P&O has reported operating income of 108.5 million pounds, or approximately $174 million, for its cruise division, consisting of Premier Cruises and P&O Cruises, for the six-month period ended June 30, 1999, compared to 90.7 million pounds, or approximately $145 million for the same period last year.

Commenting on the results, P&O Chairman Lord Sterling said in a prepared statement that the Canbbean and Alaska have been excellent this year, and that Europe has been strong although the conflict in Kosovo had an effect on bookings earlier in the year.

He also said that despite a 13 percent increase in capacity across the division as a whole, "We are fully booked with average yields, in line with the high yields achieved last year. Unit costs are continuing to be reduced as capacity increases and we introduce new, more cost-effective ships."

Next year, the cruise division will see a 16 percent increase in capacity, somewhat higher than for the industry as whole, according to Lord Sterling. However, he said that bookings and yields to date were strong, indicating that 2000 will be another good year.

Nevertheless, P&O is actively considering opportunities for moving into countries where cruising is relatively undeveloped but which have high growth prospects, Lord Sterling said. Continental Europe in particular has the hallmarks of a major new market, he said, noting how the company also has plenty of cash -­ from the sale of assets - to spend on acquisitions.

Lord Sterling emphasized that the "future strategy would be to continue to focus on three core businesses - cruise, ferries, ports and logistics."

P&O has previously reported 3,529,262 passenger cruise days for the first six months of 1999, which translates into $49.30 in operating income per passenger day for the first six months of 1999, compared to 2,857,783 passenger days and $50.73 in operating income per passenger day for the same period last year.

Overall, P&O reported net income of 140.6 million pounds, or approximately $225 million, for its cruise, ferry, ports and logistics, cargo shipping, property and related business, on revenues of 4.1 billion pounds, or $6.6 billion, for first six months of 1999, compared to net income of 103.8 million pounds, or $166 million, on revenues of 3.7 billion pounds, or $6 billion, for the same six months in 1998.

P&O is in the process of spinning off about two billion pounds worth of non-shipping assets in order to concentrate on its so-called core businesses.

P&O has nine cruise ships on order for delivery from 2000 through 2004 at a total cost of 2.3 billion pounds, or $3.7 billion.