Sea Containers Ltd., the Bermuda-based leisure and transport group, has just announced a $31.8 million ($1.50 per common share) profit on revenue of $467 million for the year to December 31, and, fourth quarter net income of $7.8 million ($0.35 per common share) on revenue of $113 million.

The figures compare to 1993 net income of $42.9 million ($2.66) on revenue of $439 million and fourth quarter profits of $9.2 million ($0.52) on revenue of $109 million.

Sea Containers is a marine container asset lessor, ferries and port operator and hotels and tourist train owner.

The principle causes of the drop in profits, said president Mr. James B.

Sherwood, were higher interest charges and 1993's fourth quarter $13.3 million gain on sale of a financial instrument.

At the operating level (i.e. before interest, corporate costs and taxes), he said, meaningful improvements were made over last year.

The marine container division had operating profits of $74 million, compared with $61 million in 1993 (after eliminating the non-recurring gain on the sale of a factory.) The ferries and ports division reported operating profits almost the same in both years at $23 million, but in 1993 it received some payments of insurance claims which were not repeated in 1994, and made a profit on a ship sale, which together totalled $6.8 million.

The leisure division's operating income showed a large increase to $14 million in 1994 from $2 million in 1993.

Mr. Sherwood indicated that the company commenced to raise container lease rates in mid-1994 and to impose changes to its container repair procedures to cut costs.

By year end only a small percentage of the fleet had benefited from these improvements but the pace of change has increased and it is expected that during 1995 the company will be able to offset a much greater part of its increased interest costs through these measures.

Utilisation of the company's marine container fleet increased from 84 percent at December 31, 1993 to 91 percent at the end of 1994.

The ferry and port division earnings were held back in 1994 because of continuing losses in the Sweden to Denmark SeaCat services and reduced first half of the year earnings of the Isle of Man Steam Packet Company (43 percent owned by the company).

The Swedish operation has been put under the management of Hoverspeed and the first SuperSeaCat will replace a smaller SeaCat in June, providing much greater capacity in the peak travel period.

The Steam Packet Company incurred heavy start-up losses through mid-year in connection with a new North Sea freight service but this service is now operating close to break-even and a second ship will shortly be introduced.

The Channel Tunnel has been operational since the beginning of the year and in January captured 18 percent of the market. It was interesting to note that the total market grew by 18 percent in January over January of 1994, thus there was no reduction in ferry passengers.

The company's leisure division has shown a major improvement in operating profits in 1994. Strong demand for the company's Italian hotels combined with rationalisation of management and addition of new rooms contributed to this, as well as excellent performance from the Windsor Court Hotel in New Orleans following the start of riverboat gambling in the City.

The new Eastern & Oriental Express tourist train achieved break even in 1994 (its first full year of operation) while results of the Venice Simplon-Orient-Express in Europe were significantly improved over 1993.

The Copacabana Palace Hotel in Rio de Janeiro reopened in February 1995 after major renovation. The stable Brazilian economy, combined with a reduction of the crime in Rio's tourist areas has increased both tourist and business travel to the City.

In South Africa, the political calm following the transfer of power in elections last April has resulted in a major increase in visitors to that country, benefitting the company's Mount Nelson Hotel in Cape Town. The company's managed hotels in Portugal and Australia have also enjoyed significant revenue increases. The acquisition of Orient-Express Hotels Inc.

in mid 1994 has allowed some savings through reduced overhead.

Mr. Sherwood said that the company is now well advanced in its asset sales programme announced last August. One ferry unit and one major hotel are being offered for sale and it is intended to pay down high interest debt and retire high dividend preferred shares with the proceeds, which are targetted to be around $250 million. If the assets are sold at the desired prices, profits on sale will be significant.