Interim Results To 30 April 2001

KEY POINTS

• A strong performance in first four months offset by decline in March and April due to the impact of Foot and Mouth Disease on passenger traffic in the Ferries Division.
  
  
• Improvement in Container & Terminal division due to the elimination of unprofitable lines.
  
  
• Introduction in March of €100 million cruise ferry m.v. "Ulysses", almost doubling
  freight capacity of Dublin - Holyhead route. Initial results very encouraging.
  
  
• Upgrade of Rosslare/Pembroke route with transfer of 1997 built 122 truck m.v. Isle of Inishmore. M.v. Isle of Innisfree released for charter.
  
  
• Some uncertainty regarding ongoing residual impact of Foot & Mouth Disease on summer travel.

INTERIM STATEMENT

Results

The Board of Irish Continental Group, plc reports that in the seasonally weaker first half of the year, the Group recorded a loss before tax of €7.2 million compared with a loss of €4.7 million in the comparable period in 2000. The loss per share was 27.4 cents (2000: loss per share of 17.9 cents) while the diluted loss per share was 26.8 cents (2000: loss per share of 17.3 cents).

Turnover for the half-year grew by 1% to €124.3 million reflecting a combination of yield gains in most areas of the business offset by weaker passenger volumes in the last two months of the period due to the impact of Foot & Mouth Disease on travel between the UK and Ireland.

Dividend

The Board has declared an interim dividend of 5.70 cents, an increase of 20% on last year's interim dividend. It is proposed to pay this dividend on 31 August 2001 to Shareholders on the Company's register at the close of business on 10 August 2001.

Ferries and Travel Division

Turnover in the division was €67.9 million (2000: €67.7 million) while there was a seasonal operating loss of €2.4 million compared with an operating profit of €0.3 million in the same period in 2000.

Irish Ferries

Total passenger numbers in the half year fell 9.3% to 551,000 (passenger cars down 6.7% to 120,000) as Foot & Mouth disease impacted in the latter two months of the period. Average yields have risen, as the price rises implemented to compensate for the loss of duty free and fuel increases take effect. RoRo freight volumes were up 5% to 86,000 units compared with the same period in 2000, with higher growth on the Dublin/Holyhead route (up 7.5%).

Bookings on Irish Ferries website, "irishferries.com", continue to increase at an encouraging rate and are now running 83% ahead of last year at the same point.

The m.v. "Ulysses", the car ferry with the world's largest RoRo capacity, was introduced in late March and has proved very successful, particularly in the freight market. The vessel was awarded the World's "Most Significant Ferry" at the biennial Cruise & Ferry awards held in London in May of this year, despite stiff competition from newly built ferries from other leading ferry companies.

Travel Services

During the half year we launched wannabeinireland.com in the UK market, complementing our existing Tara Travel brand. We also introduced a business travel service "ICG Travel", with outlets in Dublin, London and Birmingham focussing on a high quality service to the corporate sector. Trading however, has been impacted by Foot & Mouth disease given the business's concentration on travel to Ireland.

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.

Container/Terminal Division

In the Container and Terminal Division turnover grew just under 2% from €55.7 million to €56.7 million. There was a 5% decrease in the volume of containers carried to 180,000 twenty foot equivalents ("teu") due to the elimination of unprofitable routes while average yield per teu rose 4%. Operating profits rose from €0.2 million to €1.4 million due to the refocusing on profitable services and the yield enhancement programme. Containers handled at DFT terminal in Dublin fell 3.4% to 118,000 teu due to the elimination of short sea traffic in order to concentrate on more remunerative Continental traffic.

Investment and Finance

During the period the Group invested €91.1 million, including €83 million on the completion of m.v. "Ulysses". Depreciation in the period was €10.7 million, resulting in EBITD of €8.3 million. As a result of the investment programme, seasonal trading patterns, and exchange rate movements, net debt at the half-year was €208.3 million, €53.2 million higher than at the same date in 2000. Liquidity remained strong with period end cash of €21.2 million.

Maritime Policy

We have been making representations to government on the need for a tax regime consistent with the "tonnage tax" regime enjoyed by many of our competitors. We will not be able to continue to fly the Irish Flag indefinitely if our tax regime is more onerous than that of our competitors who are free to trade into Irish ports while enjoying the benefits of other EU countries' tonnage tax regimes (which effectively represent zero corporate tax). We acknowledge the representations on behalf of the Irish Shipping Industry made by the Irish Maritime Development Office and remain hopeful of a satisfactory resolution.

With regard to policy on ports it is a concern to us that in a period when ferry companies in general, not only ICG, have suffered declining profitability as a result of duty free abolition, high fuel costs and government restrictions on travel to prevent the spread of FMD, that port charges, which are largely non negotiable (due to the local monopoly powers enjoyed by ports), continue to place an unrealistic burden on the ferry industry generally.

Current Trading and Outlook

We had a very positive start to our financial year. In the first four months, November to February, our passenger car number were up over 5% and our RoRo freight volumes were up 7%.

We were then affected by the widespread outbreak of Foot and Mouth Disease in the UK and, subsequently, the smaller number of cases in the Republic of Ireland. The restrictions on events in Ireland together with the governmental advice on travel between Ireland and the UK resulted in a sharp reduction in our passenger car carryings on the Irish Sea in March and April which fell by 21% and 26% respectively. This trend continued into May with our car carryings on the Irish Sea down 22%, albeit at substantially higher yields. The first three weeks of June have now shown a welcome reduction in the impact, with traffic down only 9%, again mitigated by higher yields.

For the financial year to date Irish Ferries car carryings are 172,000 (9% less than last year), passengers 793,000 (10% less than last year) and freight up 7% to 110,000 units.

We are of the view that, notwithstanding the adverse impact such a development as Foot and Mouth disease has had on an extremely open and tourist focussed economy as Ireland's, that we, in ICG, have the correct infrastructure in place to take advantage of the recovery which now appears to be under way. We therefore view the matter as a once-off issue, albeit one which, because it occurred during a key booking period, will impact on the outturn for 2001 as a whole. On current estimates profits for 2001 will be lower than in 2000.

The introduction of the new 50,000 tonne cruise ferry m.v. "Ulysses" released the m.v. "Isle of Innisfree" for charter. Contact is ongoing with a number of parties with a view to conclusion of a charter. The performance of m.v. "Ulysses" in its first few months has more than met expectations. In its first 3 months of service the vessels freight carryings have been up 15% on the same period in 2000. The advent of the m.v. "Ulysses" has enabled us to transfer our 1997 built Isle of Inishmore to Rosslare Pembroke route. This will give an additional 20% in freight capacity on that route.

T.C. Toner, Chairman
28 June 2001

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

IRISH CONTINENTAL GROUP plc
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the half year ended 30 April 2001

STATEMENT OF TOTAL RECOGNISED GAINS & LOSSES
for the half year ended 30 April 2001

IRISH CONTINENTAL GROUP plc
CONSOLIDATED BALANCE SHEET
at 30 April 2001

IRISH CONTINENTAL GROUP plc
RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
for the half year ended 30 April 2001

IRISH CONTINENTAL GROUP plc
CONSOLIDATED CASH FLOW STATEMENT
for the half year ended 30 April 2001

IRISH CONTINENTAL GROUP plc
NOTES TO THE INTERIM STATEMENT
for the half year ended 30 April 2001

It is not practical to analyse trading profit or net assets by geographical area. Turnover excludes intra Group transactions and value added tax.

2. Dividend

The interim dividend of 5.70 cents per share (2000: 4.75 cents) has no associated tax credit.

3. (Loss) / earnings per share

The calculation of basic (loss) / earnings per share is based on a loss of €7.2m (2000: loss of €4.7m) and 26.5m shares (2000: 26.3m) being the weighted average number of shares in issue during the period.
Diluted (loss) / earnings per share is computed in accordance with FRS14 and is based on diluted weighted average shares in issue of 27.1m (2000: 27.1m)

4. Reconciliation of net cash flow to movement in net debt

Copies of the Interim Statement are being sent to all shareholders. Copies may be obtained from the registered office of the Company, Ferryport, Alexandra Road, Dublin 1.