Bermuda Container Line Ltd. (BCL), which is embroiled in a legal battle in the US, roared back into a profitable position last year according to the latest annual report.

The company had net earnings of about $1.7 million in 1996 compared to a loss of $871,000 the previous year. The 1996 net earnings were made up of an operating profit of about $2.1 million, compared to $1.9 million the previous year.

When offset by a provision for relocation costs of $350,000, the improvement in operating profit of $148,000 came from the Florida to Bermuda container ship service operated by Somers Isles Shipping Ltd. BCL owns 50 percent of Somers Isles, which operates the Somers Isles container ship out of Fenrandina Beach.

Earnings growth from the company's two subsidiaries, North Florida Shipping Inc. and Trident Container Services Inc. also contributed to the profits.

During 1996 BCL set up a Delaware subsidiary Salem River Holdings Inc., to allow particiaption in the ownership of a new terminal facility in Salem, New Jersey for the company's Bermuda service. BCL has entered into negotiations to take over 100 percent ownership of the terminal.

The company is currently in a dispute with the International Longshoremen's Association, which has delayed its planned move from Port Elizabeth, New Jersey to Salem. The association claims BCL is bound by contract to only work in ports where its members are represented. The association is not represented in Salem.

The issue was heard by a local industry committee which decided BCL would be in breach of contract and would be subject to damages of about $600,000 per voyage if it moved to Salem.

BCL is trying to resolve the matter through legal channels, the annual report stated. BCL has taken the dispute to the National Labor Relations Board inthe US and has filed a suit against the association and the New York Shipping Association.

The company's new Jersey to Bermuda service, in which its wholly owned MV Oleander operates, had a decline in volume due to competition from Somers Isles and Bermuda International Shipping Ltd., which also serve the Island.

However the overall market for containers coming into Bermuda during 1996 increased by about four percent, the annual report stated. BCL last traded on the Bermuda Stock Exchange at $3 in May.

PROFIT RISE -- Bermuda Container Line, which owns the Oleander, reported a profit for 1996 BUSINESS BUC