Eurotunnel hit by security and telecom woes

Profit expectations at Anglo-French Channel Tunnel operator Eurotunnel have been hit by higher security costs and a telecoms …

Profit expectations at Anglo-French Channel Tunnel operator Eurotunnel have been hit by higher security costs and a telecoms market slump.

The debt-laden firm that owns the concession to run the Channel Tunnel rail link between Britain and France also warned today it might not meet its target of covering interest payments with core income this year.

Its hopes of moving into profit have been hit by the costs of guarding the link against people trying to use the tunnel and its trains to gain illegal entry to Britain.

Operating profit was also hit by a slump in the global telecoms market that hit leasing income on the telecom cables that run through the tunnel.

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Operating profit in 2001 fell 12 per cent to £183 million sterling, while turnover fell 6 per cent from last year to £564 million. The underlying loss after interest charges of £330 million on its over-£4.5 billion of debt was £147 million.

Eurotunnel's London-listed shares closed at 63-1/4 pence on Friday.

The stock has outperformed the FTSE transport sector by about 30 per cent over the last year but was down 4 per cent in early Paris trade today at 98 cent.