Eurotunnel cuts outlook on weak pound post-Brexit
Published 20/07/2016 | 09:11
Anglo-French subsea rail link operator Groupe Eurotunnel lowered its 2016 and 2017 guidance for core profit (EBITDA) as a result of the post-Brexit drop in the pound.
Eurotunnel, which carries Eurostar high-speed trains between Paris, Brussels and London, lost as much as a third of its value in the immediate aftermath of the Brexit vote despite offering reassurances that it would not suffer.
Eurotunnel made two-thirds of its 1.22 billion euros ($1.34 billion) in revenue last year from the shuttle services, with Britons making up 80pc of car passengers.
The company said on Wednesday it was lowering its forecast for 2016 EBITDA (earnings before interest, tax, depreciation and amortization), excluding MyFerryLink, by about 4.5pc to 535 million euros and its 2017 EBITDA outlook, excluding MyFerryLink, by about 4.3 percent to 579 million euros.
Eurotunnel, which also shuttles trains containing passenger cars, coaches and freight trucks, said the impact of Brexit on cross-Channel transport was uncertain, but it added that it did not expect any significant impact on its activities in the short term.
"Despite the financial market uncertainty generated by the United Kingdom voting to leave the European Union, the Group remains confident in the performance of its economic model and in its outlook," Chief Executive Jacques Gounon said.
The first half of 2016 saw a three percent decrease in Eurostar passenger traffic due to attacks in Brussels in March and rail strikes in Belgium and France, the company said.
However, Eurotunnel said truck shuttle traffic was up 10 percent in the first half of 2016, with almost 830,000 trucks transported.
The company reported a four percent increase in EBITDA for the first half of 2016 to 249 million euros. First half revenue was up two percent at 582 million euros, Eurotunnel said.
Eurotunnel's shares have recovered some losses from Brexit lows, closing 16 percent below pre-Brexit levels on Tuesday.