Eurotunnel profits double in 2016

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Groupe Eurotunnel, owner of the Channel Tunnel, bucked falls in Eurostar passenger traffic to record a doubling in its net consolidated profits in 2016, in what the company’s executive chairman called the best year in the project’s history.

The improvements were driven by an 11 per cent increase in the number of vehicles carried on the company’s truck shuttle services. There was also a 2 per cent increase in the number of cars carried, while coach traffic volume fell 8 per cent. Net consolidated profits hit €200m in the year.

The results mark a continued normalisation of the Eurotunnel business, which grappled since its opening in 1994 with over-optimistic traffic and financial assumptions that forced a complex restructuring completed in 2007.

Since then the company has had to cope with lacklustre traffic during the economic downturn and traffic disruption from migrants’ efforts to board cross-Channel trains to the UK.

Jacques Gounon, executive chairman, said all the company’s three core businesses – operation of the tunnel and shuttle services, the ElecLink cross-Channel electricity connector now under construction and the Europorte rail freight business – had outperformed their sectors.

Improved security around the group’s Coquelles terminal in France since late 2015 had eliminated disruption because of migrant incursions, the group said.

“2016 was the best year in our history,” he said. “Our outlook is very good and we are announcing new improved objectives for 2017 and 2018.”

The increases in truck and car shuttle traffic pushed revenue from shuttles up 10 per cent to €603m compared with 2015’s figures restated at constant exchange rates, Eurotunnel’s preferred measure.

Traffic from through rail traffic – Eurostar passenger services and freight trains – fell 3 per cent by the same measure to €290m. Eurostar passenger numbers fell 4 per cent to 10m, largely because of the aftermath of the November 2015 terror attacks in Paris and the March 2016 attacks in Brussels.

Rail freight tonnage through the tunnel fell 27 per cent to 1.04m tonnes, a fall that Eurotunnel attributed partly to operators’ rerouting some services because of previous migrant disruption at facilities near the tunnel.

Earnings before interest, tax, depreciation and amortisation from the core tunnel operations rose 6 per cent to €515m on a constant currency basis, on revenue up 5 per cent to €907m on the same basis.

Eurotunnel in August last year took full ownership of the ElecLink project, which is currently under construction and expected to start operations in 2020.

The company’s Europorte rail freight business broke even for the year, on €116m revenue.

The company plans to pay a dividend of 26 euro cents for 2016, up from 22 cents the previous year. Eurotunnel’s large numbers of French small shareholders prize the company’s dividend payments.

Mr Gounon said the company was planning continued increases in dividends and was targetting a 35 cent dividend for 2018

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