Bermuda Container Line Ltd. yesterday reported a three percent increase in net earnings for the first half of the year in spite of reducing freight rates at the beginning of the year.

BCL, which owns the Oleander, said it earned $2.36 million for the six months to June 30, up three percent from the $2.29 million earned in 2001. The company also said the outlook for the second half of the year was healthy.

BCL said it experienced a decline of $744,000 or 5.13 percent, as a result of a reduction in freight rates and a small decline in cargo volume.

"The reduction in freight revenue was due to a number of factors, the most important being general freight rate reductions implemented by the Company at the beginning of the year," the company said. "In addition, there was a small decline in cargo volume with Roll-on/Roll-off and break-bulk cargo declining more than containerised cargo. Finally, a change in the mix of cargo also impacted on freight revenue.

"Interest income was down due to the much lower level of interest rates."

However the company was able to compensate for the decline in revenue by reducing expenses by $813,000 or 6.67 percent to $11.38 million - a greater level than expected.

"A decrease in expenses was expected but actual results were better than planned, the company said.

BCL also increased its dividend for the period from 18 cents a share to 20 cents a share.