Ascendant Group Reports 2012 Earnings

Ascendant Group Limited reported today [May 9] that its consolidated earnings for 2012 increased $410,094, or 3.7%, to $11.5 million from $11.1 million in 2011.

Ascendant Group is the parent company of BELCO, Bermuda Gas & Utility Company Limited and AG Holdings Limited. AG Holdings was established in October 2012 to manage all of Ascendant Group’s non-utility business operations which include Air Care Limited, iFM Limited, iEPC Limited, PureNERGY Renewables, Ltd., and Ascendant Properties Limited.

Significantly improved 2012 results in both Bermuda Gas and PureNERGY largely offset a $1.4 million decrease in BELCO’s earnings reported in the previous year. New investments in iFM Limited and Air Care Limited during 2012 contributed $820,059 to net earnings.

Walter M. Higgins Ascendant Group President & CEO said, “The primary factor affecting our business is the economy. As Bermuda’s economy has weakened, we have seen sales decline, including core electricity sales.

“It’s worth noting that for the first time in its 107-year history, BELCO has seen its customer base decrease to 35,770 in 2012 from 35,862 in 2011 due to the departure of non-Bermudians, Bermudians relocating to other countries, and commercial customers closing, reducing activities or moving operations to other jurisdictions.”

Mr. Higgins pointed out that the economic downturn has also had a negative impact on revenues from the sale of other goods and services that Ascendant Group’s operating companies provide. Also, because customers have competing priorities for reduced incomes, the company has seen a growing number unable to pay accounts in full and in a timely manner, resulting in Ascendant Group incurring additional costs for increased bad debt provisions.

BELCO’s net income fell $1.4 million to $13.2 million for the year, as compared to 2011 net income results of $14.6 million, which follows a decline of approximately $1.5 million from 2010 results of approximately $16 million. Sales of electricity net of fuel adjustment for 2012 totalled $145.4 million, a decrease of $5.4 million versus $150.8 million in 2011.

Bermuda Gas’ net earnings increased $444,356 to $1.4 million in 2012 from $969,104 in 2011 due to an improvement in margins, a reduction in operating costs and an increase in other income.

Mr. Higgins said, “We are taking positive steps to diversify Ascendant Group and to manage costs. For example, in 2012 we acquired a majority interest in Air Care, which provides Ascendant Group with an opportunity to enter new markets both locally and overseas and complements the services provided by our other operating companies. Ascendant Group uses a combination of earnings from across the group of companies, as well as investor funds and debt, to expand its service and product offerings beyond traditional electricity production and delivery.

“Diversification will allow us to combine energy services with infrastructure solutions that will improve energy efficiency and lower overall prices. Ascendant Group believes firmly that any new initiatives in the energy industry in Bermuda must bring prices down. This is a strategic imperative for the Ascendant Group working with engineers, planners and customers through all of its subsidiaries to increase efficiency, reduce costs, and find alternatives to traditional electricity production.

“We are confident in the underlying strength of the company and committed to delivering value to shareholders, while continuing to participate in the community as a service provider, employer, taxpayer, donor and purchaser of local goods and services,” Mr. Higgins said.

AG Holdings recorded net earnings for 2012 of $427,676, representing an improvement of $1.4 million versus a net loss of $925,102 in 2011. While PureNERGY posted a loss of $385,399 in 2012, this represents an improvement of $1.0 million when compared to the loss of $1.4 million sustained in 2011. iFM’s contribution to Ascendant Group’s net earnings was approximately $103,000. In 2012, the company acquired a majority investment in Air Care, which has earned $717,063 for the seven-month period ended 31 December 2012, of which $451,779 is attributable to Ascendant Group shareholders after deducting minority interests.

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Category: All, Business