P&O pledged to achieve a significantly improved result this year after profits fell sharply in 2002.
The group saw underlying profits slump to £9.2m from £160m a year after a downturn at its shipping joint venture P&O Nedlloyd.
The weakness, coupled with a profits decline in P&O's property business, masked an improved performance from the company's container terminal and ferries businesses, which both achieved a significant increase in profits.
Despite the profits fall and economic uncertainty, chairman Lord Sterling said the prospects for P&O remained bright.
He added: "We are seeing a continuation of the positive trends that were present in the second half of 2002. We have made a good start to the year. It is early days but on the basis of current trading we expect to achieve a significantly improved result for 2003 and to move further ahead in 2004.''
Shares rose more than seven per cent following the update as investors also cheered the company's decision to maintain its final dividend at 9p a share and leave its policy on future payouts unchanged.
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