Holdings' three main operating subsidiaries, Bermuda Electric Light Company Limited (BELCO), Bermuda Gas & Utility Company, and BELCO Energy Services Company (BESCO), all returned record earnings. Excluding the losses incurred on the Group's investment in, and involvement with, Quantum, the contribution by these subsidiaries was $19,567,927, representing an increase of 7.5 percent over 1998.
However, losses incurred during 1999 on the Quantum investment totalled $3.5 million, thereby reducing Holdings' overall earnings to $15,759,552, down from the $17,644,809 earned in 1998. Discussions are still ongoing with three different groups with regards to the purchase of Quantum.
BELCO continues to have a solid performance with earnings rising to $18,170,950 from $17,041,146. Increased kilowatt hours sales, up 2.2 percent from 1998, allowed BELCO to avoid a rate increase in 1999, and based on kWh sales projections for 2000, the Company has decided not to increase rates this year. Expenses rose by the rate of inflation, but individual departments contained costs with the largest increases being in fuel and depreciation.
Bermuda Gas also experienced growth in all areas of its business during 1999, with net income up 19.6 percent over 1998. Both service and parts and appliance sales were up, and gas sales continued to increase, despite the closure of some of the Company's major customers.
The positive turnaround by BESCO in 1998 continued in 1999. BESCO's net income rose 22.4 percent as income earned from energy services rose, the support for surge protection equipment remained solid, and growth in the UPS business exceeded expectations.
Dividends paid per share increased to $1.40 from $1.30 during the year, reflecting the positive results achieved in 1998. The share price has declined, ending the year at $21, down from the $22 posted at the end of 1998. This has increased the yield on the Company's shares to 6.6 percent, up from 5.9 percent based on the price and dividend a year ago. Earnings per share declined to $3.45 from $3.87 in 1998, a direct result of the loss on the investment in Quantum.
"We are very pleased with the results achieved by the operating subsidiaries in the BELCO Holdings group in 1999,'' said President and CEO Mr. Garry A. Madeiros. "Despite the loss on our investment in Quantum, these results are consistent with the strong results we have achieved in recent years. They reflect the hard work, determination and loyalty of each and every one of the employees in the Holdings group. Obviously, we are very disappointed in the outcome of our investment in Quantum. We anticipated it would be an important part of our diversified operations. However due to regulatory issues, legal battles, industry changes and technological advances we were never able to generate the business required to support the investment."
The Annual General Meeting of BELCO Holdings Limited will be held on April 27 at 2 p.m. at Bermuda Electric Light Company Limited headquarters on Serpentine Road. All shareholders are invited to attend.