2010 Ascendant Net Earnings:$16.7 Million
The Ascendant Group Limited, parent company of BELCO, Bermuda Gas & Utility Company Limited, PureNERGY Renewables, Ltd.,BELCO Properties Limited, InVenture Limited and Sigma Corporate Services Company Limited, today released the Audited Fiscal Year report to 31 December, 2010.
Ascendant Group Limited reported that consolidated net earnings for 2010 were $16.69 million, down from $19.51 million in 2009 and that, consequently, earnings per share decreased 14.9% to $1.60 from $1.88 in 2009. The 2010 cash dividend of $0.85 per share was unchanged from 2009. The 2010 dividend yield, based on the year-end stock price of $14.95, was 5.69% compared to 5.64% in 2009, based on the 2009 year-end price of $15.05 per share.
Bermuda Gas
Bermuda Gas recorded improved results of $1.32 million for 2010, versus $1.27 million for 2009; an increase of 3.9%. An additional 9,512 pounds of propane, primarily in the residential market, were sold in 2010 as compared to 2009. Also, appliance sales increased 15.2%, more than offsetting service sales results for the year, which decreased 7.3% when compared to 2009.
BELCO
BELCO’s earnings fell approximately $2.95 million to $16.71 million versus $19.66 million achieved in 2009. Sales of electricity, net of fuel adjustment income, increased $3.29 million in 2010 to $153.97 million, up from the $150.68 million in 2009. Sales in the Commercial sector were down 1.9%, or 6.2 million kilowatt hours (kWh), compared to an increase of 2.4% in 2009; the direct result of contraction in the local economy. Residential kWh sales increased 1.9% in 2010, following a 2009 increase of 1.2%. BELCO’s 2010 results were also negatively affected by Hurricane Igor, which passed over the Island on 19 September, leaving approximately 29,000 customers without power. Although power to all customers was restored within a week, the financial effect to BELCO was approximately $1.2 million through lost sales and restoration costs.
BELCO’s Energy Supply expenses were also affected by several one-off events. In August 2010, gas turbine engine GT5 experienced internal damage and was removed from service. The Company incurred $0.75 million in 2010 in respect of this incident, representing the net deductible for the claim under the existing insurance policy. The claim will be formally made when costs are finalised, based on quoted repair costs net of likely insurance recovery. A total $1.12 million in costs was also incurred for repairs and maintenance on major engine machine parts, and to extend the useful life of existing engines to meet future demand, as the Company continues to seek Government approval to build new plant to replace aging plant.
Fuel costs are the most significant of BELCO’s Energy Supply expenses. This year, total fuel costs were $107.35 million versus $108.84 million in 2009. This decrease is due to a combination of improved efficiency and decreased generation volume related to lower kWh demand more than offsetting increased fuel costs and increased kWh’s purchased from Tynes Bay. Fuel adjustment revenue decreased $0.77 million to $75.60 million in 2010, from $76.37 million in 2009, attributed to improved efficiency in 2010 despite a modest 1.0% increase in average fuel prices.
BELCO invested $29.52 million in capital projects in 2010, compared to $36.81 million in 2009. Energy Supply capital expenditures in 2010 totalled $10.44 million (2009: $15.80 million). Energy Delivery capital expenditures in 2010 totalled $12.08 million, down from $14.25 million in 2009. Also, a total of $4.06 million (2009: $4.16 million) was spent addressing customer-initiated projects requiring new or amended supply services. As part of the redevelopment of the King Edward VII Memorial Hospital, the Company spent $2.10 million relocating the Hospital substation.
PureNERGY
In an effort to set the example and gain hands-on experience, installation has begun at BELCO headquarters of a solar water heating and photovoltaic system purchased from affiliate company PureNERGY. PureNERGY posted a net loss of $0.41 million for 2010.
Although an improvement over 2009’s net loss of $1.10 million, this is below expectations and, consequently, management is reviewing its options with respect to this entity. PureNERGY continues to feel the impact of economic downturn, an increase in the number of competitors entering a slow-to-develop renewable energy market, as well as an uncertain policy, legislative, regulatory and financing framework for alternative energy products and services.
BELCO Properties
BELCO Properties’ earnings fell $77,895 to $177,876 versus $255,771 in 2009; due to the loss of one of the Company’s tenants during the year. InVenture, which was incorporated last year as a vehicle for new business opportunities, remains in the development stage and posted a net loss of $72,035 for the year.
Sigma
Sigma, the newest member of the Ascendant Group incorporated in 2010 to provide corporate services for Ascendant Group companies, broke even.
