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Business News

Eurotunnel profits collapse after fire and wintry weather

Profits at Eurotunnel collapsed last year as the business was hit by a tunnel fire and wintry weather, the firm said today.

The company, which operates the Channel Tunnel and runs vehicle shuttle services, posted profits of just 1.4 million euros (£1.3 million) for 2009, down from 34 million euros (£31 million) the previous year.

Eurotunnel counted the cost of a fire in September 2008 which reduced capacity until February, as well as the chaos which ensued when Eurostar services succumbed to the snow last December.

The recession also weighed on the firm as the market for cross-Channel truck shuttling services is around 20% below 2007.

But the group's chairman and chief executive Jacques Gounon said the results were "proof of Eurotunnel's resilience in the face of difficulties".

"Our group has remained profitable in an unfavourable economic context," he said.

Eurotunnel generates income by charging other freight and passenger services such as Eurostar to use the Channel Tunnel, so business is hit when the tunnel is out of action.

Revenues fell 16% to 571 million euros (£518 million) at constant exchange rates, although the firm clamped down on costs to maintain profits in the face of big increase in its insurance premiums following the fire.

The number of Eurostar passengers in the first half of 2009 was 6% below the the previous year, although a recovering second half - helped by its Little Break, Big Difference campaign and £59 deals - resulted in full-year traffic growth of 1%.

Eurostar said 9.2 million passengers travelled through the tunnel last year despite the breakdown of five Eurostars on December 18 and the severe service disruptions which followed over the Christmas period.

Rail freight traffic over the year was down 12% on 2008, although truck shuttle traffic plunged 39% as several hauliers hit by the economic crisis chose not to renew their annual contracts.