Cost cutting has proven a winner for Bermuda Container Line Ltd. (BCL) who this week reported record results for 2001.

Importers will also be happy to hear that the company has reduced a broad range of freight rates due to the excellent financial position of the company.

BCL reported that earnings for the year ended December 31 2001 were $4,527,000, an increase of $763,000 or 20 percent over the net earnings recorded in 2000.

The improved earnings were due to a combination of higher cargo volume and decreased expenses in certain key cost areas.

Cargo volumes for both the BCL service from New Jersey and the SISL service from Florida showed healthy increases according to the company which led to an increase in freight revenue.

Gross freight revenue of $28,188,000 was up $1,364,000 or 5.08 percent over the amount generated in 2000 and total revenue at $28,837,000 up $1,528,000.

BCL said the increase in revenue was all due to volume as the company reduced a number of freight rates in the latter part of 2000.

Cost control action taken over the last few years bore fruit in 2001 with operating expenses in 2001 being on par with those in 2000 despite the increased cargo volume. Expenses totalled $24,310,000 in 2001 and $24,301,000 in 2000.

Key areas where cost savings were achieved were in New Jersey stevedoring costs, vessel operating costs and general and administrative expenses.

BCL declared dividends in 2001 of $2,580,000, up by $1,620,000 or 170 percent. The increase in dividends was die to a $120,000 or 12.50 percent increase in regular quarterly dividends and a special year end dividend of $1,500,000.

In addition, a further $2,500,000was added to the new building reserve bringing this amount to $7,500,000.

The new building reserve is to set aside funds for the eventual replacement of the company's ship, the Oleander. Earnings per share for the year were $1.51 compared to $1.25 in 2000 and dividends per share were $0.86 compared to $0.32.

As far as the outlook for 2002, the company said that at the beginning of the year, a decision was made to reduce a broad range of freight rates. This action was taken because of the excellent financial position of the company and because of the cost savings that were achieved and further cost savings anticipated in the future.

The company also said this action improves the competitive position of the company and offers some relief to those importers feeling the financial impact of the downturn in tourism.

While BCL says there has been a noticeable downturn in cargo volume for the first four months of this year - which the company had anticipated - based on preliminary results to date, BCL expects healthy earnings for 2002 but certainly below the record level recorded in 2001.