Celtel International Fiscal Year Net Profit $147 Million Vs $73 Million

LONDON -(Dow Jones)- Celtel International B.V., a pan-Afrian mobile communications group, said Friday that net profit more than doubled to $147 million for the year ended Dec. 31, compared with $73 million a year ago.

Chief Executive Marten Pieters said the group is seeing good returns from its investment across the sub-Saharan region.

"The Group is delivering strong organic growth in all our operations and we are now building on our unique position in East Africa as the only operator in each of Kenya, Tanzania and Uganda.

"We invested more than $250 million in infrastructure in Africa in 2004, an increase of 140% compared to the previous year.

"Our focus is to continue to invest in our pan-African business and premier brand at a time of rapid growth for mobile telephony on the continent," Pieters said.

Celtel said revenues were up by 62% to U.S. $614 million on a consolidated basis, due to to strong organic growth of the customer base and the major acquisition in Kenya. Excluding the Kenyan operation, the Group grew its revenues by 42% and customers by 60%.

"Operational expenditures (OPEX) increased by 63%, which is slightly more than the increase in Revenue, partly due to the cost of re-launching the Group's brand at the beginning of 2004. Excluding this additional marketing and re-branding costs of approximately U.S. $20 million, which was fully expensed, OPEX increased by 55%.

"EBITDA increased by 59% to U.S. $200 million (2003: U.S. $126 million) as a result of strong growth in revenues and cost controls despite the Group's investment in the Celtel brand.

"EBITDA margin declined slightly from 33.3% to 32.6% mainly due to the additional marketing and re-branding costs. Without this charge, the margin would have increased to 35.8%.

"The Group had net finance costs of U.S. $48 million (2003: U.S. $26 million). The increase was mainly due to the costs of refinancing.

"Celtel raised more than U.S. $100 million from shareholders in relation to the acquisition in Kenya.

"The Group also raised funds by profitably selling minority stakes in China Resources Peoples Telephone in Hong Kong, Vodafone Egypt, and Sudatel in Sudan.

"Celtel continued to use local capital markets to support its operations where appropriate. In November, Celtel Kenya, previously known as Kencell International, refinanced some U.S. $74 million in the Kenyan debt markets.

"In December 2004 Celtel completed a U.S. $190 million syndicated loan facility for the parent company, of which U.S. $117 million was refinancing and the remainder for business expansion.

"Sub Sahara Africa is currently the world's fastest growing region for mobile telecommunications. The Group intends to continue its programme of investments in licences and networks in Africa.

"As of December 2004, mobile penetration was less than 5% in 10 of the 13 countries in which Celtel operates. Therefore, the Group believes that there is significant opportunity for customer and revenue growth in sub-Saharan Africa.

"The Group aims to position Celtel as a pan-African brand known for quality of service, network coverage and customer care. Through a strong brand with a pan-African reach, Celtel aims to increase customer loyalty, expand its customer base and offer differentiated services.

"The demand for quality mobile telecommunications services in Africa is reflected in the strong organic growth of the Group's customer base. During the last quarter of 2004 Celtel was signing up on average 50,000 new customers per week, with significant numbers in particular coming from the Democratic Republic of Congo and Kenya.

"The re-launch of the Celtel brand started in January 2004. It followed substantial research on consumer attitudes across Africa to identify brand attributes to which consumers can better relate and which better reflect the Group's pan-African communications services. Celtel is focused on embracing the multicultural diversity of Africa, both in urban and rural environments. The Group's brand promise is "MAKING LIFE BETTER". The Celtel brand has been introduced in 12 of the 13 countries as well as at the Group level.

"The acquisition in Kenya in May extended Celtel's reach into one of Africa's fastest growing markets, significantly increased the number of customers and gives the Group the unique advantage of being the only operator present in each of the three East African countries.

"During the year, the Group has also introduced a number of new services in select markets. Celtel launched pre-paid roaming between the DRC and the Republic of Congo. In addition to purchasing additional airtime in their home country, Celtel's pre-paid customers can now purchase additional airtime in either country. Another new service offering was "me2u" programme which allows pre-paid customers to transfer unused airtime to other Celtel customers."

(END) Dow Jones Newswires"

Posted to the site on 4th March 2005