Bermuda First Investment Company Limited - Quarterly Results Announcement (Excerpt)

Hamilton, Bermuda – 03 June, 2013 – Bermuda First Investment Company Limited (the "Company" or "BFIC"; Ticker: BFIC.BH), an investment holding company with a number of significant investments in BSX Bermuda listed companies, is pleased to announce its results for the period ended March 31, 2013.

Highlights for the period ended March 31, 2013:

•       Successful listing of common shares and loan notes on the BSX on October 29, 2012;

•       Only BSX listed investment company which is focused solely on investing in BSX listed Bermuda companies;

•       Revenue of $1.3 million;

•       Market value of listed investments approximately $32.1 million;

•       Post period end issue of unlisted warrants to shareholders on a one for three basis with an exercise price of $10.00 per share, to provide the Company with funds to be used to make future investments; and

•       Payment of an interim dividend to shareholders of $0.20 per share.

Commenting on the financial results, J. Michael Collier, Chairman of BFIC said:

“BFIC continues to build strategic investments in BSX listed local companies and it is pleasing to see key holdings such as KeyTech aiming to grow shareholder value through acquisition opportunities. Whilst Bermuda remains economically challenging we continue to see value in BSX listed Bermuda companies. As a result the Board has agreed to issue warrants on a one for three basis to shareholders on the register as of 10 June 2013. This will provide the Company with additional funds to continue to make strategic investments. “

Financial summary

For the period ended March 31, 2012, the Company recorded a profit of $0.7 million (before the unrealized loss on investments) on income of $1.3 million. Total expenses were $0.6 million with $0.4 million relating to accrued interest expense on the Company’s unsecured 2019 loan notes. In addition there were one-off expenses totaling $0.1 million relating to the listing of the Company’s shares and loan notes on the BSX in October 2012.

The Company’s unrealised loss on its investments for the period was $2.7 million. The unrealized loss at the period end was primarily the result of the bid price in KeyTech Limited decreasing to $5.25 just prior to the period end. The current bid price has rebounded significantly and is currently $5.75. The Company is required under International Financial Reporting Standards (“IFRS”) to value its investments based on the bid price quoted on the BSX. The Company’s investments were acquired on an average trading price and the majority of the unrealised loss relates to the accounting treatment required under IFRS.

The Company has total assets as at March 31, 2012 of approximately $32.7 million and shareholders’ funds of approximately $15.1 million. The Company’s major liability is the $17.1 million unsecured loan notes that it issued to its founder shareholders in October 2012.

Dividend Reinvestment Plan (“DRP”)

The Company’s Board approved on June 3, 2013 the adoption of a DRP for BFIC. Shareholders will be able to elect to receive shares in lieu of cash dividends. This will enable shareholders to benefit from increased ownership in the Company and the Company will be able to use the cash to make further investments thereby increasing the Company’s value for all shareholders.

The detailed DRP is available on the Company’s website at www.bfic.bm.

Interim Dividend

The Company’s Board is recommending an interim dividend payment of $0.20 a share. The record date for the dividend will be June 21, 2013 and the payment date will be July 12, 2013.

Amendment to the Company’s 5% unsecured loan notes due 2019 (the “Loan Notes”)

On June 3, 2013, the Company’s Board and its loan note holders approved an amendment to the loan note agreement dated 9 October 2012 (the “Loan Note Agreement”) such that at the election of the holders of the Loan Notes, the payment of interest due on the Loan Notes can be satisfied by the issuance of further, fully paid, Loan Notes up to the total aggregate amount of Loan Notes available. The Board and its loan note holders also approved amending the interest rate on the loan notes to 6% from 5%, with effect from 1 July 2013. The Board believes that this revised interest rate is aligned with the type of investments that the Company holds.

Change of year end

On June 3, 2013, the Company’s Board and its loan note holders approved the change of the Company’s year end to 30 June from 31 December. The reason for the change is that the Company’s major shareholder, Utilico Investments Limited (“Utilico”), has a 30 June year end and as Utilico is interested in greater than 50% of the Company’s shares it is required to consolidate BFIC’s results in its financial results. By having co-terminus year ends it will reduce the audit costs for both the Company and Utilico.

Investments

The Company’s major investments are in KeyTech Limited (“KeyTech”) and The Ascendant Group Limited (“Ascendant”). In addition BFIC has investments in a number of other BSX listed Bermuda companies.

KeyTech

As at March 31, 2013, BFIC was interested in approximately 23% of KeyTech’s issued share capital which was valued at approximately $17.4 million. Over the period, KeyTech’s share price ranged between $5.06 and $5.80.

KeyTech announced during the period that it had received regulatory approval for its acquisition of TeleCayman, which had been previously announced in February 2013.

Post the period end, on 26 April 2013, KeyTech announced that its subsidiary, Logic Communications Ltd, had amalgamated with North Rock Communications Ltd. The amalgamated entity will be a wholly owned subsidiary of KeyTech. The new entity should be well positioned to take advantage of synergies in order to provide new products and a better service. On 30 April 2013, the Bermuda Regulatory Authority announced that as a result of not being made aware of the proposed amalgamation, they were issuing an emergency determination order such that the status quo would be maintained until documentation was provided for the Regulatory Authority to determine whether the competitive position in Bermuda had been affected.

Over the last few years KeyTech have invested a significant amount into the telecommunications infrastructure in Bermuda for the benefit of all consumers in Bermuda which has enabled Bermuda to meet the challenging demands of the modern day customer. As the largest shareholder in KeyTech we await the Regulatory Authority’s decision with interest. We believe that the proposed amalgamation would add significant value to KeyTech moving forward.

Ascendant

As at March 31, 2013, BFIC was interested in approximately 10% of Ascendant’s issued share capital which was valued at approximately $12.0 million.

Ascendant announced its financial results for the year ended 31 December 2012 on 9 May 2013. Its consolidated earnings for 2012 increased marginally to $11.5 million from $11.1 million in 2011. 2012 saw improved results for both Bermuda Gas and PureENERGY. BELCO’S earnings decreased by $1.4 million and new investments in iFM Limited and Air Care Limited contributed approximately $820k in net earnings.

Ascendant reiterated that the primary cause continuing to affect its business was the Bermuda economy. BELCO’s net income fell $1.4 to $13.2 million which follows a decrease of $1.5 million from 2010 to 2011. Sales of electricity net of the fuel adjustment for 2012 totaled $145.4 million, a decrease of $5.4 million compared to 2011. Bermuda Gas’ net earnings increased to $1.4 million form $1.0 million in 2011. The Company’s cash flow was used primarily to fund CAPEX, the acquisition of Air Care and the payment of the dividend. Ascendant maintained its annual dividend of $0.85 per share giving a yield of 7.2%.

Ascendant’s management is taking steps to manage costs and diversify its earnings. In addition they are evaluating BELCO’s long term strategy to determine whether generating electricity by fuel is the optimum way

forward for the Company and its customer. Ascendant’s CEO has recently discussed the adoption of LNG which may improve efficiency, reduce customer bills but would require significant CAPEX.

We believe that Ascendant should be evaluating alternative means of generating electricity in Bermuda. However, any decision to move away from fuel must only be done once it is clear on how any change would be funded whilst also providing clarity on its future earnings. We would also hope to see the Bermuda Government actively involved in any potential change.

Ascendant’s share price ranged between $11.45 and $12.05 during the period. This is a significant discount to its book price as at December 31, 2012 of $31.08.

Argus Group Holdings Limited (“Argus”)

As at March 31, 2013, BFIC was interested in approximately 2.3% of Ascendant’s issued share capital which was valued at approximately $1.7 million. Argus’ share price has ranged between $3.5 and $3.7.

As at the date of this announcement Argus has not announced its results for the year ended March 31, 2013. We believe the results will be released shortly and we look forward to the full year continuing the positive theme form the interim results. We believe that Argus is now entering a period of more normalized earnings and that it will be looking to pay a dividend once the capital position has strengthened which we believe will be in the next 12 months.

Other investments

The Company’s other investments include small holdings in The Bank of N.T Butterfield & Son Ltd (“Butterfield”), Bermuda Press Holdings Limited, Bermuda Aviation Services Limited, Watlington Waterworks Limited and in the quarter ended March 31, 2013 the Company acquired a small holding in West Hamilton Holdings.

Butterfield has continued to expand its common share buyback programme which is providing support to the share price and is likely to continue to do so in the short to medium term. Its earnings continue to move in the right direction and in the first quarter of 2013 it paid an interim dividend of $.1 per share.

The earnings reported by the Company’s other investments appear to have stabilized compared to the recent years. However, it is apparent that the Bermuda economy still remains weak and that any upturn is unlikely to appear for a number of years.

Media Contacts:

Mr. Alasdair Younie

Director

Bermuda First Investment Company Limited

Tel: 441-299-2897

Email: ay@icm.bm