responsible for a marginal rise in half-year profits for BELCO Holdings Ltd.

BELCO declared $6,104,756 in net earnings for the six months to June 30, up marginally (0.61 percent) on the first six months of the 1996 financial year.

Total electricity kilowatt hour sales dipped 0.78 percent, when compared with the same period last year.

President and CEO, Garry Madeiros, attributed the 0.24 percent decrease in residential sales to moderate winter and spring temperatures.

He said the 1.91 percent decrease in commercial electricity sales reflected the combined effect of moderate winter and spring temperatures, and the tourism slump during the early part of the summer.

But he added: "A number of large construction projects were completed late in the second quarter, and we can expect to see electricity sales increase as these facilities come on line.'' Electricity operating expenses were hit by a 5.83 percent increase in fuel oil costs over the comparative period.

International market forces drove fuel costs up to $49.88 per barrel earlier this year. That included the $15.10 per barrel paid in Customs duty. It compares to the $40.34 per barrel paid on average during the first six months of last year.

Fuel oil costs decreased to $42 per barrel this June and that decrease will be reflected in the fuel adjustment rate for the up-coming months.

Despite increased fuel costs, the electricity operation is benefiting from the renegotiation last year of BELCO's generation insurance policy.

BELCO also renegotiated their fire insurance policy and expect benefits to be reflected at the end of the year. There are also benefits being derived from a reduction of interest on short-term financing.

Retail subsidiary Bermuda Gas & Utility (BGU) recorded a slight increase (0.85 percent) in total gas volume sales, but appliance sales rose 14.9 percent and service billings improved 11.57 percent.

Mr. Madeiros said: "These increases are attributable to new commercial and residential developments and a large number of home renovations. (BGU) expenses have increased slightly due to a number of factors such as the increase in warehousing and delivery expenses associated with increased appliance sales and service.'' In its second year of operation, BELCO Energy Services Co. (BESCO) has completed about $1 million worth of work. And a considerable number of new value-added energy efficient service projects were planned during the first six months of 1997, and work is on-going with a number of BELCO's largest customers.

BESCO incurred start-up costs last year, but has decreased expenses by 13 percent or $51,303 for the first six months. The expenses are expected to continue to decrease since the appointment of a new general manager, who is expected to reduce the need for outside consultancy.

BETTER SECOND HALF -- Gary Madeiros