Eurotunnel shares sink as costs rise and flat profits disappoint

 
City A.M. Reporter
EUROTUNNEL reported flat first-half net profit of €5m (£3.9m) yesterday, but shares in the company fell as figures missed analyst expectations and it struggled with rising operating costs.

The company is betting that increased traffic from the Olympic Games in London and relatively strong growth from the Queen’s Jubilee celebration in June will help the company lift full-year profits and combat the continent-wide economic slowdown.

The firm said that full year results would be “strong,” without providing further detail.

But analysts were unimpressed with the first-half profit figures, noting that Eurotunnel struggled to control costs and that operating profit in particular disappointed.

Earnings before interest, tax, depreciation and amortisation (Ebitda) rose three per cent to €205m for the half. Revenues for the period also rose 14 per cent to €473m.

Eurotunnel revenue rose on the back of higher traffic, in particular stronger truck traffic, as well as higher tariffs. The company also likely benefited from the bankruptcy of Channel sea line, SeaFrance.

However, the group’s operating costs rose 20 per cent, due to costs associated with Europorte, its rail freight business.