4.1 percent to $10.6 million for 1993, but company chiefs said the decline was smaller than expected.

Despite military cut-backs, overall sales in kilowatt hours marginally increased (0.37 percent). Sales revenues edged up by 0.7 percent to $98.4 million, while operating expenses moved higher (2.85 percent) by more than $2.35 million to more than $83 million.

Retained earnings rose to more than $73 million from $66.76 million the year before. Total assets stood at $162,730,329, down from $167,499,180. That includes a decrease in cash and short term investments and accumulated depreciation of plant.

Chairman Mr. Neville Conyers said in the company's annual report that the company was hit by the wind down of the military bases. He said they resulted in lost sales of $1.2 million.

"Our better than anticipated financial performance is mainly attributed to the decision to delay some capital projects in order to improve our cashflow position and repay long-term debt in order to benefit from lower interest rates,'' said Mr. Conyers.

BELCO has paid back $16 million in long term debt over the last two years, more than $10.3 million over last year alone, and has substantially improved their debt ratio. Long term debt, as a percentage of the company's capitalisation has shrunk from 13.7 percent to 6.1 percent by the end of the year. The use of cash and short term investment money was part of the reason for the shrinkage in total assets.

But the acceleration in debt repayment is expected to save the company $3.5 million in interest payments through 1996.

President and CEO Mr. Garry Madeiros said: "Our philosophy is one were we are continuing to look at ways to curtail costs. The biggest decision was taken four years ago, when we decided to use more short term debt, and that was before the downturn in interest rates. It turned out to be the correct decision.

"Now the challenge, with interest rates starting to creep up, is deciding how we will arrange future financing.'' The 2.75 percent per annum increases in electricity rates from 1994 through 1996, will mean no more than an 8.5 percent increase in rates for the consumer during this three year period.

The application for rate increases was precipitated by a drop on return on equity from 9.7 percent to 8.7 percent.

The company is planning to invest more than $45 million in property, plant and equipment over the next five years. They will spend $22 million in this year alone in over 200 projects, many that had previously been postponed during the recession.

Capital projects for the last two years costing a combined $17.4 million were financed through cash flows, but Mr. Madeiros, conceeded, "It is anticipated that in the near future the company will have to incur significant levels of debt to finance these programmes.'' The company signed in January a $10 million contract for a gas turbine engine that is expected to be on-line for June 1995. Half of the money will be paid this year.

Belco paid out annual dividends of $1 a share in 1993 and 1992. A total of more than $4.37 million was paid out, up from just under $4.3 million for 1992. That reflects the increased number of common shares outstanding due to the 7 percent note conversions.

The company annually pays out roughly 40 per cent of the profits in dividends and re-invests the remaining 60 per cent in plant upgrades.

The high level of conversions of the 7 percent convertible notes in 1992 and the lower net earnings dropped the earnings per share, year over year, from $2.62 to $2.43.

But the share price during the year jumped almost 14.3 percent from $17.50 to $20. The share capital appreciation, together with the dividend, yielded a 20 percent return on shares purchased at December 1992 prices.