Times are tough for ferry firms

The company made a pre-tax loss of �6.1m ($11.2m) for the six months to 31 June, compared with a �3.3m profit for the same period last year.

But an upgrading of its full-year profit forecasts saw P&O shares rally.

Competition from low-cost airlines and the Channel Tunnel, however, continued to undermine its ferry operations.

The company operates 27 container terminals and has logistics operations in 18 countries.

With the economy looking stronger, P&O said it expected container shipping volumes to grow this year, but it did not expect any turnaround in its loss-making ferries arm.

Ferry review

The results are the first set since Robert Woods took over as P&O chief executive.

We are confident that the ferries review would demonstrate our determination to put that business right P&O chief executive Robert Woods P&O's share price

While P&O's ferry arm reported a �25.1m loss, the situation was much rosier at the group's ports business, which saw an operating profit of �71.4m.

That helped P&O to more than double operating profits on its ongoing operations to �113.1m.

Sales for the group fell to �1.67bn from �1.82bn in the first half of 2003.

Mr Woods said the ports results were "excellent", and that he was "confident that the ferries review would demonstrate our determination to put that business right".

P&O is due to announce the results of a review of its ferry business at the end of September,

Spanish sale

P&O also announced that it is to sell its exclusive La Manga holiday resort in Spain.

A regular home to the England football team before major tournaments, it has been put up for sale with an estimated price tag of more than �100m.

P&O also revealed that it has sold the Manchester Evening News Arena concert and exhibition hall to American firm Anschutz Entertainment Group for �49m.