Intensifying price competition in the cruise sector will hit profitability at All Leisure Group for the remainder of the year and beyond.

The warning came as the company revealed that winter half-year losses have been trimmed by £3.3 million to £12.3 million for the period to April 30.

Cruise revenue was down by £2.1 million and escorted tours by £1.1 million in the six months.

The ships Minerva and Voyager lost 32 cruise days during the period due to dry dock maintenance.

All Leisure, which include Swan Hellenic, Voyages of Discovery and Hebridean Island Cruises, said: “The cruise industry is becoming increasingly competitive as new vessels are launched and the capacity within the industry grows.

“Consequently the industry is seeing increased levels of price competition which is expected to negatively affect the profitability of the group in the second half of the year and beyond.”

Executive chairman, Roger Allard, said: “I am pleased to report that the seasonal losses for the first half year have been reduced, despite the dry dock periods for both Voyager and Minerva, which reduced available sailing time.

“The impact of derivative currency hedging contracts on our results continues to be negative as historic contracts continue to unwind, and the losses incurred in this first half are likely to continue into the second half, depending on the key sterling-US dollar and sterling-euro rates.

“The outlook for our volume cruise brands – Swan Hellenic and Voyages of Discovery – is very challenging as a result of increasing industry capacity and the consequential effect on pricing and margins, together with the ongoing issues in the Black Sea region. Our niche, luxury Hebridean Island Cruises brand continues to perform very well, delivering increasing levels of profitability.

“The escorted tours business has suffered a decline in passenger bookings this year, partly driven by various geo-political events, but the underlying business remains attractive and I am confident about the future of the Travelsphere and Just You brands.

“With the company continuing to experience these difficult trading conditions the board anticipates that full year performance will be below expectations and now expects the business to make a small loss for the full year.”