Eurotunnel eyes higher profits on recovering Europe

Eurotunnel, the operator of the Channel Tunnel, raised its dividend by 20 per cent and forecast a further rise in profit this year and next, driven by a recovery in the British economy and signs of improvement in Europe.

Eurotunnel said it would hand investors a dividend of 0.18 euros per share after 2014 earnings before interest, tax, depreciation and amortization (ebitda) rose 7 per cent year-on-year.

“The group is confident in growth prospects for passenger and freight traffic, and in its ability to control costs,” deputy chief executive Emmanuel Moulin told a conference call.

Eurotunnel forecast ebitda of €535 million this year and €580 million in 2016 after it reached €498 million last year. This was slightly above the average estimate in a Thomson Reuters I/B/E/S poll of €492 million for 2014.

The Channel Tunnel links France and Britain via the Eurostar high-speed train and shuttles that carry either passenger cars or freight trucks.

Rail freight tonnage grew 21 per cent last year, while the number of passengers travelling on high-speed trains through the tunnel rose 3 per cent to 10.4 million. The number of trucks transported on shuttles through the tunnel rose 6 per cent.

MyFerryLink, the ferry service between Britain and France, achieved revenue growth of 25 per cent to €93 million last year and an ebitda loss of €12 million, Eurotunnel said.

Eurotunnel has put loss-making MyFerryLink up for sale after a ban on it operating the route was upheld by Britain’s Competition Appeal Tribunal.

Mr Moulin said Eurotunnel had received four “expressions of interest” for the unit and would soon open a data room for potential bidders. MyFerryLink is slated to cease operations from July 9th.

Eurotunnel started to operate services on the Dover-Calais crossing in 2012 under the MyFerryLink brand, having acquired three ferries from now-defunct SeaFrance.

Eurotunnel shares have risen 15 per cent since the start of this year, giving the group a market value of €6.8 billion.

Reuters