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Eurotunnel still on track following Brexit decision.

EUROTUNNEL gave a Gallic shrug to the Brexit vote as it insisted business has "never been stronger".

The Channel Tunnel operator said it notched up records for truck and passenger car traffic in the third quarter, despite fears the plunging pound would put Britons off travelling abroad.

But the group took a hit from falling demand after recent terrorist attacks, with revenues from its rail network dropping by 5% to 74.1m euros (PS66.3m) in the third quarter.

It said Eurostar carried nearly 289,000 fewer passengers in the three months to the end of September following the terrorist atrocities in Paris and Belgium - a fall of 10%.

Eurotunnel warned in July that the Brexit-hit pound would impact on earnings this year and next.

In its latest update, the group signalled that worries over the fallout from the Brexit vote were exaggerated.

It said: "There is no sign of slowdown in the UK economy, the FTSE has grown over 10% since the referendum.

"Variations in the value of sterling have had no significant impact on our business in the past and the movement in exchange rates does not damage growth in profitability."

While the plunging pound will mean sales in the UK are worth less when translated into euros, the group said the falls in sterling will help it "significantly" cut its debt repayments.

Jacques Gounon, chairman and chief | Eurotunnel sees "encouraging signs" executive of Eurotunnel, said: "These encouraging signs, combined with new records broken this quarter for the group, put into perspective the change in public opinion following the vote in favour of Brexit: our business has never been stronger."

Eurotunnel said passenger traffic hit a July record of 317,424 cars - beating the result seen in 1998, when the football World Cup was held in France.

Overall passenger car traffic rose by 1% to 2.15m in the three months to September - its best third-quarter result since 1998. Group-wide third quarter revenues rose by 4% to 320.3m euros (PS286m).

July's profit warning saw Eurotunnel cut its outlook for underlying earnings by 25m euros (PS22.3m) in 2016 and 26m euros (PS23.2m) next year.

Based on the pound being 7% lower against the euro, 2016 profits are expected to be 4.5% down at 535m euros (PS478m), and 4.3% down in 2017 at 579m euros (PS517m).

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Publication:Huddersfield Daily Examiner (Huddersfield, England)
Date:Oct 20, 2016
Words:391
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