"We are quite satisfied with this performance, as our expectation for this period was, in fact, much lower compared to last year, even though our full-year results are anticipated to be similar to 2001," said Garry A. Madeiros, President and Chief Executive Officer.
While in line with budget, operating results were $1,313,717 lower during the first six months of 2002 compared with the same period in 2001. However, this decrease was offset by the sale of the wholly owned subsidiary Fibre.com to Phoenix Trust, which resulted in a gain on sale of $1,216,406. Fibre.com is the company that owns the fibre telecommunications system in the City of Hamilton that was used by Quantum Limited.
Electric energy revenue, which represents the primary contributor to Holding's bottom line, decreased 4.72 percent from the previous year as a result of lower fuel adjustment revenue. Overall, operating expenses decreased 3.17 percent during the six month period, compared to the same period in 2001, also primarily as a result of lower fuel costs.
Kilowatt hour sales were up 2.51 percent, mainly due to greater demand in the commercial sector, as new buildings were becoming fully operational and new insurance-related businesses were establishing in Bermuda. Residential sales were down 2.03 percent due in large part to mild winter temperatures.
Other results showed net earnings from Bermuda Gas & Utility decreased 4.92 percent, as new training and performance management initiatives early in the year resulted in planned interruptions to work schedules. While total sales were down 5.56 percent compared to the same period last year, appliance sales were up 6.25 percent. Gas sales trailed 10.9 percent behind the same period in 2001 as a result of less demand for gas for winter heating.
Gross profits from BESCO were up 1.9 percent, while, as expected, operating expenses increased 21.55 percent over the same period last year. Typically during the first six months of the year, efforts focus on initiating and setting project schedules resulting in increased expenditure which is later offset by income realised through these projects in the third and fourth quarters.
Holdings' share price increased 26.26 percent from $24.75 at June 30, 2001 to $31.25 as at June 30, 2002. This capital appreciation in share price results in a dividend yield of 4.9 percent.
"We are pleased with the first six months of 2002, as our overall results were much better than expected and our operating results were in line with expectations. We were not quite sure what to expect in the first half of the year because of the aftermath of the terrorist attack on September 11," Mr. Madeiros said. He added, "In the second half of the year, both electricity and gas sales are expected to increase which will help us to at least match last year's results. Also, we will be working diligently on the initiatives set for the year, as we restructure the company into a process organisation fully focused on customers, both internal and external."
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