1992.

Even a loss of this magnitude was better than the year before when BCL made a loss of $1.63 million.

A report by management admitted that 1992 had been "another difficult year''.

Revenues increased by 1.9 percent ($262,637) to $15.73 million, but expenses also went up, by 1.1 percent ($192,878), to $17.27 million.

The company managed to reduce the losses on its New York/Bermuda service by $600,000 during the 12 months to December 31, 1992.

But this was partly offset by a "large loss'' generated by the charter operations of the Hibiscus vessel which had broken even in 1991.

BCL has now decided to sell the Hibiscus, although the company said "it could take time to sell the ship at a good price''.

Somers Isles Shipping, in which BCL has a 50 percent stake, made a profit of $3,000 in 1992, compared with a loss of nearly $200,000 the year before.

But that profit was only achieved because of a "large, non-operating, legal settlement''.

BCL's management report said that revenue on the New York/Bermuda service increased by $488,000 or 3.4 percent in 1992.

But there was even faster growth in the stevedoring and cargo handling expenses, which shot up by $385,000 or 5.46 percent.

"This means that over 50 cents of every revenue dollar goes to physically getting the cargo on and off the ship,'' said BCL's management.

"That means that less than 50 cents of the revenue dollar is available to pay the operational costs of the ship, fuel, port costs, lease and repair costs of containers, agency and freight brokerage fees, management costs, interest and depreciation, and, finally, pay a return on the shareholders' substantial investment.

"If Bermuda Container Line had been able to limit the stevedoring and cargo handling cost to 44 percent of revenue as it was in 1986, it would have been able to make a reasonable profit in 1992.'' Despite the results, management said there were bright spots, including a positive cash flow from operations of $103,000 in 1992.

"In the long-term, a company must earn profits but, in the short-term, in difficult conditions as we have experienced over the last few years, the critical element is for a company to generate sufficient cash to cover its day-to-day operations,'' said management.

Although BCL's freight rate increased by about $150 per container on June 5, 1993, which was broadly in line with increases by Bermuda International Shipping, rates needed to go up again before the end of the year "to achieve even a modest profit level'', said management.

BCL's assets fell by 5.9 percent ($1.15 million) to $18.44 million in 1992 and its liabilities increased by 6 percent ($382,715) to $6.62 million.

Management said: "It is not anticipated that BCL will return to profitability in 1993 but the losses should be substantially reduced and the stage set for a return to modest profitability in 1994.''