UK ports and ferries operator P&O has unveiled a sharp dip in first-half earnings, but said it spied a strong profits recovery on the horizon.
Ferries have faced competition from budget airlines and Eurotunnel
Pre-tax profits were £30.6m, down from £53.4m at the same time last year, in line with market forecasts.
P&O has been selling properties and slashing jobs at its loss-making ferry operations as part of a shake-up.
Now it says it is "on track" to improve profits from its ferries by £50m a year from 2006 after restructuring.
The company was forced to rethink its strategy as budget airlines and the Channel Tunnel eroded its market share.
Over 1,000 job losses were announced in 2004 and P&O has since cut back on routes.
The final P&O voyage from Portsmouth to Le Havre will set sail at the end of next month.
P&O's property disposal programme is ahead of schedule, the firm said, and revenue from the sell-off is expected to reach £400m this year, ahead of its target of £325m.
In June, the company offloaded its 25% stake in Dutch shipping company P&O Nedlloyd, leading to a £187.9m one-off gain.
Group operating profit from continuing operations fell to £78.4m, down from £96.7m last year.
Strong growth at Asian ports had offset more sluggish economic conditions in the UK and Australia, the company said.
Losses were narrowed at its cross-Channel ferry operations, though its performance was hampered by disruptions at the French port of Calais.
Berthing problems at Calais meant 14% of sailings had to be cancelled. Passengers faced weeks of delays after a gangway rope collapsed.
Further problems were caused by striking SeaFrance crews who blocked access to one of the docks.
Meanwhile, higher fuel prices increased cost by £4m.
In July, P&O announced that the government was close to backing its plans for a £1.5bn container port and logistics centre near London.
P&O said earnings for the full year were on target to meet market forecasts.
"The overall outlook for the second half is positive," said chief executive Robert Woods.
"For the group as a whole, excluding property and container shipping, operating profit is anticipated to grow strongly for the full year compared to 2004."