Bermuda-based Stirling Cooke Brown Holdings Ltd. profits have continued to plummet, despite new management and attempts to improve the company's image.

Net income fell by nearly $3 million, going from $1 million in the first three months of 1999 to a net loss of $2.2 million for the same period this year.

The company reported a diluted net loss of $0.23 per share for the second quarter ended June 30, 2000, compared to diluted net income per share of $0.10 for the corresponding quarter of 1999.

The company blamed a difficult market and tough pricing in workers compensation for the fall in profits.

Stephen Crane, president and chief executive officer, said: "Despite adverse market conditions, we continue to make the management and structural changes required to return the company to profitability and enhance long-term shareholder value.'' The company, which has had its image dented by a stream of law suits last year saw its annual profits fall by $22 million from $16 million in 1998 to a net loss of $6.7 million for 1999.

Now losses seem to be accelerating. For the six months ended June 30, the company reported a net loss of $3.2 million, compared to net income of $4.6 million for the same period in 1999.

A release from the company said: "The US workers' compensation insurance market, in which Stirling Cooke conducts most of its business, continued to be extremely competitive throughout the quarter, and the company continued to experience significant pricing pressures in the market segments in which it operates. These difficult conditions resulted in reduced revenue and a shrinkage in operating margins.'' The company also reported that its Board of Directors has declared a quarterly dividend of $0.03 per ordinary share payable on September 6, 2000 to shareholders of record on August 14, 2000.

For the quarter ended June 30, 2000, total revenues were $10.5 million, a decrease of $10.1 million from $20.6 million in the second quarter of 1999.

For the six months, total revenues were $26.9 million, a decrease of $17.3 million from $44.2 million for the first six months of 1999.

Brokerage revenues decreased $6.9 million to $3.1 million in the second quarter from $10.0 million in the second quarter of 1999, and decreased $12.1 million to $6.5 million in the first six months of 2000 from $18.6 million in the same period a year ago.

The company said this decrease in revenues was primarily due to a diminution of business being brokered due to the significantly diminished reinsurance capacity for worker's compensation business.

The insurance revenues earned by the company's US-based insurance carrier increased by $0.3 million to $2.5 million in the second quarter of 2000, compared to $2.2 million in the second quarter last year, and increased by $2.1 million to $9.1 million in the first six months of this year, compared to $7.0 million in the first six months of 1999.

Reinsurance segment revenues declined by $1.0 million to $0.2 million in the second quarter of 2000, and declined by $2.5 million to $0.5 million in the first six months of 2000.

Stirling Cooke's shares were trading yesterday at $2 1 on the New York Stock Exchange. The company's 52 week high is $4 13/16 and has a year low of $1.

Stephen Crane