Rental firm Avis Europe has posted a 73 per cent drop in first-half profits after competition eroded prices and the Iraq war hurt demand.
"Market demand showed signs of recovery from the second quarter with the exception of long-haul travel, although prices were still weaker than prior year," chairman Mr Bob Reid said in a statement, adding that the corporate market had stabilised.
Avis Europe posted pre-tax profits before exceptionals and goodwill amortisation of €14 million for the six months to the end of June, sharply down from the €51.5 million last year but still within market expectations.
Sales fell by 5.5 per cent to €527 million, and the interim dividend was cut to 1.3 pence per share from two pence as previously advised by the company.
"Overall, we expect full year revenues, excluding Budget, to be 4 per cent to 7 per cent lower than 2002, in line with our trading update in June," Mr Reid said.
Avis Europe chief executive Mr Mark McCafferty announced he would leave the company early next year to take up other opportunities, including work in the private equity market.