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.

Operating profits at the ports division increased to £71.4m compared with £58.4m last time. P&O said international trade was continuing to grow strongly and that this would help expand the business further.

The London based group jointly owns Southampton's Container Terminal with docks' owners and operators Associated British Ports, and employs more than 100 people at the site.

The results for the six months to June 30 included a loss of £65.7m relating to the sale of half of its stake in container venture P&O Nedlloyd - one of Southampton port's major customers.

P&O also announced the £49m sale of the Manchester Evening News Arena to the American owner of London's Dome.