Eurotunnel to pay out first dividends
Mar 5 2009 by Iain Laing, The Journal
EUROTUNNEL is to pay shareholders their first-ever dividend after reporting annual net profits of £35.8m.
The improvement in results and proposed payout of four cents per share comes despite a drop in traffic following a fire in the tunnel in September.
Chairman and chief executive Jacques Gounon said 2008 marked the end of financial uncertainty for Eurotunnel, which floated on the stock market in 1987. He added: “Through its efficiency and the control of its costs, the group has recorded a solid profit which, for the first time in our history, allows us to pay a dividend to our loyal shareholders.”
Since the Channel 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 today.
The fire restricted revenues growth to 4% in the year, but Eurotunnel said it was insured against operating losses and material damage up to £806.5m, which limited the financial effect of the fire itself to £9m, the excess on its insurance.
Eurotunnel’s revenues from train operators increased by 7% on the same period a year earlier, mainly as a result of increased Eurostar passenger demand due to the second phase of the high speed line between London and Folkestone and the opening of the Eurostar terminal at St Pancras.
