A Bermuda investment company is banking on an upturn in the economy as its revenue and market value both fell year on year.

Bermuda First Investment Company — which holds shares in Island firms — posted its results for the nine months to the end of March.

The firm had an unrealised loss of $9 million on its investments, revenue of $0.4 million, and a market value of investments totalling $23.8 million over the period — down from a figure of more than $36 million the year before.

Company chairman Michael Collier said the firm’s two main investments, telecoms firm KeyTech and Ascendant, the parent company of power generator Belco, had hit performance.

Mr Collier added: “The share prices of our two main assets ... remain depressed but we believe there are promising signs in the Bermuda economy and any upturn in economic performance will flow through to the operating performance of these two companies.”

The report said that KeyTech’s full-year results were due to be released later this year — but that it was expected its position would be impacted by the writedown following the sale of phone firm BTC last year.

It added: “However, we look forward to an update on progress in its two main markets, Bermuda and Cayman.

“Despite increased competition, in Bermuda in particular, we believe that KeyTech is well positioned to take advantage of opportunities due to its continued investment in its core networks and infrastructure.

“The share price in our opinion significantly undervalues KeyTech’s assets and it is more a reflection of a suspension of its dividend and the lack of liquidity in its shares.

“We anticipate that as the company’s strategy develops over the next few years the share price will start to reflect the better trading conditions.”

The report added that Ascendant’s 2014 year end results had been hit by the weak Island economy, posting net earnings of $5.9 million, up from $4.9 million on the previous year.

The Bermuda First report said: “The company has recently announced its decision to close its retail service and appliance departments of Bermuda Gas to concentrate on its core business of the supply of propane gas.

“Whilst this will have an impact on earnings in 2015 we believe that by streamlining and focusing on the most profitable part of the business should generate better returns for Ascendant.”

The report added that Belco’s cash flow remained “strained” due to increased operating costs and ageing plant, but that the firm had asked for an increase in rates to achieve an acceptable rate of return.

It said: “We believe that the company is being positioned for the future and by addressing some of the legacy cost issues it should benefit from any upturn in the Bermuda economy. However, ultimately the future return that company will be able to generate will be determined by the energy legislation put in place by the Bermuda Government.

“We hope that with a new regulatory authority in place that the energy infrastructure required for Bermuda’s future will be well thought out and will benefit all Ascendant’s stakeholders.”

Bermuda First said that its investment in insurance firm Argus would be affected by the impact of hurricanes Fay and Gonzalo last year — but that due to the firm’s reinsurance, the effect would be “limited”.

The report added: “We hope that on the back of reasonable returns over the last couple of years, the company will look to increase its dividend.”

For the same period last year, Bermuda First posted a profit of $1.4 million and revenue of $2.6 million, while the market value of its investments was $36.5 million.