Eurotunnel profits steam ahead

Eurotunnel profits steam ahead

Channel tunnel operator Eurotunnel has reported a hike in half-year earnings after "spectacular" growth in passenger numbers using the Eurostar service.

The second phase of the high speed line between London and Folkestone and the opening of the Eurostar terminal at St Pancras in London meant passenger numbers for independently-run Eurostar surged 18% to 4.6 million.

Eurotunnel's net income in the six months to June 30 climbed to 26 million euros (£20.6m) from one million euros the year before, but Eurotunnel warned sales growth may slow in the second half as a result of the economic slowdown and the weakness of the pound against the euro.

However, Eurotunnel chairman Jacques Gounon said: "With a significant growth in net profit, Groupe Eurotunnel is ahead of its forecasts and enters the second half of 2008 in a position of strength."

Eurotunnel's revenues from railways for the first half of 2008 increased by 13% on the same period a year earlier, mainly as a result of the "spectacular" increase in Eurostar passenger demand. The number of freight trains using the tunnel remained in decline, although the 7% fall was slower than in 2007.

Revenues from Eurotunnel's own shuttle service increased by 10%, with car-based usage up by 4% and coaches 5% stronger in the period. Favourable circumstances such as disruption at ports and storms helped the performance.

Since the tunnel was opened in 1994, the Eurotunnel venture has struggled with vast debt levels and finally agreed a restructuring last year.

It saw around 600,000 shareholders in the UK and France asked to swap their shares for a combined 13% stake in the new company, Groupe Eurotunnel. The business faced going into administration had the deal failed.

The company is now on a more stable footing, with a significant reduction in the group's financial interest payments also helping its performance.