The Ascendant Group Ltd. boosted its consolidated net earnings by 6.5 percent or $357,049 during the first half of this year, despite a four percent drop in revenue over the same period.

The parent company of Belco, Bermuda Gas, PureNERGY Renewables, Belco Properties, InVenture and Sigma Corporate Services saw its net earnings increase to $5.86 million for the first six months of the 2010 financial year from $5.51 million in the first half of 2009.

Belco and Bermuda Gas both made positive progress in the first half of this year, however Ascendant's share price at the end of June was $14 or nine percent below that of the June 30, 2009 market price of $15.40. Yesterday, it was trading at $14.50 on the Bermuda Stock Exchange.

Meanwhile the company's book value rose 2.8 percent to $31.03 as at June 30, 2010 versus $30.19 a year earlier.

Belco's operating results for the first six months of 2010 show that revenue for electric sales decreased four percent or $4.4 million.

Fuel adjustment sales and expenses fell $6.4 million, as the average cost of fuel for the current period was significantly lower than the average of the first half of 2009. Fuel adjustment revenue is offset by identical fuel costs reflected in energy supply expenses.

On January 1, 2010, average tariff rate increases of 1.5 percent took effect, approved by the Price Control Commission and subsequently the Energy Commission, resulting in a $2.2 million rise in electric sales revenues.

However, this was offset by a decrease in kilowatt hour (kWh) sales of 595,043 kWh; 297.34 million kWh sold in 2010 compared to 297.93 million kWh sold in the same period last year, causing electric sales revenue to decline by $150,859.

The decrease is attributed to a 4.5 percent or 7.8 million kWh fall in sales to large commercial customers. Average consumption in the hospitality, retail and international business sectors was lower, as businesses sought to control costs in light of continued weak economic conditions locally.

Elsewhere sales to residential customers were up 7.3 million kWh or 5.9 percent versus 2009 due, in part, to an increase of 0.8 percent in the average number of residential customers compared to the first six months of 2009, as well as a five percent rise in average monthly consumption.

Overall operating expenses for the period were 4.6 percent lower than the first six months of 2009, largely driven by energy supply expenses, which fell $5.2 million or 7.5 percent.

In addition, material usage costs were down $391,356, as energy supply's major engine overhaul schedule for the first half of 2010 was far less intensive than for the same period in 2009.

This was offset by net increases of $1.3 million in other operating expenditures, such as maintenance contracts and outside contractor costs, as Belco entered into a five-year gas turbine service contract with Siemens Industrial Turbomachinery, effective from March 1, 2010. In addition, direct and indirect labour costs rose $496,700 as a result of increases in payroll taxes, labour rates, overtime and training.

Administration and general expenses were also up $382,540 over the opening six months of 2010. Approximately $324,195 was attributed to higher pension costs stemming from declines in returns and valuations of pension fund investments. Depreciation expense fell $214,301 versus last year, as a number of older generation assets reached the end of their established service life.

Bermuda Gas' net income increased $24,816 or 4.2 percent to $621,816 from $596,955 for the same period in 2009, mainly due to increased gas operation sales, which rose 13.3 percent, and appliance sales, which were up 11 percent.

PureNERGY incurred a loss of $239,535 for the first half of 2010 compared to a loss of $485,285 for the same period last year. While the company had seen growth in both solar domestic hot water and photovoltaic residential sales this year, that was offset by decreased photovoltaic commercial sales in an increasingly competitive market. PureNERGY also realised significant cost savings through improvements in operating and administrative processes.

Ascendant's property rental and development company, Belco Properties, experienced a decrease in net income to $84,662 from $126,720 over the corresponding period.

In their first year of operation, neither InVenture nor Sigma, which provides human resources and legal support services to Ascendant, have reported significant revenue. InVenture has been looking at entry into new industries through the existing core strengths of Ascendant, including engineering and project management.