Bermuda Aviation Services Ltd’s profits increased 4.5 percent to $2.5 million in the financial year 2011 after adjusting for an extraordinary gain of $3.1 million recorded in 2010 arising from a settlement with Government.Under the terms of the settlement Government was ordered by Bermuda’s Supreme Court to pay more than $445,000 in damages and costs for contravening the company’s exclusive rights to offer private jet services at LF Wade International Airport. In a separate agreement to waive its rights, BAS was compensated $2.7 million by Government, electing to receive a lump sum of $1.75 million with the remainder paid in annual rent relief of $200,000 and yearly lump sum payments of $50,000 between 2010 and 2013.Net income for 2010 was $5.5 million, while income from operations for 2011 was $2.5 million, up from $2.4 million the year prior.Revenue also rose to $52.6 million for the year from $50.5 million during the previous 12 months, however direct and operating expenses climbed $2.1 million from $48 million to $50.1 million over the same period.Meanwhile assets grew to $47.8 million from $46.3 million, while liabilities also increased from $8.5 million to $8.6 million in 2010 and 2011 respectively.Shareholders’ equity rose to $39.2 million in 2011 from $37.8 million a year earlier.In his report, BAS chairman Michael Darling said that the company had performed well despite the recession and had proved its resolve and adaptability during thee tough times.He said that BAS’s conservative fiscal approach had been rewarded in weathering the economic storm, taking the necessary steps such as reducing its annual dividend to 23.5 cents per share from 34 cents per share in the interests of the company in order to preserve capital and controlling operational costs.“This year, all of the companies of our group contributed positively to BAS’s net earnings,” he said.“BAS-Serco and Weir, for the second consecutive year, have been our over achievers while CCS, IBC and Otis have also had solid performances this year.“Management’s efforts have seen ASB return to profitable form but this member of our group will continue to be challenged by many external factors not within our control.“Fortunately, as we have grown, our strength has come from our diversity and in fact, very little of what we do is now based in aviation.“I believe it is safe to say that the future of BAS lies beyond the scope of this narrow business segment.”Mr Darling said that while he envisaged further challenges ahead, BAS was well placed to take advantage of any opportunities that arose.Ken Joaquin, group president and CEO of BAS, attributed the results to “foresight, forward-planning and decisive action” in his management report, with a focus on cash control and cost containment at the same time as providing value for money over the past two years.He said that the company had managed to achieve an overall reduction of approximately 8.5 percent in its consolidated operating expenses, while consolidated gross revenues were up more than 4.2 percent over the prior year surpassing $52.6 million, driven mainly by CCS in the IT product market through its high sales volume. However CCS’s consolidated net margin was down due to a highly competitive business sector.“As we enter the first quarter of the 2012 fiscal year, there is a strong expectation that the local economy will continue to be sluggish thereby diminishing opportunities for strong sales figures and BAS’s consolidated revenues are anticipated to contract accordingly,” he said.“We believe our continued focus on cost constraint will continue to allow BAS to fare well in the current economic climate.”Mr Joaquin said that ASB (Aircraft Services Bermuda Ltd) reported a modest profit compared to a loss the previous year, but the reality was that constantly declining commercial airline volumes and competition from a rival airline handler, with a lower non-unionised cost base, would always prove to be a challenge.He said that Weir continued to do well despite the current economy and was only slightly down on the year prior.BAS-Serco, said Mr Joaquin, had also fared well and was continuing to expand its services and generate new business opportunities, exceeding budget expectations and on a par with the previous year’s strong set of results. However, he was wary of new start-ups looking to compete in the facilities maintenance market and said the subsidiary would have to maintain its full value proposition.Turning to IBC, he said that as the economy has contracted and people became more conscious of where they spend their money, the company’s revenue base had shrunk similarly, but it had produced satisfactory results due to cost containment and would be poised to take advantage of any opportunities when the economy turned.Mr Joaquin said that Otis had held up well despite a drop in earnings as construction and development work slowed down with fewer new equipment parts were sold and a few account debts were written off as a result of customer delinquency on payments.CCS exceeded budgetary expectations and the previous year’s performance by five percent and 11 percent respectively, while its revenue was 21 percent higher over the same period, despite the sales coming at the cost of thinner margins, he said.And with the IT industry becoming fiercely competitive and outsourcing on the increase from centres across the Americas and Asia, Mr Joaquin said that CCS was focused on remaining relevant to the local market through its value and range of services.“Opportunities and change in this economic axiom are almost synonymous in that in order to seize the moment or to tackle the next venture by definition one must be willing to make a change,” he said.“It is with that mindset that management is looking at the local economy, reviewing the business sectors in which BAS operates and asking critical questions.”He continued: “Management is certain in their knowledge of what BAS is about and is confident in what BAS is becoming and as such the answers to the questions are clear.“Consequently, we are excited by the opportunities for BAS and are keen to continue to deliver the value and results our shareholders have come to expect.”