An investment firm hit by falls in the share prices of major Bermuda companies believes it is poised to benefit from any America’s Cup-assisted upturn in the Island’s economy.

Bermuda First Investment Company Ltd (BFIC) today reported revenue of about $200,000 for the quarter ended September 30, but said unrealised losses on its investments totalled $1.9 million.

The major reasons for the investments hit was the fall in the share prices of Ascendant Group Ltd, owner of electricity company Belco, and telecommunications group KeyTech Ltd.

“This is a continuation of the weak share price performance over the last 12 months and is a reflection of the challenging Bermuda economy,” BFIC chairman Michael Collier said.

“However, we were pleased with the corporate transactions announced by KeyTech in September and with Bermuda hosting the America’s Cup in 2017, and other planned infrastructure projects, we are optimistic that our investments are well placed to take advantage of any upturn in the Bermuda economy.”

BFIC’s investment portfolio ended the quarter with a market value of $30.5 million and the firm declared a loss of $300,000, excluding unrealised losses.

In its commentary on its holdings, the Bermuda Stock Exchange-listed investment firm was particularly upbeat about the prospects for KeyTech, following a major restructuring. The company said KeyTech’s 31 per cent fall in profits to $5.7 million in its last fiscal year did not tell the full story.

“We believe the results hide the strategic progress that KeyTech has made over the last 12 months,” BFIC’s report stated.

“The transactions completed in September 2014 have positioned the company for growth in the coming years.

“Growth will not be automatic and there are significant risks both financial and operational but as an entity KeyTech is better placed to deal with the rapidly changing technology world.

“In order to fully benefit from the synergies associated with the acquisition of an additional stake in Cablevision and WestStar in Cayman, KeyTech announced that it had suspended its dividend for the two quarters ending 31 December 2014. Whilst disappointing, we are supportive of the decision as we believe in the long run KeyTech will be able to execute its strategic plan more effectively.”

BFIC expects Ascendant’s results in the second half of the year to be “tempered by the continued weak performance of the Bermuda economy and the two significant storms that affected Bermuda in October 2014”.

BFIC’s other investments include holdings in Argus Group, BF&M, Bermuda Aviation Services and Watlington Waterworks.

The investment firm is looking forward to more information on Ascendant’s energy infrastructure development plans next year.

“There are green shoots of an economic recovery in Bermuda with more business commencing operations and with the potential of the America’s Cup and other infrastructure projects, this hopefully indicates that Bermuda is open for business and investment,” BFIC concluded.

“However, significant improvement in the economy is still required before it will have a meaningful impact on the results of the company’s investments.

“Additional residents from more international business and infrastructure projects will improve the earnings for Belco and KeyTech’s subsidiaries. In advance of that it is pleasing to see management teams, such as KeyTech’s, taking long-term decisions which reduce the risk of their existing operations and position themselves for future growth.

“We continue to believe that our investments are undervalued but recognise that share prices are depressed due to a combination of the illiquidity of the investments’ shares and the Bermuda economic performance.”