Bermuda Container Line Ltd (BCL) reported that profits plunged by 41 percent last year as investment income fell dramatically.

The company, which brings in imports on the Oleander container ship, said net income fell by almost $2.5 million, compared to 2007, to $3.63 million.

And it expects 2009 to be a "difficult" year, with earnings likely to be impacted by reduced cargo volume, low interest rates for its cash investments and rising fuel prices.

However in 2007, the company made a gain of nearly $1.6 million from the sale of a subsidiary. Comparing earnings before this one-off gain, profits were down by 20 percent, or $895,000.

Net investment income plummeted by $1.09 million, or 83 percent, in last year's adverse investment environment.

"BCL was able to earn a small investment return in 2008 as it liquidated its investment portfolio before the dramatic fall-off in financial markets and all proceeds were invested in money market accounts with a variety of financial institutions," the company said in a statement yesterday.

Earnings from shipping operations increased in 2008, on a consolidated basis up $207,500 or 6.46 percent.

But the company has seen an 11 percent drop in container volume for the first quarter of 2009 and is expecting to be impacted by a reduction in construction-related cargo as the year progresses.

"Ro/Ro cargo volume was still positive in the first quarter but this was due to the current building projects in Hamilton," BCL said.

"As the construction association president noted earlier this month, once these projects come to completion later this year there are no new ones in the pipeline and so, we do expect a drop in Ro/Ro cargo volume later this year as well.

"In addition, investment income is very small as interest rates are at an all time low. The present effective interest rate on BCL's large cash holdings is less than 0.5 percent.

"Finally, fuel prices which have been stable at a low rate since the beginning of the year have recently jumped again, up by $100 per ton since mid-April. This increase price adds over $5,000 per week to the Oleander fuel bill."

Dividends paid to shareholders fell to $2.43 million or 81 cents per share, down 26 percent from 2007.