Irish Continental Group (ICG) has traded in line with expectations over the past few months, with the passenger ferry market staying weak and freight trade holding up well. Una McCaffrey reports.

Shareholders in the ferry group were told at yesterday's annual general meeting (agm) in Dublin that car volumes were down 9 per cent year-on-year in the four months to the end of April. Chairman John McGuckian said the performance had been ahead of the market, with the overall decline reflecting competition from air traffic.

ICG chief executive Eamonn Rothwell later told reporters that the firm had increased its share of the Irish Sea tourism market from 46 to 48.5 per cent over the first quarter because of its lower prices.

He accused the Government of "distorting the marketplace" by offering financial support to regional Irish airports and, by extension, regional airlines.

"The shipping sector is overlooked by Government policy," he said.

Mr McGuckian had earlier told the meeting that ICG's RoRo freight volumes in the first quarter were ahead by 4 per cent, broadly in line with the market. Volumes in the firm's container and terminal division are "in line with 2005," he said.

The chairman highlighted climbing oil prices as an issue for the firm, with fuel costs up by €2.5 million on the first quarter of 2005. ICG already applies a fuel surcharge of €3 per passenger and €13 per truck.

Mr Rothwell said an increase of another 10 per cent in oil would mean the firm would have to look at higher surcharges.

Shares in the company fell back yesterday as the market failed to find sufficient positive news in the agm statement. ICG closed at €11.05, down 45 cent.

John Sheehan, an analyst with NCB, said he was reducing his forecasts for the firm for 2005 and 2006 to reflect particular weakness in the tourism market.

"But for last year's rationalisation, a severe profit warning would be required," he said.

ICG aroused controversy towards the end of last year when it outsourced crews on its ferries and made about 500 staff redundant. The restructuring cost €29 million, with about 15 shore-based redundancies yet to come.

Shareholders also heard yesterday that ICG had agreed with the Port of Belfast to develop a new container terminal at Herdman Channel in Belfast.

The project, which will not lead to significant capital expenditure, will allow ICG to handle 40,000 containers per year. This is just less than a third of ICG's capacity in Dublin.