Belco boss Garry Madeiros did not rule out future labour disputes as the company undergoes restructuring, but said it was all part and parcel of a dynamic company striving for corporate responsibility.

In an interim report to shareholders, Mr. Madeiros said: "Change is essential but never easy, and 2002 continues to be a year of change at Belco. This particularly, as we move forward with plans to restructure the company into core service groups focused on strategic, team-based processes that we need to have in place in order to meet the opportunities and challenges in the future.

"The traditional organisational chart is being replaced by a flatter organisational structure where processes and outcomes are the centre of attention rather than individual functions and departmental roles.

"This means that throughout the company, our people are having to change the way they plan and think about their work. Narrowly focused, traditional departmental employee roles are being replaced by a cross- departmental, team-based approach with greater emphasis on individual and collective responsibility, and accountability for the outcome.

"As we have shared with you on numerous occasions, our goal is to be the best employer, the best managed company in Bermuda and the best service provider. Although this position could be considered by some to be overly ambitious, we believe that to strive for anything less would be a violation of our corporate responsibility," Mr. Madeiros said. Although Mr. Madeiros cited the company as having a good labour relations track record, he said there could be disputes as the company initiates change: "You may have heard that earlier this month, following the termination of two Belco apprentices, a small group of employees demonstrated their displeasure by calling in sick.

"This was not a union- sanctioned action and discussions regarding the various viewpoints have subsequently taken place. However, as Belco continues to move through restructuring and re-focusing the organisation on process work, demanding greater responsibility and accountability, there very well could be disagreements as people migrate from what has been accepted, to what will be expected," he said. But Mr. Madeiros stressed that changes were to be implemented in the interest of being a strong service organisation and also for employees: "As an organisation, we have always placed a great deal of attention on the value and potential of our employees. It is within this spirit that we are working with the whole organisation to provide everyone with greater clarity as to expectations and more frequent, productive feedback. We expect that for some this will be uncomfortable. However, as our organisation changes to meet the growing expectations of our customers and community, so must our people," he concluded.

Looking at how the company's sales through August, Belco reported record demand for electricity in July and that sales overall had been healthy.

The company said total kilowatt hour sales through August 2002 were up 2.98 percent over the same period last year.

This was attributed to hotel use, with several large hotels undergoing renovations in the early part of 2001 and this, combined with increased demand for electricity at the ACE building, contributed to a 5.59 percent rise in demand sales. The company added that as of July 31, 2002 demand for electricity reached a new record peak of 107,900 kilowatts or 1.6 percent higher than last year.

In contrast to steady demand for electricity, the company said its subsidiary Bermuda Gas & Utility was feeling the effects of a weakened hospitality industry and milder winter temperatures, putting year-to-date demand for propane gas in both the commercial and residential sectors 2.8 percent lower than last year.

But Bermuda Gas had reportedly enjoyed strong sales of appliances and outdoor gas cylinders during the period.

In releasing its interim report, Belco also announced a dividend for shareholders of 38.5 cents per share.