Winter half year losses at All Leisure Group almost trebled from £4.2 million to £11.2 million amid “extremely challenging” market conditions.

The operator of Swan Hellenic, Voyages of Discovery and Hebridean Island Cruises said: “Expectations are that 2012 cruising levels will be depressed but measures taken position All Leisure well once the adverse economic, commodity and exchange rate environment finally abates.”

Revenue in the six months to April was affected by the ship Minerva being taken out of service for refurbishment but the company said this will improve yields this summer.

Executive chairman Roger Allard said the UK cruise market has “never been so challenging” following the Costa Concordia disaster in January. Discounting has afflicted the market in the wake of the accident.

The Concordia tragedy “overlaid against the backdrop of continuing geo-political events, challenging market conditions, including reduced discretionary customer spending, persistent low interest rates, increased oil prices and the eurocrisis, have conspired to make an already challenging market place even more demanding, especially for the cruise sector of the overall travel market,” said Allard.

The results were affected by the group only operating one ship in the winter.

However, he pointed to the £4.2 million acquisition of Page & Moy in May as bolstering the group.

“During these extremely challenging market conditions rather than batten down the hatches we have taken steps to ensure the medium term future of the business.

“Namely, the acquisition of the tour operator Page & Moy brings to the business a database of circa four million new customers and will transform our future revenue streams, as well as continuing to invest in the ships’ infrastructure and ensuring our guests have excellent holidays.”

He added: “We believe that the measures we have taken will mean that, although 2012 results for cruising will be below expectations, we remain confident that shareholders will see a significant improvement in returns once the adverse economic, commodity and exchange rate environment finally abates.”

The ongoing political unrest in the Arab world continued to impact Discover Egypt’s business, with revenues falling by 21% on 2011 to £3.2 million, Allard said.

“However, through the management of commitment, Discover Egypt has continued to trade profitably albeit, the achieved margin has fallen by 22% on 2011. Despite the political situation in Egypt, passenger volumes are similar to those achieved in 2011.”