Irish Cont. Regulatory News (ICGC)

29 Apr 2005 12:00

Irish Continental Group PLC29 April 2005 IRISH CONTINENTAL GROUP plc Chairman's Statement on Current Trading to the Annual General Meeting Trading in the first quarter of 2005 has been challenging. In the first 16weeks of trading, a period which includes the annual overhaul programme of thevessels, we have seen a weaker passenger market combined with a firmer freightmarket. In the passenger market our car volumes are down 4% year to date. The touristmarket into Ireland is facing perceptions of a high cost destination combinedwith substantially increased low fare air capacity from the UK, our principalmarket. In addition many new destinations are being served from the UK by lowfare air carriers. In the freight market our volumes are up 4%. Overall revenue within the Ferries Division is broadly unchanged while savingsin labour costs have been offset by increases in fuel prices. Within the Container Division conditions remain competitive, although thecommissioning of our terminal extension in 2004 is leading to improvedprofitability from terminal activities. Fuel costs remain subject to the world price for oil which has recently reachednominal highs. Based on current prices remaining unchanged our fuel bill acrossthe group would be Euro 6m higher than in 2004 which underlines the need forfuel surcharges. The competitive environment remains challenging. New operators have taken overtwo routes which had ceased operations at the end of 2004 (P&O's freight routebetween Rosslare and Cherbourg, and the Dublin - Liverpool passenger servicepreviously operated by Isle of Man SteamPacket). When combined with increasingair capacity into the island it is clear that a consistent focus on costreduction will be necessary in order for us to prosper. In this regard we have reduced the cost base on our service to France tointernational norms. Having received clarification this week from the LabourCourt and the Union involved we have accepted the recent Labour CourtRecommendation on outsourcing. This recommendation also calls for anindependent review of our Irish Sea cost base. This review will commenceshortly. John B McGuckianChairman29 April 2005 This information is provided by RNS The company news service from the London Stock Exchange