New ranges include a tie-up with wine producer Robert Mondavi

Losses narrowed to 189.4m euros (�129m; $239m) from 244.8m euros the year before, but the Irish firm said the result was still "disappointing".

Turnover was boosted by the acquisition of Royal Doulton last year but sales remained weak in the UK, US and Japan.

Nevertheless, the firm said it had made progress in revitalizing its business.

Cost cutting

The firm is aggressively cutting costs in an effort to boost investment in new products and marketing.

Earlier this year it said it would close its earthenware factory in Staffordshire with the potential loss of 300 jobs, the latest in a number of manufacturing sites to disappear.

We believe our transition back to profitability is gaining momentum Peter Cameron, Waterford Wedgwood chief executive

The firm expects its financial performance to improve this year, thanks to cost savings and confidence behind a number of new product ranges.

"2006 was a year of unacceptable losses for Waterford Wedgwood," said chief executive Peter Cameron.

"However, we believe our transition back to profitability is gaining momentum given our new and exciting ranges."