to December 31, 1996, president and CEO, Garry Madeiros has indicated.

The quarterly report to shareholders has stated: "Belco Holdings Ltd.'s end of year results for 1996 are expected to exceed 1995,'' given the overall performance of the power company, together with the appliance and liquefied petroleum gas (LPG) retail subsidiary, Bermuda Gas & Utility Co. (BGU).

Last year, Belco declared record net earnings of $13.5 million for fiscal 1995, but declared interim net earnings for the first six months of 1996 of nearly $6.1 million, more than three percent below the near $6.3 million announced halfway through 1995.

But that decline was put down to anticipated business start-up costs associated with subsidiary, Belco Energy Services Company Ltd. (BESCO), together with a management/operations audit at BGU and the resultant restructuring.

Belco's electricity sales through October were said to be up marginally (less than one percent) over the same period in 1995. The largest increase came from the residential sector (up 4.02 percent). Increases help offset the loss of sales from the former US Naval Base (down 67.61 percent).

The BGU and the Electricity Supply Trade Union (ESTU) have ratified their first-ever two-year collective bargaining agreement, which took effect on January 1, covering 49 staff. The new agreement is completely different from an existing contract that governs working conditions for about 250 of the 450 Belco Holdings employees.

BGU is reporting an 8.9 percent increase in overall sales through October.

Appliance sales are up 15.9 percent, and gas sales are up 4.6 percent for the ten month period.

Mr. Madeiros also pointed out this week, "There is one other aspect as well, which is better control of costs. We became more efficient during the previous period, and then last year improved on that.

"Efficiency has been seen in the utilisation of engines. We've been successful during 1996 in those three fundamental areas: controlling costs, more efficiency and increased revenue.'' Meanwhile, the Belco plan to provide Bermuda businesses with an opportunity to effect energy savings has been suspended, in some cases, by the expenditure required by participating firms.

BESCO is partnering with commercial customers and trade allies to provide energy solutions to reduce costs and/or add value to their facilities.

BESCO had conducted more than 40 commercial energy audits evaluating potential energy savings in lighting, heat ventilating and air-conditioning (HVAC), refrigeration, motors and hot water supply.

"As some of the recommendations outlined in a draft energy master plan may require substantial capital investment,'' Mr. Madeiros said in his letter, "decisions (by the various firms) to proceed have, in some instances, been deferred until consideration of the next annual budget.

"BESCO is working with customers who qualify on shared savings and financing arrangements which will allow them to make a long-term investment to ultimately reduce their costs by becoming more energy efficient.'' Mr. Madeiros noted that while the company has obtained some business out of the BESCO initiative, it is not anywhere near its potential.