Interim Results To 30 June 2002

Key Points

• Turnover up 5% to €145 million
• Passenger cars up 15% to 174,000 cars
• Passenger numbers up 10% to 791,000 passengers
• RoRo freight volumes up 2% to 90,000 units
• EBITDA up 35% to €20 million
• PBT of €3.3 million (2001: loss of €1.7 million)
• EPS 10.4c (2001: loss 7.9c)
• Dividend increase by 20% to 6.84c
• Net debt down to €157 million (vs €187 million at 31 December 2001, and
  €214 million at 30 June 2001)

Interim Statement

Results

The Board of Irish Continental Group, plc (ICG) reports that in the seasonally weaker first half of the year, the Group achieved a profit before tax of €3.3 million compared with a loss of €1.7 million in the comparable period in 2001. EBITDA rose to €20.2 million from €15.0 million in the comparable period in 2001. Group operating profits rose from €4.1 million to €8.7 million while the net interest charge fell from €5.8 million to €5.4 million. Earnings per share were 10.4 cent (2001: loss of 7.9 cent) while the diluted earnings per share were 10.3 cent (2001: loss of 7.9c).

Turnover for the half-year grew by 5% to €145.2 million reflecting the recovery in passenger volumes following the Foot & Mouth Disease impact in the previous year.

Dividend

The Board has declared an interim dividend of 6.84 cent, an increase of 20% on last year's interim dividend. It is proposed to pay this dividend on 8 November 2002 to Shareholders on the Company's register at the close of business on 11 October 2002.

Ferries and Travel Division

The division comprises our ferry operations between Ireland and the UK and Continental Europe trading as Irish Ferries; our travel agencies, Tara Travel; and the chartering of vessels to other ferry companies.

Turnover in the division was €91 million (2001: €81.6 million), an increase of 11%, while there was an operating profit of €6.2 million compared with an operating profit of €2.4 million in the same period in 2001.

Irish Ferries

Our core tourist business, passenger cars, grew 15% to 174,000 while total passenger numbers in the half year grew 10% to 791,000 as the recovery from the impact of Foot & Mouth Disease the previous year continued. We have also benefited from the quality of our fleet on the Irish Sea with the modern cruise ferries m.v. "Ulysses" and m.v. "Isle of Inishmore" complementing our fast ferry m.v. "Jonathan Swift". In line with the market generally, our RoRo freight volumes were up 2% to 90,000 units compared with the same period in 2001.

Bookings on Irish Ferries website, "irishferries.com", continue to increase at an encouraging rate and now comprise 17% of passenger and car bookings.

The m.v. "Ulysses", the award winning car ferry, with the world's largest RoRo capacity, completed its first year of operation in March of this year with an impeccable 100% reliability record.

Tara Travel

Due to a continued difficult trading environment for the traditional High Street travel agent we are restructuring our agency division with the closure of 2 of our 7 London branches and the transfer of their business to the remaining outlets.

Chartering

The ferries, m.v. "Pride of Bilbao" and m.v. "Egnatia II", continued on bareboat charter to P&O European Ferries and Hellenic Mediterranean Lines respectively. On February 26th we announced the extension of the m.v. "Pride of Bilbao" charter for a further period of 5 years to October 2007. We have also chartered the m.v. "Isle of Innisfree" (to be named m.v. "Pride of Cherbourg") to P&O, for a period of 5 years from July of this year.

Container and Terminal Division

The division comprises our door to door and feeder services Eucon, Feederlink and Eurofeeders, and our container terminal in Dublin, DFT.

In the Container and Terminal Division turnover was €54.2 million (€56.3 million in the previous half year). There was a 6% increase in the volume of containers carried to 191,000 twenty foot equivalents ("teu") but the pricing environment remains competitive. Containers handled at the DFT terminal in Dublin were in line with the previous year at 113,000 teu. Operating profits rose from €1.7 million to €2.5 million as cost reductions took effect. At the start of July we completed the acquisition of Hudig & Kersten Continental Ireland Line (HKCIL), an "infill" acquisition which will complement our Continental container freight service, Eucon. HKCIL, which had been our slot-sharing joint venture partner on the Ireland-Continent route, brings additional strength to our sales network, particularly in the Dutch and Northern Ireland markets, and enhances our flexibility in managing our fleet and port network.

Cash Flow, Investment and Finance

Cash flow from operating activities amounted to €31.0 million in the half year, up from €24.7 million in the same period in 2001. Following the substantial investment programme of the last few years there was a return to maintenance levels of capital investment (€3.7 million in the half year). These factors, combined with favourable exchange rate movements, resulted in net debt at the half-year of €157 million, down €57 million on the same date in 2001 and €30 million lower than at the year end. Liquidity remained strong with period-end cash of €36.6 million, up from €20.5 million at the same point in 2001.

Deferred Taxation

Following the introduction of Financial Reporting Standard No. 19, Deferred Taxation, it is now mandatory to provide in full for deferred taxation. Historically, such taxation was not provided for as the tax deferral was expected to continue into the future. Consequently we have restated reported results and balance sheets for 2001, to reflect full provisioning under the new standard.

Deferred taxation has been calculated in accordance with current taxation legislation. The Finance Act, 2002, contains new optional rules in relation to taxation of shipping profits (tonnage tax), yet to be approved by the EU. Approval is expected before 31 December 2002.

Current Trading and Outlook

In the year to date, Irish Ferries' car carrying are up 8% on last year. Total passenger numbers are up by 2% reflecting some weakness in foot and coach passengers. RoRo freight volumes are in line with last year's carryings with a quieter than expected period of trading during the summer.

Our first half of the year confirmed the expected recovery from Foot & Mouth disease, while the freight market continued to grow, although at a slower pace than in recent years. In the second half to date, the tourism market has been somewhat less buoyant than expected and tourist car volumes have not yet returned to the levels of 2000, while the freight market appears to be reflecting a slowdown in the underlying economy. As against this we have additional charter income in the second half and are maintaining strong cost control.

Given our positive start to the year, our modern fleet and our robust cash flows, we remain confident on our prospects for the year as a whole.

T.C. Toner, Chairman
19 September 2002

Enquiries: Eamonn Rothwell Tel: 353-1-6075628
Garry O'Dea Tel: 353-1-6075628
Email: info@icg.ie
Website: www.icg.ie

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Irish Continental Group Plc
Consolidated Profit And Loss Account
for the 6 months ended 30 June 2002

* restated following the implementation of FRS 19, Deferred Taxation.

Statement Of Total Recognised Gains & Losses
for the 6 months ended 30 June 2002

Irish Continental Group Plc
Consolidated Balance Sheet
at 30 June 2002

Irish Continental Group plc
Reconciliation Of Movement In Shareholders' Funds
for the 6 months ended 30 June 2002

Irish Continental Group Plc
Consolidated Cash Flow Statement
for the 6 months ended 30 June 2002