1998 were up 8.1 percent over 1997 to $17.6 million.

But the company voiced dismay at losses experienced by Quantum Communications Limited, in which Holdings has a 47 percent stake.

"It is disappointing that Quantum was not able to become fully operational in the period since its inception in 1997,'' said president and CEO Garry Madeiros.

Belco Holdings' annual dividend rate rose to $1.30 from $1.23, while shares closed the year at $22, down from $24.50 at December 31, 1997. Earnings per share were up 7.5 percent to $3.87 per share from $3.60 in 1997.

Return on equity also increased to 10.3 percent in 1998, from the 10.2 percent recorded in 1997 and the ten percent achieved in 1996.

"We are pleased with the results achieved by the Belco Holdings group in 1998,'' said Mr. Madeiros.

"These results are consistent with the strong results we have achieved in recent years and they are indicative of the hard work, determination and loyalty of each and every one of the employees in the Holdings group.'' Bermuda Electric Light Company Ltd.'s (Belco) performance was strong with electricity earnings increasing to $17 million from $15.7 million.

Sales revenues from the commercial and residential sectors combined, jumped by 4.6 percent or $4.5 million, a director result of the expansion of the international business sector and the increased usage of air conditioning among the company's residential customers.

A company spokeswoman said the increase in kilowatt hour sales, as well as increased efficiency of operations and successful cost containment measures,had helped avoid a rate hike in 1998, marking the company's third consecutive year free of rate increases.

No further rate increases were anticipated during 1999.

"While all of our business units performed well, Belco Properties Limited had an exceptional year, due to a one-time sale of real estate, which realised a gain in excess of $4.7 million.'' The results, however, were tempered by the losses experienced by Quantum Communications Limited.

Holdings' portion of the losses, plus its provision for other guarantees made on behalf of Quantum, totalled $4.9 million.

Said Mr. Madeiros: "As a result of persistent delays in interconnecting to the BTC network, Quantum was prohibited from realising its potential as a viable alternative in the telecommunications industry. Unfortunately, we and Cable & Wireless Bermuda are no longer able to sustain our investment in Quantum, given the company's financial position. We are, however, actively working to ensure that Quantum remains a player in this industry under new ownership.''