Telecommunications firm the KeyTech Group reported that earnings fell more than 30 percent in its last fiscal year as expenses related to acquisitions took their toll.

KeyTech, which owns Logic Communications, made net income of $5.7 million for the year ended March 31, 2014, compared to $8.3 million the prior year.

The company revealed in its earnings statement that it paid out $26.8 million to acquire North Rock Communications, which has since merged with fellow internet service provider Logic.

The acquisition was responsible for most of the $44.8 million of capital expenditure by KeyTech during the year, while the remainder was used to expand infrastructure to increase DSL speeds at BTC and the continuation of the fibre build and IPTV rollout in the Cayman Islands.

Since the end of the fiscal year, KeyTech has sold BTC to Barrie Holdings for $30 million.

Operating revenues for the year were $81.1 million compared to $74 million for the prior year, an increase of $7.1 million.

Data revenues increased $5.5 million as a result of the North Rock acquisition, while voice revenues declined $0.3 million.

Total operating expenses increased $9.8 million. KeyTech said this was largely due to the company’s acquisition and growth strategy.

Salaries and employee benefit expenses increased $1 million because of the additional staff required to support Logic Bermuda following the amalgamation. One-time redundancy costs in Bermuda and Cayman were $0.9 million, an increase of $0.3 million over the prior year.

“Notwithstanding the economic growth challenges in Bermuda and Cayman, the last 12 months have been successful in terms of strategic positioning for the company,” said KeyTech CEO Lloyd Fray.

“In Bermuda, KeyTech maintained its market share in spite of intense price competition in the telecommunications market. We focused on managing expenses across our subsidiaries as well as through the efficiencies and cost savings as a result of Logic’s amalgamation with North Rock and the acquisition of TeleCayman.

“The company’s growth strategy is geared toward owning data-access infrastructures that can meet the demands of future capacity requirements, diversifying earnings across two jurisdictions and enhancing shareholder value.”

Total cash dividends paid to common shareholders for the current and prior year was 48 cents per share.

Investment income was $129,158 as compared to $163,434 for the prior year.

KeyTech said its 2014 annual meeting will be held at 4pm on November 21, 2014.