Bermuda Aviation Services Limited (BAS), the parent company of Weir Enterprises and Crow Lane Bakery among others, had an encouraging and disappointing first half of 2002 according to chairman Neville Conyers.

Mr. Conyers on Friday submitted his chairman's report to the Bermuda Stock Exchange (BSX) and said: "Our six months results are both encouraging and disappointing. Encouraging because we have been able to produce reasonable results despite a very difficult operating environment. Disappointing because of the fact that we have not made more significant gains having added new business to our portfolio in the last year."

BAS' revenue for the period decreased 3 percent to $10.7 million, whilst expenses were lowered 2.1 percent.

Operating income was slightly lower, dropping 1 percent to $1.6 million whilst net income and earnings per share reduced by 5 percent to $1.5 million and $1.42, respectively. Mr. Conyers said: "Our biggest challenge continues to be in our aviation business where continuing declines in actual flights are having an adverse effect on the divisions of Aircraft Services Bermuda Ltd. Additionally, new security restrictions are also affecting freight volumes in this area.

"Declining passenger numbers and further reductions in meal uplift are having a similar effect on Bermuda Aviation Services Ltd., as revenues in these divisions are down 19 percent or $1.4 million."

Mr. Conyers said Weir Enterprises Ltd. had performed exceptionally well in the first six months of the year, and had more that met the board's expectations in terms of revenue generated and income realised.

"D. E. Mortimer & Co. Ltd., which has always generated reasonable profits, continues to improve its performance and is showing a 6 percent improvement over the same period a year ago.

"And, despite fierce competition and a slowing economy, Crow Lane Bakery Ltd.'s performance is also well ahead of last year," said Mr. Conyers.

He also said the last six months of the fiscal year are traditionally more difficult but this year the company expected to improve on their results going into that period.

"With flight schedules being reduced because of the general state of aviation, we do expect revenue in our aviation related companies to decline further.

"Several carriers serving Bermuda have indicated that they intend to cut capacity and except for US Airways, who for the first time in recent memory will have only one daily flight into Bermuda, the remaining schedules for Bermuda are yet to be determined," said Mr. Conyers.