Bermuda-based Sea Containers Ltd., the passenger and freight transport operator, reported a net loss of $16.8 million after the weak US dollar compounded losses in the company's ferry unit.

The company, which also leases containers, made a loss during the first quarter of 2003 of $10.3 million. The losses were attributed to seasonal losses in the company's ferry businesses, which has Silja as the largest unit, which had operating losses of $5.5 million, compared with $6.8 million in the same period a year earlier.

"These losses, when translated into US dollars, were exaggerated by the 17 percent weakening of the US dollar against the euro in the past year and this effect is expected to reverse out in the main earnings third quarter period," said the company in a Press statement.

Other ferry operating losses of $8.7 million did not have the benefit of $2.7 million earnings in the first quarter of 2003 from the Isle of Man Steam Packet Company as this business was sold in July, 2003.

The losses were equally exaggerated by the weakness of the US dollar against sterling and they too are expected to reverse out in the third quarter main earnings period. Savings on interest costs on debt repaid exceeded the earnings loss from the Steam Packet sale.

James Sherwood, the company's president, said that non-recurring items in 2003 and currency translation effects made comparisons rather difficult with 2004.

"Actually, the underlying performance of all divisions is quite good," he said. "Silja had a better first quarter than last year partially due to a milder winter in the Baltic, Hoverspeed's losses were reduced due to the shift to seasonal-only operation. Only SeaStreak performed worse due to ice conditions in New York harbour in February. Two of Hoverspeed's 7 vessel fleet have recently gone out on profitable charters."

During the first quarter of 2004, the company reported revenue of $378 million, compared to a revenue of $351 million in the year earlier period.

GNER's operating profits were $11 million compared with $20.7 million in the year earlier period, however, the year earlier benefited from a non-recurring gain of $11.5 million on the 'Network Change' settlement negotiations with Network Rail, following the UK Rail Regulator's ruling in GNER's favour in March, 2003, so excluding this non-recurring gain GNER's performance was actually $1.8 million ahead of the prior year, the company said.

The company's share of GE SeaCo's operating profits was $6.8 million, up 55 percent from $4.4 million in the first quarter of 2003. All container activities, including the company's share of GE SeaCo, generated operating profits of $9.5 million, up 11 percent over the prior year period.

Other activities reported a loss of $1 million at the operating level compared with a $0.2 million profit in the year earlier period. This difference was largely due to reduced property sales, the company said. Although agreement in principle has been reached to sell more of the company's property interests in Folkestone and Newhaven, these sales are now only likely to be completed in the second or possibly third quarters.