"Our six months results are both encouraging and disappointing. Encouraging because we have been able to produce reasonable results despite a very difficult operating environment. Disappointing because of the fact that we have not made more significant gains having added new business to our portfolio in the last year.
Revenue for the period decreased 3% to $10.7 million, whilst expenses were lowered 2.1%. Operating income was slightly lower, dropping 1% to $1.6 million whilst net income and earnings per share reduced by 5% to $1.5 million and $1.42, respectively.
Our biggest challenge continues to be in our aviation business where continuing declines in actual flights are having an adverse effect on the divisions of Aircraft Services Bermuda Ltd. Additionally, new security restrictions are also affecting freight volumes in this area. Declining passenger numbers and further reductions in meal uplift are having a similar effect on Bermuda Aviation Services Ltd., as revenues in these divisions are down 19% or $1.4 million.
Weir Enterprises Ltd. has performed exceptionally well in the first six months of the year, and has more that met our expectations in terms of revenue generated and income realized. D. E. Mortimer & Co. Ltd., which has always generated reasonable profits, continues to improve its performance and is showing a 6% improvement over the same period a year ago. And, despite fierce competition and a slowing economy, Crow Lane Bakery Ltd..'s performance is also well ahead of last year.
The last six months of our fiscal year are traditionally more difficult. However this year we do expect to improve on the results before you as we go into that period. With flight schedules being reduced because of the general state of aviation, we do expect revenue in our aviation related companies to decline further. Several carriers serving Bermuda have indicated that they intend to cut capacity and except for US Airways, who for the first time in recent memory will have only one daily flight into Bermuda, the remaining schedules for Bermuda are yet to be determined.
We are all aware of the challenges in tourism and the effect it has on the local economy. BAS has experienced these challenges, met them head on, and overcome them to produce these excellent results. This shows not only the resilience of our management, but also the underlying strength of you company."
W. Neville Conyers
Chairman