P&O Ferries expects to head back to profitability this year

P&O Ferries expects to be headed towards profitability as early as this month after sacking about 800 seafarers last year to introduce a more flexible staffing model.

In its latest Companies House filing for its 2021 results, the Dubai-owned firm said its forward-looking base case scenario was to recover to “positive earnings before interest, tax and amortisation generation in April 2023”.

P&O forecast that its tourism market, which was heavily hit by the pandemic and recession, would improve over the next five years with freight volumes recovering next year. The company is planning to pass on “significant price increases” in both tourism and freight segments because of high inflation levels last year.

However P&O also warned that under a “severe trading downside scenario”, planned European post-Brexit checks at ports could limit travel, resulting in a possible 11 per cent decrease in tourist volumes this year and a 9 per cent reduction in freight volumes.

P&O losses ballooned to £375.6mn in 2021 from £105.3mn in 2020, a shift it said was behind its decision to make 786 employees redundant last year. The company reiterated that “the actions taken were necessary for the long-term financial health of the business”. It acknowledged that the sackings were “perceived negatively” but maintained that the public sentiment would “gradually recover”.

The ferry operator triggered a political outcry in March last year when it unlawfully sacked about 800 UK-based crew with no notice, some on a video message. P&O’s chief executive Peter Hebblethwaite admitted the company broke employment law over the sackings and instead paid off staff with enhanced redundancy packages.

The filings showed that the redundancy packages cost £36.5mn.

The firm’s directors said in the filing that there was “a less than remote possibility” of a financial penalty arising from a continuing civil investigation by the UK’s Insolvency Service, which last year decided not to launch criminal proceedings against P&O over its sackings.

RMT general secretary Mick Lynch said that allowing P&O Ferries and DP World “off scott free is a profoundly dangerous trend for all workers in the UK and anywhere DP World’s subsidiaries operate”.

P&O said it was working hard to return to long-term profitability in what it described as a highly competitive market.

In the first three months of 2023, P&O said it carried 45 per cent of passenger ferry crossings between Dover and France, more than its competitors.