Eurotunnel - first profit

[John Ashworth]

First profit for Eurotunnel in 20-year history

David Gow in Brussels
The Guardian, Wednesday April 9 2008

Eurotunnel, the cross-channel shuttle operator, hailed a break with its debt-ridden past yesterday by declaring its first profit in its 20-year history.

Groupe Eurotunnel, the new French company forged last year after a restructuring of its huge debt, said it had earned a pro forma net €1m (£800,000) in 2007 and would pay its first dividend next year.

Jacques Gounon, chairman and chief executive, said: "I believe that we will have a significant net profit without any exceptionals. I consider that it is my role to propose in 2009 a dividend." He added that Eurotunnel hoped to announce a rights issue within a month, which would raise up to €900m to pay creditors.

"2007 shows that the new [group] is nothing like the old ... The results are due to remarkable levels of performance and to strict management of operating costs. They also benefit from the massive reduction in debt achieved through the financial restructuring," he said. The debt crisis, during which Eurotunnel suspended payments, ended last year in a deal between creditors and angry shareholders brokered by Goldman Sachs. It halved the debt and rescued the company from bankruptcy.

Eurotunnel also gained from a big rise in traffic between Britain and the continent, with first-quarter revenues jumping 15% this year to €187.6m. Gounon said: "Now we finally have the high-speed [UK rail] link ... we are getting the passenger numbers we should have had 15 years ago."

Eurostar, the train operator, has cut the journey from the revamped St Pancras to Brussels to less than two hours. Last year passenger shuttles rose 11% and lorry shuttles by 10%, with revenues up 6%.

This article appeared in the Guardian on Wednesday April 09 2008 on p26 of the Financial section. It was last updated at 00:07 on April 09 2008.