After years of losses, Gozo Channel yesterday announced a net profit of Lm273,000, which Government Investments Minister Austin Gatt attributed to the "tough decisions" that were made a couple of years ago.

The company's operating profit for the year which ended last September was Lm293,000. Although its operational costs increased by 23.1 per cent since 2002, it reduced its administrative costs by 17.8 per cent, chairman Joe Borg told a news conference.

In the year ending September 2004, the company made a net loss of Lm10,000. In the previous year the loss amounted to Lm989,000 and it was Lm853,000 for the year ending September 2002.

Dr Gatt said this year's results were due to the tough, controversial decisions taken two-and-a-half years ago. It had then been decided to increase tariffs, curb administrative expenses, rationalise the crew, use trips efficiently and draw up a public service obligation contract, through which the government was giving the company Lm1.5 million in subsidies.

It had been evident that Gozo Channel had to rationalise its operations to ensure it became financially viable and provide a social service to Gozitan residents while being one of the principal means of helping to expand Gozo's economy.

The decisions that had been taken were bearing fruit with the company making a modest profit. Had this not been the case, the company would not have been able to offer special winter fares which helped expand the Gozitan economy, that depended also on the Maltese market, the minister said.

Mr Borg said that in the year ending last September, Gozo Channel registered a gross revenue of Lm5,329,000. It carried 1,288,000 passengers, 2,000 fewer than the previous year; 411,000 cars, which was 9,000 below the previous year; and 23,000 commercial vehicles, the same number as in the previous year. The company's operating costs stood at Lm4,711,000, its administration costs at Lm453,000.

The price of fuel was one of the main reasons for the rise in operating costs, Mr Borg said. However, having installed slow starters on its vessels, drastically reducing consumption, the company managed to control the expense in this area.

In fact, while it used to guzzle 340 litres of fuel per trip in the year ending September 2003, it was using 261 litres per trip by last January.

Still, with the rise in the price of fuel, average fuel cost per trip as at the end of January 2006 had gone up to Lm68.94, from Lm61.50 at the end of September 2005 and Lm55.25 in the year ending September 2004.

Asked whether Cirkewwa would be an all-weather port once works were concluded, the minister said it would not. To transform it into an all-weather port, another arm was needed which would cost many millions of liri. The government believed there was no sense in investing this kind of money for about 40 trips a year, he said.

As for the termini at Mgarr and Cirkewwa, these were intended to offer comfort and would offer Gozo Channel a daily challenge since comfort did not come for free. They would cost money to operate and this cost had to be factored into the Gozo Channel costs, reducing the company's profits.

Asked whether the termini would mean another increase in the cost of tickets, the minister said that he was not saying they would.