Celtel reports record profits

Celtel proportionate EBITDA increases 67% to US $252 million

Celtel International, a leading pan-African mobile communications group with over 5 million managed customers in 13 countries, reports strong growth for the year to 31 December 2004.

Financial highlights:

• Proportionate revenues increased 58% to US $714 million (2003:US $446 million)
• Proportionate EBITDA increased 67% to US $252 million (2003: US $150 million)
• Consolidated revenues increased by 62% to US $614 million (2003: US $380 million)
• Consolidated EBITDA increased 59% to US $200 million (2003: US $126 million)
• Profit before taxes and minority interests was up by 97% to US $186 million (2003: US $95 million)
• Net profit doubled to US $147 million (2003: US $73 million)

Operational Highlights:

• Total managed mobile customers more than doubled to 5.2 million (2003: 2.5 million)
• Proportionate mobile customers increased by 118% to 3.6 million (2003:1.7 million)
• Average revenue per user per month was US $21 for the year (2003: US $25)
• Capex increased by 140% to US $253 million (2003: US $105 million)
• Kenyan operation acquired in May fully integrated and added 1.2 million customers
• Brand re-launched in 12 out of 13 markets

Marten Pieters, Celtel's Chief Executive Officer, commented:

“We are the market leader in 10 of the 13 the countries in which we operate and are seeing the returns from our substantial 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 US $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.”

Financial information presented is derived from the audited consolidated 2004 financial statements prepared in accordance with international financial reporting standards (IFRS).
Proportionate financial information reflects Celtel's share of the revenues and expenses of both its controlled subsidiaries and its associate companies on a line-by-line basis. Proportionate financial information does not comply with IFRS but provides relevant insight into Celtel's operations.
Total managed customer figures include 100% of all operations managed by Celtel International. ARPU is the average revenue per user and has been calculated on the basis of monthly averages for the year indicated for the Group's managed customers.

Year end results for the year ended 31 December 2004

Group Key Performance Indicators
	FY04	FY03	FY04 vs FY03
Total managed mobile customers (millions)	5.2	2.5	108%
Proportionate mobile customers (millions)	3.6	1.7	118%
Average revenue per user per month (US$)	21	25	-16%
Average churn per month (%)*	3	3	N.A

* Churn equals monthly deactivations divided by the local number of customers at the end of the previous month

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Customer numbers grew very strongly due to increased market penetration and the acquisition in Kenya.

ARPU was lower by 16% at US $21 per month (2003: US $25) as the Group continued to increase its market penetration and as a result of the acquisition in Kenya.

Financial Results

The Group's performance is shown below on both a proportionate and consolidated basis.

Proportionate Statement of Income
US $ million	FY04	FY03	FY04 vs FY03
Revenue	714	446	58%
OPEX	462	296	54%
EBITDA	252	150	67%
EBITDA%	35.5	33.6	-

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Consolidated P&L
Consolidated P&L US $ million	FY04	FY03	FY04 vs FY03
Revenue	614	380	62%
Operational expenditures	414	254	63%
EBITDA	200	126	59%
EBITDA %	32.6	33.3	-
Profit before tax and minority interests	186	95	96%
Net profit	147	73	101%

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The Group performed strongly with revenues up by 62% to US $614 million on a consolidated basis. This increase was largely due 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 US $20 million, which was fully expensed, OPEX increased by 55%.

EBITDA increased by 59% to US $200 million (2003: US $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 US $48 million (2003: US $26 million). The increase was mainly due to the costs of refinancing.

The Group realised a profit of US $69 million (2003: US $24 million) from the disposal of non-core operations.

Profit before tax and minority interests increased by 96% to US $186 million (2003: US $95 million).

The effective tax rate was 17% (2003: 14%) reflecting local tax holidays and non-taxable income.

Net profit doubled to US $147 million compared with US $ 73 million in 2003. Excluding the profit on sale of investments in both years, net profit grew 59% to US $78.6 million (2003: US $49.5 million).

Consolidated statement of Cash Flows
US $ million	FY04	FY03
Operating activities	152	98
Investing activities	(353)	(74)
Free cash flow before financing activities	(199)	24
Financing activities	133	89
Net (decrease)/increase in cash and cash equivalents	(69)	113
Cash and cash equivalents as of 31 December	64	132

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The Group's operations generated substantial amounts of cash before CAPEX on tangible assets. Celtel raised cash from the disposals of non-core businesses and also sourced additional equity and debt funding from the international capital markets.

Group operations generated US $152 million in cash, an increase of 55% compared to 2003. In 2004,US $253 million was spent on infrastructure investment and other CAPEX programmes during the year.

In May Celtel invested US$250 million in Kenya to acquire the majority stake (60%) in KenCell Communications and its shareholder debt and to develop the business.

Celtel raised more than US $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 US $74 million in the Kenyan debt markets.

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

Strategy

The Group aims to be the most successful pan-African telecommunications company, offering high quality services with modern telecommunications systems and excellent customer care throughout its operations. It seeks to expand its network and customer base within its existing countries of operation and to continue to examine acquisition opportunities while controlling its costs.

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.

Operations

Celtel operates in Burkina Faso, Chad, Democratic Republic of Congo (DRC), Gabon, Kenya, Malawi, Niger, the Republic of Congo, Sierra Leone, Tanzania, Uganda and Zambia. Celtel is a major shareholder in Mobitel, currently Sudan's sole mobile network operator. It also manages the major fixed line operation in Tanzania. Link Africa is a wholly owned subsidiary providing international carrier 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.

Forward-looking Statements
Certain statements in the press release constitute “forward-looking statements”. All statements other than statements of historical facts included in the press release, including, without limitation, the Group's financial position, business strategy, plans and objectives of management or future operations (including development plans and objectives relating to its products), are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the Group's actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Group's present and future business strategies and the environment in which it will operate in the future. Important factors that could cause the Group's actual results, performance or achievements to differ materially from those in the forward-looking statements include, but are not limited to, (i) the level of demand for the Group's services, particularly with regard to mobile communications services, (ii) the actions of the Group's competitors, (iii) regulatory developments, (iv) the success of its investments and capital expenditure programs; and (v) other risks. These forward-looking statements speak only as of their dates, and the Company expressly disclaims any obligation or undertaking to disseminate any update or revision to any forward-looking statement. This announcement does not constitute an offer or an invitation to purchase any securities in Celtel or any Group company.

Enquiries:
Celtel International
Martin de Koning, Corporate Communications Director,
Phone: +31 23 554 2671.