"The results for the first six months of 2001 show a marked improvement over these for the same period of the previous year, with net earnings increasing from $206037 to $432470. This reflected lower rainfall in the first six months of 2001 when actual rainfall equated with average whereas in 2000 actual exceeded average by a significant margin. The continuing substitution of higher margin activity referred to in the 2000 Directors Report, has also contributed to this improvement.
The infrastructure of the water production plant continued to be upgraded and in the period under review new replacement power trains for the Reverse Osmosis Plant were acquired and installed. These units are more efficient and reduced operating costs are already becoming evident. The policy of reviewing the status of the Company's assets continues and amortisation of Goodwill is currently under consideration with a view to determining whether amortisation rates adequately reflect present competitive conditions.
The demand for the company's products and services remained strong throughout the summer, but has now reduced significantly. The events of September 11th and the immediate curtailment of travel and tourism have resulted in an abrupt reduction in demand. The winter period with its reduced demand and lower level of activity traditionally commences in October or November, but it is clear that we have already entered this phase of economic activity and that the company's peak earning period has been significantly reduced. This will seriously affect results for the second half of the year and therefore for the year as a whole."