Bermuda First Investment Company Limited Financial Results for the nine months ended March 31, 2016

Hamilton, Bermuda: 28 June 2016 – In a filing with the Bermuda Stock Exchange (“BSX”), Bermuda First Investment Company Limited. (the “Company” or “BFIC”; Ticker: BFIC.BH) today announced the Company’s results for the nine months ended March 31, 2016.  The filing stated:

Bermuda First Investment Company Limited, a BSX listed investment holding company which owns a number of significant investments in BSX Bermuda listed companies, announces its results for the nine months ended March 31, 2016.

Highlights:

·         Revenue of $0.4 million;

·         Profit of $2.3 million (including unrealised profit of $3.3 million);

·         Market value of investments as at March 31, 2016, of approximately $26.9 million; and

·         Receipt of KeyTech special dividend of $3.5 million post quarter end.

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

“It is pleasing to see that post the year end, KeyTech’s proposed transaction was approved by the regulatory authorities and BFIC subsequently received the special dividend totaling approximately $3.5 million. The proceeds of which have been used to reduce debt.

The value of our assets remain significantly undervalued due to market conditions and subdued economic conditions. There are signs that the Bermuda economy is growing and with a number of new infrastructure projects due to shortly commence, combined with the America’s Cup, we are cautiously optimistic that our investments will increase in value.”

Media Contacts:

Alasdair Younie                                                                 

Director                                                                          

Bermuda First Investment Company Limited                                    

Tel:  441-299-2897                                         

Email:  ay@icm.bm                                        

Financial summary

For the quarter ended March 31, 2016, the Company reported revenue of $0.4 million and an unrealised gains on its investments of approximately $0.9 million, (relating to the movement in the value of the Company’s investments between January 1, 2016 and March 31, 2016). Total expenses were $0.5 million with $0.3 million relating to accrued interest expense on the Company’s unsecured 2019 loan notes. The Company’s undiluted earnings per share for the quarter was $0.28.

For the nine months ended March 31, 2016, the Company reported revenue of $0.4 million and an unrealised profit on the Company’s investments of approximately $3.3 million.

As at March 31, 2016, the Company’s investments had a total value of $26.9 million. The Company had net debt of $6.6 million and unsecured long term seven year loan notes that it issued to its founder shareholders in October 2012 of $18.5 million.

Post the quarter end, the Company received a special dividend from KeyTech Limited totaling approximately $3.5 million. A portion of the proceeds of which were used to repay debt and the Company’s net debt is now approximately $4.5 million

Key Investments

KeyTech Limited (“KeyTech”)

KeyTech finally received regulatory approval for the transaction with ATN in April 2016 and the special dividend of $0.75 was paid shortly thereafter. KeyTech also announced that its CEO, Lloyd Fray, was stepping down to be replaced by Frank Amaral the current CEO of Cellone.

KeyTech now comprises Logic, Cellone, the Bermuda Yellow Pages and Logic Cayman. The group can now deliver mobile, fixed and international telecommunication services across Bermuda. The capital invested by ATN has enabled KeyTech to repay its subordinated loan notes and to accelerate investment in both Bermuda and Cayman.  We believe that KeyTech is now in a strong position to deliver on its growth ambitions.

Earnings for the year ended March 31, 2016, should be released shortly.

Ascendant Group Limited (“Ascendant”)

Post the quarter end, Ascendant made a number of important announcements. On April 13, 2016, Ascendant announced that it had agreed to sell Bermuda Gas to Rubis Energy Bermuda for a consideration of $17.7 million plus final closing working capital adjustments.

On May 4, 2016, Ascendant announced its results for the year ended December 31, 2016. Operating earnings were $14.5 million (2014: $7.3 million) with the increase driven by a $7.2 million improvement at BELCO reflecting higher sales, reduced windstorm expenses and a reduction in bad debt expense. Bermuda Gas earnings increased by $0.2 million and AG Holdings decreased by $0.98 million due to a loss of a contract at iFM. Consolidated net income was $17.4 million (2014: $17.6 million). Earnings per share remain unchanged at $1.63 and the company paid an annual dividend of $0.30 per share. BELCO’s sales volume increased by 2.3% due to stronger residential sales as a result of warmer temperatures compared with 2014. Sales to demand and commercial customers remained flat. The average price for a barrel of oil fell from $128.60 in 2014 to $101.06 in 2015. Total operating expenses decreased by $27.7 million.

On May 16, 2016, Ascendant announced that it was launching a share buyback programme to purchase up to 1.5 million shares (representing approximately 14.1% of the total outstanding shares). The sale of Bermuda Gas, and the lack of liquidity in the BSX, meant that the company felt it was appropriate to return some cash to shareholders.

Ascendant recently received the decision from the Energy Commission in request for an increase in BELCO’s tariff rates. The Energy Commission agreed that BELCO’s suitable return on capital should be 7% in 2016 and 8% in 2018. Ascendant has also been directed to file its IRP by  June 30, 2016. This will set out the plan for Bermuda’s energy future over the next 20 years and depending on the regulatory framework, will allow BELCO to plan its future investment.

It remains vitally important to the future success of BELCO, and indeed Bermuda’s energy infrastructure, that there is a clear and transparent regulatory framework, which will enable BELCO to earn a return on its assets. Without such a framework it will be difficult for BELCO to continue to invest in its assets to ensure that Bermuda has the world class and reliable energy infrastructure that it requires.

Argus Group Holdings Limited (“Argus”)

Argus announced their results for the year ended March 31, 2016 on June 27, 2016. They announced net earnings to shareholders of $7.3 million which included unrealised investment losses of $8.0 million. Underlying earnings from business operations were $15.3 million before unrealised investment losses. Shareholders’ equity increased to $122.6 million and an interim dividend of nine cents per share was declared. Whilst a small improvement from the first half of the year, the results were heavily impacted by Argus’s investment returns. Investment income reduced from $14.8 million in 2015 to $1.5 million due to unrealised losses of $8.0 million.

However, it was pleasing to see that on May 31, 2016, Argus announced the acquisition of Island Insurance Brokers in Malta, an insurance brokerage firm that provides professional insurance broking and risk management services to individuals and businesses in Malta. The transaction is subject to receipt of all regulatory approvals. Argus currently owns an insurance agency in Malta, Argus Insurance Agencies Limited, and as such, the transaction is aimed at reducing the company’s exposure to Bermuda.

Other investments

The Company’s other investments include small holdings in BF&M Limited, Bermuda Aviation Services Limited and Bermuda Press Holdings which are valued at approximately $0.1 million.

-Ends-

Bermuda First Investment Company Limited is a BSX listed Bermuda exempt investment holding company with significant investments in a number of BSX listed Bermuda companies. Its main investments are in KeyTech Limited and Ascendant Group Limited. The Company’s core strategy is to build strategic investments in local Bermudian companies. BFIC’s shares and loan notes are publicly traded and listed on the Bermuda Stock Exchange www.bsx.com (Tickers: BFIC.BH and BFICN.BH).