Harsh trading conditions and staff problems ate into profits at ferry company Irish Continental Group (ICG) last year.

Results posted by the firm yesterday show that its profits were almost halved after €11.9 million in exceptional charges took their toll. The performance came as turnover fell back by almost 4 per cent to €293.3 million, with loss of sailings through industrial action accounting for much of the decline.

ICG was hit in December by a 10-day strike which forced it to cancel sailings to Britain. NCB analyst, John Sheehan, estimated yesterday that profits at the company could have grown by up to 5 per cent without the strike.

ICG chairman John McGuckian yesterday described the company's results as "resilient" in an "extremely difficult" marketplace. He was cautious on the 2005 outlook for the firm, noting that trading to date had been in line with 2004.

Pretax profits before exceptionals at ICG fell by about €1 million last year to €21.1 million last year. Operating profits before exceptionals were down by 8 per cent at €26.5 million.

The bulk of the exceptional charges came within Irish Ferries, where ICG was hit by restructuring costs of €9.9 million. Most of this was due to redundancy charges of €8.2 million. Ship officers this week have launched a new strike ballot on the matter.

Strong cashflow helped the firm to reduce debt by 6 per cent to €117.9 million, and to spend almost €8 million on buying back its own shares last year. It also returned €5.5 million to shareholders by redeeming shares.

The firm said yesterday that it would redeem one previously-issued redeemable share per ICG unit for 17.25 cents. When added to the interim payment, this lifts the full-year payout to 25.875 cents, up from 22.5 cents in 2003.

Davy analyst, Stephen Furlong, suggested yesterday that the company could consider returning some cash to shareholders through a special dividend if it can not find suitable acquisitions on which to spend its money.

Mr Rothwell last night ruled out all options apart from acquisitions but declined to speculate on particular opportunities. In relation to de-listing, he said it would be extremely hard to raise bank funding for an ICG buyout in the current climate for industrial relations. The firm's shares closed 10 cents lower at €11.05 last night.