March 14, 2012 / 6:37 AM / 6 years ago

Corporate demand puts AccessKenya back into profit

* Corporate users jump 20.5 percent

* Shareholders to get a 1-for-20 bonus issue

NAIROBI, March 14 (Reuters) - AccessKenya moved back into profit last year, the internet service provider said on Wednesday, after connecting more corporate customers and cutting its costs.

It made a pretax profit of 130.9 million shillings ($1.6 million) last year after losing 5.4 million shillings in 2010, with corporate customers up by 20.5 percent in 2011 and the cost of sales down by just over a third at 357.5 million shillings.

“We increased our corporate leased line connections from 3,900 to 4,700 - ahead of predictions - and maintained our estimated market share at around 40 percent,” Managing Director Jonathan Somen said in a statement.

“During the year we took more business from all our main competitors than we lost to them.”

Revenue edged up 2 percent to 1.74 billion shillings, while financing costs rose to 126.5 million from 91.6 million in 2010. Its foreign exchange loss due to dollar-denominated debt went down to 36.5 million shillings from 43 million shillings

Access, which has the largest corporate internet connectivity market share in Kenya at about 40 percent, said its earnings per share also turned positive at 0.53 shillings.

It offered a bonus share issue of one for every 20 held, instead of a cash dividend, subject to shareholder and regulatory approval.

“In 2012 we will ... focus on driving corporate data sales and ensuring that our value added and IT sales grow strongly and complement the corporate data business,” the firm said in a statement.

Shares in Access are the second worst performing stocks on the Nairobi bourse, down 26.2 percent this year to hit an all-time low of 3.70 shillings on Feb. 22, due to concerns over stiff competition in the sector, spurred by telecom operators who have been stepping up their data businesses.

Its shares closed at 3.80 shillings on Tuesday.

Analysts said late last year that Access could be a take-over target due to its extensive fibre infrastructure, a big market share in the corporate Internet connectivity market as well as a manageable market capitalisation of about $9.6 million. ($1 = 82.4500 Kenyan shillings) (Reporting by Kevin Mwanza; Editing by Duncan Miriri and Greg Mahlich)

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