Ratio Magazine :: The Inside Track to East Africa’s Economies - Kenya: Press Releases: AccessKenya Group Records KES109m After-Tax Profit for 2011

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Kenya: Press Releases: AccessKenya Group Records KES109m After-Tax Profit for 2011

Monday, 19 March 2012

Nairobi, 14 March 2012 --- Leading Corporate Data and Internet Solutions Provider AccessKenya Group Wednesday announced a KES109m after tax profit for the 2011 financial year, a clear turnaround from the KES8m loss reported in 2010.

Company Chief Executive Officer (CEO) Jonathan Somen attributed the improved performance to significantly increased internet subscriptions and a highly robust network that has spurred customer growth owing to its reliability in the market.

Speaking while announcing the results, Mr. Somen said the company's key performance metrics improved in 2011 as compared to 2010, further noting that the company remained focused on service delivery while controlling costs. "Our corporate leased lines grew from 3,900 to 4,700 compared to the same period in 2010. This is an indication that we remained steadfast in our core business, corporate data and Internet solutions. More and more customers have realised that we have the best network and are signing up for service," he said.

Mr. Somen said that the company was also reaping the benefits of restructuring bandwidth costs, in particular the migration of customers onto its world class metro fibre network. "Our total revenues increased by 2% last year despite the continued fall in Average Revenue per User experienced across the industry. Due to the migration onto our own networks, we have seen our gross margins rise to 79% up from 67% in 2010," he said.

AccessKenya Chief Finance Officer Mr. Peter Ndirangu said the company's Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) margin rose to 35% up from 22% in the same period in 2010. "Our EBITDA amount has increased by 58% to KESs594m in 2011 from 375m in 2010.The gearing ratio also improved to 79% in 2011 from 83% in 2010," said Mr. Ndirangu. "Effectively this means that we are de-risking our business,” the CFO said. He further noted that the EBITDA interest coverage ratio improved to 4.71 times in 2011 from 4.09 times in 2010. "We have seen an improvement in position on our net current liabilities which reduced to KESs175m in 2011 from KESs322m in 2010,” explained Mr. Ndirangu.

The results come as AccessKenya continues to tighten grip of the corporate data market whose penetration, the company believes, is still low at slightly over 25%. AccessKenya CEO Mr. Jonathan Somen maintains there are good prospects ahead for the company judging from the continued improvement in revenue especially with regard to internet subscriptions. "Internet revenue grew by 7% in the first half of 2011, from a 7% drop in the same period in 2010, and by 6% in the second half of 2011," he said, adding that the company is keen on differentiating its services to clients by giving them added value.

Mr. Somen exuded confidence in the company's performance saying the company has invested wisely in versatile infrastructure that will continue to form the backbone of its scalable services to the increasing number of customers. He also dispelled claims that the mobile service providers are eating into the company's market share quoting the positive results as a definitive picture of market realities.

"If you look at these results, you will agree that much as the internet usage on mobile phones has gone up, the demand for fixed internet connectivity continues to grow and this is our core business," he said. “We are pleased to deliver these improved financial results and to see that our projected EBITDA comfortably covers our interest payments, principal repayments on our bank loans and our continued capital expenditure programme.”

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