PORTS operator P&O said it was confident it would keep any economic slowdown at bay as it posted a 12 per cent rise in full-year profits.

The company, which last October floated off its luxury cruise line P&O Princess Cruises, runs container ports in 16 countries as well as logistics and ferry operations.

P&O's chairman, Lord Sterling, said the group's Ports division had an excellent year in 2000 with operating profits jumping 40 per cent to £102.5m.

He said he was confident the performance could be repeated this year, despite concern over the impact of a slowdown in the US and Japan.

Lord Sterling said: "It's all too easy to get affected by some sort of panic. We have to be careful and ask is this really what is happening?

"There was a softer January, but last month traffic improved, particularly in European trade.

"What we are not going to do is take much note of the experiences of the City. Our businesses are going well."

P&O reported a pre-tax profit for the year to December 31, of £269.1m before exceptional costs, compared to £239.5m the year before.

It floated P&O Princess Cruises to focus on its core logistics and transport divisions.

Operating profit in P&O's Trans European, Contract Logistics division rose 17 per cent.

However, the group's ferries division was hit as expected by the decision to abolish duty free. Operating profit slumped from £60m to £20.1m, while higher fuel prices added a further £21m to the division's costs.