Eurotunnel Boosts First-Half Traffic, Profit Falls 8%

Anglo-French Channel tunnel operator Eurotunnel reported an 8% fall in first-half profit on Thursday, but said car volumes and Eurostar rail traffic had increased.

In a buoyant cross-Channel market, revenues from Eurotunnel's shuttle were boosted by an 8% increase in the number of cars and a 9% increase in trucks.

The number of train passengers using Eurostar rose 5%, but rail freight fell 14%.

"We consider this could be representative of the yearly growth," Chief Executive Jacques Gounon told reporters.

The rugby World Cup in France in October and the launch of a faster Eurostar service in November might help boost second-half revenues, he added.

Earnings before interest and tax (EBIT) fell to 128 million euros ($174 million) in the first six months of 2007 due to the scheduled end of the guaranteed Minimum Usage Charge (MUC) payments made by railway companies using the tunnel.

The charge boosted Eurotunnel's revenues by 55 million euros in the first half of 2006. Excluding its impact, the group's first-half operating profit was 52% ahead in 2007.

Eurotunnel shares fell 2.1%, following the results.

The group will benefit in the second half from reduced financial costs after restructuring to deal with huge debts it had accrued to dig the tunnel, exacerbated by delays to train services and lower-than-forecast traffic.

Gounon said the full-year financial cost would be cut to 270-280 million euros from over 400 million euros last year.