Is there a light at the end of the tunnel?
INTEREST payments on its huge overdraft plunged Eurotunnel into the red again last year.
But the Channel Tunnel operator, which has spent the past year pursuing financial changes to stave off bankruptcy, made a £220m trading profit on overall income of £538m, up five per cent.
Overall, the company made a net loss of £143m in 2006.
The Anglo-French company has been protected from bankruptcy by the French courts.
But that arrangement has come to an end as the business faces a final verdict from shareholders.
So-called safeguard plans to halve Eurotunnel’s debt from £6.4bn to around £2.9bn still depends on their approval, which is far from certain because they stand to see their investment value slashed to 13 per cent.
If they vote against the company’s plans, then Eurotunnel will go bust.
The company said revenue from its Shuttle services had gone up by seven per cent, railways (Eurostar and freight) by two per cent.
In November, Eurotunnel’s lost income from its Minimum Usage Charge which guaranteed revenue from Eurostar irrespective of the number of passengers using the service.
Jacques Gounon, chairman and chief executive, called the results excellent.
They showed that only through the new Eurotunnel Group would it be relieved of more than half its current debt, and with substantially reduced financial charges “we will finally be able to remove the spectre of bankruptcy which threatened Eurotunnel in 2005”.
Meanwhile, Eurotunnel said the cross-Channel car market had grown for the first time in eight years.
Growth was a modest one per cent but it was the first sign of growth since 1998.
Truck business went up but the number of coaches carried fell by 13 per cent.