JOINT owners of Southampton container terminal P&O sailed into troubled waters by announcing that half-year results were in the red.

The ferry arm of the ports and shipping group continues a long spell in turbulent conditions, driving losses up to £6.1m, approaching double last year's £3.3m total in the minus column.

P&O, which runs routes to Cherbourg, Le Harve and Caen from Portsmouth, said it was suffering from strong competition by rivals on cross-Channel routes.

The growth of low-cost airlines and, more recently, increases in French tobacco duty have also taken a bite out of profits. P&O said revenues from on-board sales were down 21 per cent as a result of this hike in taxes.

A spokesman said: "P&O ferries is continuing to experience difficult market conditions, particularly for the tourist business."

The company is due to announce a wide-ranging review of the ferries business in September in a bid to revive its fortunes.

However, P&O said a good performance by the ports business helped it more than double operating profits on continuing operations to £113.1m.

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