Nairobi — Celtel Kenya has announced it had posted an after tax profit of Sh1.3 billion for the year ended December 31, 2005.

This was the first time the mobile operator has made a profit after entering the market six year ago. The profitability, which represented an increase a 175 per cent over the same period the previous year, was helped by strong sales and significant improvement in efficiency following the firm's reorganisation.

In the previous financial year, the company had posted a loss after taxation of Sh1.8 billion.

"We have been able to turn around this business within 18 months by listening to our customers and efficiently responding to their needs," said Gerhard May, the company's chief executive officer at a media briefing held at a Nairobi hotel.

"We actually got more revenue using the same level of resources as the previous year." May said the re-branding of the company that followed the transformation from Kencell to Celtel had contributed positively to the company's earnings.

Growth in customer base

May said total revenue for the period was Sh10.7 billion, up from Sh9.5 billion recorded in the previous year, aided by sharp increase of its customer base that went up by 52 per cent.

May attributed the growth in customer base to the increased investment in network infrastructure coupled with the introduction of new products in the market.

"The results are empirical proof that investments made over the year have began to pay dividends."

The results also benefited from a strong shilling, which ensured that Celtel had to pay less for its offshore loans after foreign exchange conversions. This resulted in savings of Sh2.5 billion of its financing costs as the mobile operator paid Sh260 million down from Sh2.7 billion it paid last year.

In the period under review, the company's costs went up marginally from Sh8.63 billion to Sh8.61 billion.

May observed that the company is set to maintain the growth momentum in the current financial period.

Celtel, the CEO observed, would step up efforts to integrate its three East Africa networks that include Tanzania and Uganda into "one seamless network."