Bermuda Aviation Services (BAS) continued to produce strong results despite the recession as its posted net earnings of $1.45 million for the six-month period to September 30, 2010, according to a letter to shareholders from group president and CEO Ken Joaquin.

The company's net earnings were down slightly from the $1.98 million recorded during the same period in 2009.

This was partly due to the damages settlement of $202,000 paid to BAS by the Bermuda Government, which contravening the firm's exclusive right to offer private jet services until 2014, by giving rival operator Sovereign Flight Support permission to provide such a service, as exclusively reported by The Royal Gazette.

BAS' operating earnings also fell from just over $2 million to $1.74 million over the corresponding period, with Mr Joaquin describing it as a "respectable result" given the state of the local economy, speaking to the management's continued focus on cost containment and efficiency during these tough times.

"Management believes that BAS is comprised of a solid foundation of diverse, legacy companies that will see it weather the economic climate and always provide good value for its shareholders," he wrote.

"For BAS it has been a six-month period where we have seen our revenue, in contradicting fashion, rise near six percent over last year," he said.

"This revenue increase has been driven solely by our subsidiary CCS Ltd. which has aggressively pursued sales on much more competitive margins, a necessary strategy in these challenging times. Although this strategy has consequently driven up BAS' consolidated revenues and direct costs, we have been able to contain our operating expenses over the prior year as we have strived to do more with less."

Mr. Joaquin said that ASB Ltd. had returned a modest profit for the six-month period - a result that had exceeded management's initial expectations - given the absorption of significant restructuring costs, new competition and continuing weak airline volumes, underscoring that the organisational enhancements instituted by management were driving the efficiencies the company was looking for.

BAS-Serco, Weir Ltd. and Otis Bermuda Ltd. all reported strong mid-year results, with BAS-Serco managing to duplicate the same robust performance that it had last year with net earnings in line with those of the prior period, he said.

Adding that despite IBC Ltd. recording flat revenue growth and an increased direct cost associated with air freight which eroded its net earnings compared to the previous year, Mr. Joaquin said that management was in no doubt that IBC was fundamentally a sound company and this ebb in earnings was a reflection of the broader local economy.

Admitting that CCS Ltd. had incurred a series of accounting errors, which despite having no cash impact on the company, he said that they necessitated adjustments that had caused a material reduction in the six-month net earnings of the company versus last year. But he added that management had acted to make organisational changes and redesign accounting processes to prevent the re-occurrence of similar issues.

"The next half of the year will be equally challenging, if not more so, for the local economy," said Mr. Joaquin. "Management is committed to remaining vigilant and seeking greater efficiencies and opportunities to strengthen BAS."