month report yesterday that the storm cost BTC $1,640,676 up to the end of September and KeyTech said this "significantly impacted" consolidated net income for this six-month period.

But the total for restoring service to the 16,000 homes that were left without telephone lines was $2,017,458, which includes repairs carried out after the end of September and the cost of the loss of service to its customers.

"It is important to note that the financial impact of Hurricane Fabian has been absorbed by BTC with no resulting increase in rates to our customers," said KeyTech chief executive officer Sheila Manderson a the release to shareholders issued yesterday.

"The revenue gains that BTC experienced during the earlier months of the fiscal year from the steady growth in ADSL (asymmetric digital subscriber line) revenues were offset by the high costs associated with restoration work of some 16,000 faults following Hurricane Fabian and the decrease in revenue experienced as a result of lost installation time," said the release.

It added after reporting the total loss of over $2 million for the storm: "Nevertheless, as significant as this impact was to the company, it is less costly than if the company had maintained catastrophic insurance coverage for such events."

KeyTech, which yesterday issued its results, 2003, saw its profits drop significantly from $5.7 million to $4.1 million, a fall of 28 percent ? which included a one-off gain a year earlier and the cost of Fabian.

KeyTech, which owns not only BTC, but BTC Mobility, Logic and 32 percent of CableVision, said the figures for its consolidated income did not show an accurate picture of the company's bottom line as last year's figure was given a boost by a $1.4 million one-off gain from CableVision settling an outstanding law suit, meaning the real drop per annum was actually six per cent.

The company, in its letter to shareholders released yesterday, argued that if you also took off the cost of storm damage the company would have made a gain on the year-ago figure.

"After adjusting for excess storm damage related to Hurricane Fabian and the one-off item in the prior year consolidated net income increased $1,382,595 or 31 percent, reflecting an overall improvement in operations with growth in the majority of our revenue sources and also in income from marketable securities," said the company.

Mrs. Manderson said in the release: "Overall the company has performed well during the first half of the financial year and in line with its strategic direction, notwithstanding the temporary setback caused by Hurricane Fabian. Excluding the impact of Fabian, the company performed ahead of plan financially. With the full excess storm damage expense for Fabian included in the six month period ended September 30, 2003 we currently expect earnings for the next six months to increase compared to the first six months of this fiscal year."

KeyTech's newest venture, the publication of the Bermuda Yellow Pages this year , brought in $2.8 million in revenues for the company. The directory was previously published by Island Press, the publisher of the Bermuda Sun.

Key Tech reported operating revenues for the period were $48,840,165 as compared to $44,393,946 for the same period last year, an increase of $4,446,219.

The company said that over half of this improved income was due to the Yellow Pages, while the improved performance of cellular, asymmetric digital subscriber line ("ADSL"), consulting and long distance voice services made up the rest.

Operating expenses increased $3,695,879, the majority of which is attributable to the costs of publishing the directory for the first time and the cost to Mobility of the operations of two networks, the GSM and TDMA networks.