The Ascendant Group Ltd. suffered a drop of more than $1 million in net earnings during the first half of this year, mainly due to the cost of maintaining Belco's scheduled electricity power plant.

The group, which comprises subsidiaries Belco, Bermuda Gas & Utility Co. Ltd. and PureNERGY Renewables Ltd., saw its consolidated net earnings through June 30, 2009, fall 17.63 percent to $5.5 million from $6.7 million for the same period in 2008.

But Vincent Ingham, president and CEO of the Ascendant Group, expects the group to meet its financial targets for the rest of the year if electric sales maintain their anticipated levels through December.

Belco's revenue from electric sales for the first six months of this year increased by 5.89 percent or $6 million, including fuel adjustment revenues of $3.1 million offset by identical fuel expenses.

Meanwhile an average 1.5 percent rise in the tariff rate granted by the Price Control Commission effective from January 1, 2009, led to a $1.9 million increase in sales revenue, with kilowatt hour (kWh) sales up 4.2 million kWh from 293.7 million kWh sold in 2008 to 297.9 million kWh this year, contributing $1 million to the total rise in electric sales revenue.

Elsewhere, sales to residential customers increased minimally by 0.12 percent or 152,998 kWh in 2009 compared to last year's sales and sales to high demand customers rose 3.9 percent or 4,697,091 kWh versus the same period in 2008, largely down to the construction of new commercial buildings offsetting a decrease in average consumption, particularly in the hotel sector as a result of the impact from the global recession.

As a whole, the group's operating revenue climbed from $103.9 million at June 30, 2008 to $110.4 million for the same period in 2009.

However overall operating expenses for the group were up to $104.7 million from $97 million over the respective periods, while Belco's expenses increased by 7.98 percent above the first six months of 2008, mainly driven by energy supply expenses, which rose $5.7 million or 9.01 percent, 62 percent of which was accounted for by a higher fuel expense. An additional $306,810 of the rise was attributed to a decrease in overall operating efficiency, stemming mostly from an increased number of major overhauls carried out this year compared to 2008, resulting in the use of less efficient turbines.

Administration and general expenses advanced $1.1 million when comparing six-month results for 2009 and 2008, with approximately $811,790 of the increase due to rising pension costs stemming from significant declines in returns from, and valuations of pension fund investments, resulting from challenges in the investment market over the last year.

Bad debt expenses also rose $140,000, as the company increased its bad debt provision to recognise noted deterioration in the collection of receivables during the first half of 2009, due to the declining economic environment.

Bermuda Gas experienced a net income rise to $596,955 for the first six months of 2009, from the $137,855 earned in the same period of 2008, mainly as a result of greater gas sales and an increased focus on improving productivity.

PureNERGY, which was launched in mid-2008 and boasts Bermuda's largest residential renewable-energy deployment to date, at 14 kilowatts, incurred a loss of $485,285 in the first half of 2009, which is considered part of the company's start-up phase.

The subsidiary designs, installs and maintains customised renewable-energy systems for both the residential and commercial markets, specialising in hybrid combinations of technologies, including solar photovoltaic, solar thermal water heating, solar pool heating and micro-wind generation, as well as the provision of a state-of-the-art, post-installation monitoring system for optimal performance.

Mr. Ingham said: "We remain cautiously optimistic about the second half of the year, recognising that our results will be very much influenced by the performance and confidence in the international business, tourism and local retail sectors.

"We are monitoring both the short and the long-term strategies of each operating subsidiary and adapting plans to position our companies to lead evolving market development and respond to changing market signals.

"Ascendant Group is focused on leveraging our collective core strengths to develop opportunities in both new and existing businesses."