the first half of 1998, a 20 percent increase over the same period 1997.

Increased demand from new customers and lower operating expenses helped drive profit growth. Subsidiary Belco Energy Services Co. (Besco) also contributed by turning a profit in its third year of operation.

Electricity kilowatt hour sales were up 4.24 percent in the first six months compared with the same period 1997.

"All of the Holdings' business units performed well, although Bermuda Gas and Utility's performance is down on 1997 as substantial costs were incurred in the company's relocation to Wesley Street and amortisation of capital improvements to the new showroom,'' the company stated. "Belco results are solid with kilowatt hour sales slightly ahead of last year as new large and existing demand customers are using significant levels of energy.'' CedarBridge Academy and the Bermuda Underwater Exploration Institute are among the new customers pushing commercial kilowatt hour demand up 6.84 percent.

Residential sales increased three percent over the same period last year.

Meanwhile electricity operating expenses fell $1.6 million from the first half of 1997. Belco attributed the decrease to a four percent increase in fuel efficiency. Fuel prices also fell an average of about 13 percent over prices in the first half of 1997.

Subsidiary Bermuda Gas' total sales increased 2.3 percent. While gas sales decreased about three percent, appliance, services and parts sales offset the decline. Net income dropped 29 percent to $263,825 due to an 11 percent increase in operating and administrative costs associated with the company's relocation.

Meanwhile Besco, the company's energy consulting and project management subsidiary, is now making a profit.

"Contributing to Besco's improved results is its involvement in several large engineering projects, including the central utility plant at King Edward VII Memorial Hospital, and the BF&M/ACE Ltd. building,'' the company stated.

"Additionally, Besco has seen increased sales of its surge protection equipment.'' SIX-MONTH HIGHLIGHTS Highlights from Belco Holdings' six month results: Net income: $735 million, up 20 percent Electricity kilowatt hour sales: Up 4.24 percent Bermuda Gas net income: $263,825, down 29 percent Besco: Turned a profit for the first time