Corporate data and internet solutions provider, AccessKenya, has announced a Kshs 109 million (about $ 1.3 million) after tax profit for the 2011 financial year, a clear turnaround from the Kshs 8 million ($96,386) loss reported in 2010.
The firm’s chief executive Jonathan Somen attributed the improved performance to significantly increased internet subscriptions and a highly robust network that has spurred customer growth owing to its reliability in the market.
“Our corporate leased lines grew from 3,900 to 4,700 compared to the same period in 2010. This is an indication that we remained steadfast in our core business – corporate data and Internet solutions. More and more customers have realized that we have the best network and are signing up for service,” said Somen.
He said that Access Kenya was also reaping from the benefits of restructuring bandwidth costs, in particular the migration of customers onto its metro fibre network.
“Our total revenues increased by 2 per cent last year despite the continued fall in Average Revenue per User (ARPU) experienced across the industry. Due to the migration onto our own networks, we have seen our gross margins rise to 79 per cent up from 67 per cent in 2010,” he said.
The firm’s Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) margin rose to 35 per cent up from 22 per cent in the same period in 2010. The EBITDA increased by 58 per cent to Kshs 594 million ($ 7.2 million) in 2011 from Kshs 375 million ($ 4.5 million) in 2010.The gearing ratio also improved to 79 per cent in 2011 from 83 per cent.
The results come at a time when Access Kenya is continuing to tighten its grip on the corporate data market whose penetration, the company believes, is still low at slightly over 25 per cent.
The firm’s internet revenue grew by 7 per cent in the first half of 2011 – from a 7 per cent drop in the same period in 2010 – and 6 per cent in the second half of 2011,” said Somen.