BELCO’s Income Falls, Customers Decrease
BELCO’s net income fell $1.4 million to $13.2 million for 2012, with the company saying for the first time in its 107-year history, they saw their customer base decrease “due to the departure of non-Bermudians, Bermudians relocating to other countries, and commercial customers closing, reducing activities or moving operations…”
The company’s earnings were included when the Ascendant Group — the parent company of BELCO — reported its earnings today.
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,” a statement from the company said.
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.
The company has come under fire recently from Finance Minister Bob Richards, who suggested that BELCO’s rates were too high, and said “BELCO is a problem for Bermuda, for Bermudians as individuals, for Bermuda as a country. Everything uses power…”
In response, Ascendant noted that the high cost of electricity is primarily driven by the cost of fuel oil which is the main source of electricity generation in Bermuda today.
Guessing all the tiered rate increases and additional fees helped to cushion the blow for BELCO.
They cite the weak economy and loss of clients as happening for the first time ever, but only experienced a $1.4mn or 10% drop in net income for the year and still able to record $13+mn in profits.
Sorry BELCO, I am not shedding any tears for you guys as my bill is more than $100 more as compared to the same month last year, despite the fact that I am not receiving an enhanced product or used more energy (actually used ess than one year ago).
This is so sad, we as a country should band together to help Belco and Ascendant group get back on their feet.
ARE YOU KIDDING ME @PhuckYou (p.s. why can’t people be brave enough to use their first names instead of these stupid and rude names)?
BOO HOO – BELCO will continue to see losses into the future because quite bluntly they REFUSE to join the bandwagon of green energy solutions and come up with an alternative energy solution for Bermuda! If other little islands can do it, why can’t Bermuda! Check out this video…solution might not be exact for Bermuda, as each island is different, but where there is a will there is a way!!!
This video puts Bermuda to SHAME. https://www.youtube.com/watch?feature=player_embedded&v=nKmHJGvDaN0#!
It is the new government of Bermuda that should drive the energy policy for the people of Bermuda(unless, of course, they are getting some kind of kick back from BELCO).
We have wind, we have sun and we have currents. What more do we need???????????
BELCO’s investors have been enjoying incredible profits over the last 100 years! Just like we needed a change in government, we the people of Bermdua now DEMAND a change in energy.
Those countries left holding the dirty bag of coal are going to be paying a VERY high price for it and it is coming much faster than we think…in the next 8 to 10 years! Guess who is going to pay the final bill???
i think the person was being sarcastic… they cant be that dumb, can they?????
Was being sarcastic…….You idiot!!!
Once again, be brave and use your real name!!
Only if you use your full name c#%tface!
Kathy Cervino! It is so easy to be uneducated and rude when you don’t use your real name. No need to be nasty.
Are You really that stupid? That’s sarcasm. I feel sorry for some people here. Public education perhaps?
I’m with you, let’s pay lots more and give up other things so they can buy more company’s
belco is just greedy and evil does that 1.4m include their other companys and what the hell is a fuel ajustment for.the govt needs to get some balls and allow people to cut belco off
I agree with your comment 100% to hell with belco & their shareholders. bunch of rip off’s
Get used to it Belco! You were making too much money anyway!
Poor Belco. Less ridiculous monopoly profit to distribute. Maybe they made it up on gas sales . . .
Does that mean that the remainder of us struggling folk will have to take up the slack for their lose?
Nope. PLP rejected their request for a rate hike.
We’ll see what the OBA does. I’m not convinced despite what Bob Richards is saying. Belco is all old UBP money and they run tings in the OBA.
well said some things don’t change ask vince
So as to make sure you’re not talking from a position of ignorance you should have a read first;
http://www.ascendantgroup.bm/index.php?option=com_content&view=article&id=2&Itemid=3
The irony is that none of us would be able to post our opinions online without BELCo. I say cut them some slack, they are not asking for sympathy just providing you with information.
boo hoo right poor belco
Actually you’re wrong. http://www.treehugger.com/gadgets/7-portable-solar-laptop-chargers-worth-considering.html
The technology of the future will bring more ways to easily harness alternative energy sources & belco will be the dinosaur of the future.
As for cutting them some slack I already have by buying alternative energy products. This way they won’t have to wear down their generators as fast. The rest of Bermuda should do the same & belco should thank us for not burdening as much.
Oh, boo hoo…poor, poor Belco. Oh, whatever will you do? One thing you probably WILL NOT be doing is continuing to rape the common man ’cause Minister Richards seems to have you all firmly in his crosshairs!!!
“….the company saying for the first time in its 107-year history, they saw their customer base decrease “due to the departure of non-Bermudians”. So Belco is saying that 107 years ago, there were more non-Bermudians living in Bermuda than there are today? Come on Linda Smith, you can come better than that.
Oh good grief! Did anyone expect better from Laverne? Nope? Didn’t think so.
give Laverne a break. she has nothing else better to do, dock is getting fixed, richards is questioning belco and bloomberg said the difference is night and day. lol laverne is in a fizzy lol
LaVerne, I have a 7 year old who has better comprehension skills than you.
Why don’t you apply the same logic to this as you did to the school that closed. What was it…? “if it depended so much on expats as its customers it shouldn’t have existed in the first place”….
@ Mad Dawg,
I have seen some of your comments, and you make dumba$$ comments too. lol
Let me guess. You’re about 14 years old.
@ Zombie Apocalypse
I’m old enough to be your daddy lol
Maybe he meant your dumba$$ IQ? It’s possible.
What a joke! Belco go lay down!
You are probably a big reason why locals have left the island. You refuse to take credit or debit cards because you don’t want to pay bank fees although almost every other service provider (smaller ones) do. 1.5% to be convenient to your customer as a monopoly is not reasonable to your shareholders I suppose.
And then you want to use biometrics on your Gas division to see if people show up to work on time. Wonder what that set you back. Your management needs some serious scrutiny.
Air Care was exactly what you needed to buy instead of investing in your energy model. How much do you reinvest into your business model annually for cleaner and efficient changes in technology?
Kudos to Bob Richards for saying it how it is. I guess he doesn’t have shares in Ascendent.
Are you really gonna harp on credit cards? Belco is a utility. You pay them once a month. While it would be nice to be able to use a credit card, all that will happen is people will run up debt on the credit card and owe the bank instead of Belco. Plus part of the credit card interchange fees goes overseas and is lost to Bermuda. People who have credit cards have bank accounts and can pay directly from online banking, ATM machines, or by setting up direct debit. So credit cards in this case are really an unnecessary overhead that would ultimately be tacked on to the consumer’s end anyway. Btw, the local banks still get a cut of the direct pay options, just not as much.
Nope I said debit OR credit cards. 1.5% applies to Debit cards attached to a checking or savings account. How someone chooses to pay their bills is their concern but should have flexibility.
Belco won’t take 1.5% to get paid but will probably send them BCA over a bill.
Belco sent me to BCA over a bill that got completely forgotten with a month overseas immedeatly after a house move.
They had my contact details and were e-mailing me bills. After the initial bill, nothing. No “Overdue Amount” bill and no “We will refer you to the BCA” notification. 18 months that bill sat forgotten.
72% on top of the original amount in fees and charges is what the BCA charged in the end. Easier for BELCO to bundle everyone together and send it off than reach out to individuals and offer a reminder.
BELCO and the BCA are just as bad as one another for sticking on surcharges to wring as much as they can out of the general public. Luckily I could cover it all in one go, terrified to think what the monthly interest rate with the BCA is.
So let me make sure I understand the story. You failed to pay your BELCO bill for a year and a half, and as a result you got hit with some surcharges.
Frankly, I couldn’t care less. You should pay your bills like everyone else has to. Maybe it would reduce the cost for the rest of us idiots who pay on time. Stop whining.
“You are probably a big reason why locals have left the island.”
belco prices have also been one of the factors for IB leaving. IB can pay half the amount they pay here for electricity in other jurisdictions. This is why John Swan had his new building designed bauhaus style so less electricity would be used saving his tenants a major cost.
BELCO have been taking us for years, now their time has come to explain their massive profits along with the groups purchase or partnership with the likes of IFM Air Care etc off the backs of the bill paying public, especially since they are so bad at maintaining their core business. Bob Richards is right, and we should not be turning stuff off to try and save, the fuel surcharge , and the ridiculous demand limit imposed on commercial customers all need to be looked at and explained.
Thank you Bob for taking Belco to task….
As I have stated for many years, Belco needs competition!
Okay so less profits for the shareholders…..big deal!!!! They have been cashing in on large payouts for quite some time….time to take a “paycut” like everyone else…..
Sooooo, when are the layoffs going to start at BELCO? Without updating equipment when are the blackouts going to start as old equipment breaks down & new stuff is not in the pipeline to replace it? You can’t just get on a plane, slip off to Lowes & get another genny.
Wait for the howling to start when the lights go dark, the cellphone chargers won’t work, the airconditioners won’t work, the gas pumps wont work, you fridges stop working, water won’t pump, you can’t flush a toilet, etc.etc.
What will y’all do? Stamp your feet & DEMAND BELCO fixes it like yesterday? Doesn’t work that way.
Instead of paying out big dividends to shareholders they should be investing in green energy – my God, , Bda Is absolutely surrounded with green energy prospects , from wind to solar and wave energy- we could be a model of future energy for the world! Oh, but of course, it would cut into profits for investors who have been raking it in for years ( as my mother used to say)” take care that they don’t spend their own money on moving forward” What a bunch of hypocrites, sound like the selfish Republicans here in Washington !!!!!!!!
So lemme get this straight. From 92 people/companies/whatever leaving the island, they lost $1.4 MILLION in profit?! That don’t sound right, they ripping everybody off!
Have you counted how many hotels have been closed, reduced to rubble or have so many of their rooms sitting in darkness every night. Do you have any idea of how much office space is sitting empty, no air conditioners going, no computers going, no lights on? Have you not noticed how many houses sit empty & in darkness every night?
Drifter almost got it right , all that empty space, all the empty houses , all the energie efficient stuff,solar at lidos,gorhams,few buildings in town, all the solar hot water heaters AND THEY STILL MAKE TONS OFF MONEY?
They are tearing us a new one every data.
I can understand the fuel adjustment going up when the barrel was at $100 or more , but it did not go down when it was back at $55. So much to hedging your bets.
Biggest monopoly on the island and they are still crying.
@ Werner – that’s not how the fuel adjustment works! BELCO don’t apply for a FAR increase/decrease based on what they have used the previous month or what they forecast to use in subsequent months, they apply for a FAR adjustment based on how much they have/haven’t been able to recover of their initial investment in fuel from sometimes months sometimes years in the past. The FAR allows BELCO to recover the investment in fuel over a period of time but not all at once, to smooth this cost out so the consumer doesn’t take a big hit in one bill – hence the fluctuation in the FAR from month to month and yes it does go down (http://www.belco.bm/index.php?option=com_content&view=article&id=142&Itemid=217)
Imagine if the shareholders did not receive a profit for investing in BELCO and they remove their money? As the ad says “my my my lights out”! Shareholders should receive an investment return it is part of the natural business process.Hell if we want this run by the Government!!
Ignore the huge wind farm and current farm ideas as this will be years in the making.
What we should be doing and is looking to use and devise other ways of using alternative energy sources to our reliance upon BELCO is reduced. Wind power, solar etc. etc. These types of things could be such as interest free loans which could be then affortable and we can then sell back electricity to Belco.
We would also have to limit the awful Planning rules and regs which make it also difficult to install.
hmmm now how do i answer some of the critics…..first of all i am a small shareholder in Belco, actually my grandson is as i purchased some shares for him a few years back. I paid $22.50 for each share, today they are worth $11.75. WOW thats a lot of profit on my investment.
Belco is owned my many of its employees and ex employees as they have always sold shares to the workers of the company.
Belco puts a lot of money into scholarship funds for local students and supports charities thruout the island.
Belco make NO PROFIT on the fuel surcharge, fuel on which they pay duty. If Govt dropped the duty on the fuel the cost of Electricity would come down.
Belco is a regulated industry, they cannont raise prices or the fuel surcharge without the Govt ok.
Now on the other hand Insurance Co’s can raise rates every year, mine just went up by 8%, without a word from Bob Richards or Govt. and i am not just talking about health rates either.
Insurance Co’s take their profits and Invest it OVERSEAS, not in the economy like Belco who with their parent co Ascendant have invested in Local Business.
Belco are researching alternative energy sources like wind sun etc, but i can tell you that these are very expensive at the present time, if we had full solar power we would still need Belco to be in reserve when that doesnt work on those rainy and dark days that we often have during the winter. If you think your electricity bill is high now, just wait until we dry and support ourselves on solar power alone.
I could go on but i will reserve some other information for a later date.
I know there are a lot of Belco haters out there, but try and find out the truth of what they do over there, and remember the next time you go home in the dark and you hit the light switch, you want that light to come on.
Investments all over the world have suffered, so this is no surprise. In any event, BELCO has benefited by being the only eletricity provider on the Island. We have no choice on what is charged as we need electricity. Many people are exploring solar alternatives and yes, many people have left so there are further declines in business like the rest of Bermuda’s businesses. What I find interesting is that the media has stated that BELCO’s parents company has done well; gain in profit? Many of us right now are without jobs, homes etc. so good for them that they have a profit…….I wonder if that came from the excess in fuel charge that happens every summer when we see our bills double and the excuse is that they bought fuel in advance and therefore have to charge us for that???? You will see more and more people open their windows and turn off the ac,, more people using their clothes lines and not their dryers if they keep this up and then Madam you will see your investment go down further so talk to your board members and let them know people will use more if they get a fair price.
“Investments all over the world have suffered so this is no surprise”. Wrong. Actually most indices, including the DJIA, are at all-time highs. Yet this “greedy” shareholder has seen his investment halve in value.
Got any more expert insight?
One problem I have is that because BELCO is allowed to pass on 100% of the fuel surcharge to its customers theer is no incentive for them to be more fuel effecient! Hence there profits are not affected by whatever the surcharge is. This needs to change. Your comparison to insurers is flawed as they face a growing aging population which increases their cost which they cannot simply pass on 100% because they have to remain competetive.
“Belco make NO PROFIT on the fuel surcharge”
I cannot believe that you believe this. The duty on fuel doesn’t go up monthly but the fuel surcharge seems to. I’ve seen times when the price of oil is at a low but the fuel surcharge still increases.
Solar is not the only alternative energy source belco could have invested in but belco knows this since they reported researching other sources years ago that other islands in the pacific are successfully using at present. The reason belco hasn’t invested in these sources is because they didn’t want to take on the initial cost even though in the long run it would have leveled out. It’s all about the shareholders addiction to high profits without any liability.
They don’t make a profit on the fuel surcharge. Get a clue Tommy.
Like Zoinks! Here’s a clue for you Scooby Doo.
1 gallon of fuel can generate a max of 44.5 kwh of electricity. There are 31.5 gallons of fuel in a barrel. Do the math & if you have half a cranium you should be able to find out who’s behind the 10,000 Volt Ghost.
@ Tommy Chong – that’s not how the fuel adjustment works! BELCO don’t apply for a FAR increase/decrease based on what they have used the previous month, they apply for a FAR adjustment based on how much they have/haven’t been able to recover of their initial investment in fuel from many months in the past(they buy in bulk several times in a year). The FAR allows BELCO to recover the investment in fuel over a period of time but not all at once, to smooth this cost out so the consumer doesn’t take a big hit in one bill – hence the fluctuation in the FAR from month to month does not directly reflect the world market oil price. Its the Energy Commission who determine how much BELCO can recover and when not BELCO,(http://www.belco.bm/index.php?option=com_content&view=article&id=142&Itemid=217)
Thanks for directing me to this & now I’d like to give you some figures. As I mentioned to Zombie Apocalypse 1 gallon of fuel can generate a max of 44.5 kwh of electricity 7 there are 31.5 gallons of fuel in a barrel. Now with this & the link you sent me in mind even if I used a whoppen 600 kwh of electricity which I don’t & never have I should be charged less than $45 for FAR which is far below what I get charged even when I use far less than 600 kwh. Knowing this proves that someones making a massive profit & that someone can only be the business that the bills get paid to.
Nevertheless thank you again for the link that silly me should have checked out before. Now I will be contacting someone about my fuel rate. I’ve already proved many of the meter readings in my bills wrong & had them adjusted to a lower price. Now thanks to you I will have my FAR adjusted.
Oh my goodness. Tommy, I didn’t realise that you were such an expert in forward hedging, commodities pricing, and oil derivatives. I can tell you know exactly what you’re talking about. You should do what you’re suggesting. Contact BELCO when you get your next bill, and demand to go and see their CFO. Give him at least 30-45 minutes of free advice about how he should be timing and financing oil purchases, how this expenses should flow through the P&L statement, how it affects cash flow, and how to account for it properly on customer’s monthly bills.
I’m sure they have never thought about the insights you’re able to bring. All of Bermuda will benefit from lower energy prices, all because of the common-sense advice that you can offer. On behalf of us all Tommy, thank you for sharing your masterful insight.
The Wealthy shareholders of BELCO have to come to the fact that:
[1] Bermudian Residents are watching evey dollar they spend
[2] while the state of the ecconomy is still suffering from a near collapse your still charging outrageous prices
[3] the existing fuel gosling Power Plant is a Dinosaur – sad thing is they know it!
[4] they have to invest in new more renewable cost effective energy [ should have been done 7 -8 years ago
[5] Greed mixed with stupidity has it’s limits
[6] Bermudian residents are going to find ways to provide electical for themselves — your forcing them to do so
Lest we forget… isn’t it US who are in control of how much electricity we use?
Great reply Kim.
It is us that need to source other way to remove our total reliance upon BELCO – maybe that is what Govt should be doing instead of pointing the finger at BELCO (who I might add has invested millions and millions millions of $$$$$).
We are not in control of the increase in rates belco has put on us. Trying to conserve electricity to conserve money in Bermuda is like a dog chasing its tail. The more I have done to conserve the more I have seen the rates go up. No matter if the price of oil increases or decreases the fuel charge increases. Lets not forget that belco also uses OUR trash for energy.
Your FAR charges are based on how many KwHs of electricity you use – you use more you pay more! The multiplier (the FAR itself) does go up and down depending on the rate the Energy Commission sets each month in order that BELCO can recover their initial investment in fuel (after receiving a submission from BELCO to justify a request to increase/decrease the rate). If you look at the history of the FAR it has gone up and down over the last few years – (http://www.belco.bm/index.php?option=com_content&view=article&id=142&Itemid=217) but it does not correlate directly to the world price of fuel at any specific time. Again it is the Energy Commission who regulates BELCO and what they charge – whether it is the FAR, base rate, facilities charge etc.
GOOD! Even if it is a little, Im glad BELCO is feelin it like the rest of us.. Don’t feel a bit sorry for you.
I purchased a timer for my water heater (Gorhams $75), a gas cooker (e-moo)and fancy LED lights for my home, wash in cold water with full loads only, dry stuff outside when possible and now pay Belco a lot less than I did a year ago. Also my Carbon foot print is reduced which I feel really good about. Maybe if we all did more to save energy Belco would earn less and the world would be better for it.
I remember when Cable and Wireless used to charge outrageous rates for long distance calls. For years, we in Bermuda were told that there was no possible way to lower costs. Cable and Wireless made massive profits for years. Strangely when TBI came on the scene, rates dropped almost overnight to the relatively low rates we enjoy today. Belco is singing the same tune Cable and Wireless sang for years.
Belco’s exorbitant rates are not caused just by fuel costs folks!! Belco has always taken advantage of it’s monopoly position to be overstaffed!–busness down–but no layoffs like other businesses! Further, their staff is also overpaid WITH multiple benefit(s) beyond those of any other Bermudian business! Employee retirement packages are also exorbitant compared to most! Customer fees supporting THOSE things are just as reponsible for their exorbitant fees as fuel costs! But have you heard of any of those staff,wages or benefits being cut or meaningfully reduced?? A resounding NO!!!! IF the Energy Commission’s powers are NOT just restricted to fuel cost adjustments,- they are doing a bad ‘friends+family’ job ignoring those factors!! In any case–KEEP AT THEM Mr Richards, YOU MAY BE OUR ONLY HOPE!!!
Belco is a serious infrastructural brake on Bermudian economic development. Power that’s outrageously expensive even compared to other countries that have to import energy. Power that’s unreliable every time the wind blows. Power that is so full of spikes and surges that most institutional users have to spend huge amounts on power conditioners in order to protect expensive equipment. Power that’s so polluting that it would be illegal in most developed countries. Half the institutions and homes in BDA feel compelled to invest in expensive generators because they can’t depend on the monopolist. The aggregate costs are in the tens of millions. I know for a fact of several high-tech companies that considered establishing themselves in Bermuda decided not to because of our third world infrastructure, of which Belco and the telecoms/internet providers were the main culprits. Belco have been dragging their heels for too long. Come on BDA, let’s insist on first world standards!