BELCO Holdings Limited Issues 1st Quarter Report

Hamilton, Bermuda: 30 March 2007 - BELCO Holdings Limited Issues 1st Quarter Report as follows:

March 30, 2007

Dear Shareholder,

The Board of Directors has declared a dividend of 20.25¢ per share for the first quarter of 2007. A cheque is enclosed for shareholders who have requested direct payment.  Those who have designated a deposit to their savings or current account have been given credit effective today.

As of March 21, the market price per share was $23.00.

The Annual General Meeting (AGM) of BELCO Holdings Limited will be held on Monday, May 7, 2007 at 3:30 p.m. at the Bermuda Underwater Exploration Institute.  The AGM will include an update presentation about the consultation taking place on many of the issues contained within BELCO's Electric System Discussion Document. This will be my final AGM as President & CEO since I am retiring at the end of 2007.  Please join me to help celebrate this momentous occasion, and allow me the opportunity to thank you for your support over the last 14 years as your CEO. A cocktail reception will follow the presentation. We look forward to seeing you at the AGM.  The Annual Report is being prepared and is scheduled to be mailed the week of April 23.

BELCO Holdings Limited ended 2006 with consolidated earnings from operations 5.86 percent ahead of the previous year at $21,618,657 compared to $20,421,118 in 2005.  These positive results are attributed to greater demand for electricity in all sectors and improved fuel efficiency resulting from a full year's performance of the two new engines installed in 2005. It was a difficult year for the operating results of Bermuda Gas.

The market price of BELCO Holdings Limited shares ended the year at $23.00 compared with the equivalent of $20.17 in 2005. Taking into account the 100 percent stock dividend paid on August 31, 2006, this represents a 14 percent increase in the market price of BELCO Holdings Limited shares.  Again, taking into account the 100 percent stock dividend, earnings per share from operations ended the 2006 year at $2.10, up 5.53 percent from the $1.99 earnings per share in 2005.

BELCO

Bermuda Electric Light Company Limited (BELCO) ended the year earning $20,659,192, compared to $19,164,725 from normal operations in 2005.  Led by a 4.67 percent increase in demand for electricity by the large commercial sector, overall electricity sales increased

2.39 percent. Residential sales were 0.85 higher than in 2005, primarily due to a 1.39 increase in new residential meters, indicative of an increase in the Island's housing stock.

BELCO's 2006 operating costs increased $15,251,453 or 10.66 percent to $158,341,950, largely affected by the increased price of fuel. Total fuel costs rose from $66,173,651 in 2005 to

$80,058,743 in 2006. The average cost of a barrel of fuel was 21.61 percent higher, increasing from $65.26 in 2005 to $79.36 in 2006. This resulted in $13,985,071 in additional fuel costs. The effect of higher fuel prices was somewhat offset by increased engine production efficiency which enabled BELCO to save approximately $2,252,383. Fuel efficiency increased from 678 per kilowatt hour (kWh) in 2005 to 702 per kWh in 2006, mainly attributed to the two new generator sets added to the East Power Station in 2005.

During 2006, BELCO invested $31,959,950 in Property, Plant and Equipment.  Approximately $10,835,200 of this total was spent on the new state-of-the-art, Phoenix switchboard facility which replaces the two switchboards destroyed by fire in July 2005. A further $2,378,644 was also used to enhance the underground transmission system from BELCO to the King Edward Memorial VII Hospital, and $1,661,800 was applied to reinforce the cable link between the Pender Road and Boaz Island substations.  Other significant capital projects in 2006 included a comprehensive engineering review of BELCO's fire prevention and protection systems, and improvements to the Oily Waste Water Treatment Plant.

Bermuda Gas  

Bermuda Gas, hampered by a transition in its retail and warehousing facilities, as well as staff shortages, ended the year with net earnings of $716,672, considerably below the $1,093,421 earned in 2005. Appliance sales in 2006 were 6.44 percent lower than 2005. Service and Parts sales were a slight 0.63 ahead of 2005, and gas sales closed the year ahead, 10.23 percent.  In July 2006, Bermuda Gas moved its showroom from The Stables building on Reid Street to the Boyle Building in the centre of the City of Hamilton and is now experiencing greater walk-in business.

Arbitration

Our negotiations with the Electricity Supply Trade Union (ESTU) for a new two-year collective agreement failed to reach a successful conclusion that the membership would approve. Eventually, it was agreed by both parties to go to binding arbitration and allow an independent and impartial three-member panel to adjudicate an appropriate position. Unfortunately, conflicts of interest arose in respect of panel nominees which could not be quickly resolved.   In order to move the process forward, we wrote to the ESTU's attorneys recommending that both sides agree to send the wage and benefits dispute to the Permanent Arbitration Tribunal (PAT). The ESTU did not take up the offer, but rather issued a 21-day strike notice which, based on our essential services status, allows the Minister of Labour and Immigration to intercede and place the dispute in the hands of PAT. We have been informed that this is the route which the Honourable Minister intends to take.  The route to PAT notwithstanding, the process has arrived at a place where it can proceed to a conclusion.  It is anticipated that the hearing will commence in the middle of April.   

Yours Sincerely,

Garry A. Madeiros

President & Chief Executive Officer