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Eurotunnel Says Matching 2012 Olympic Profit to Be Tough

Eurotunnel Says Tough to Match 2012’s Olympic Profit Bonanza
An employee inspects a passenger's ticket at the security gate of the Eurotunnel terminal, operated by Groupe Eurotunnel SA, in Folkestone. Photographer: Jason Alden/Bloomberg

March 21 (Bloomberg) -- Channel Tunnel operator Groupe Eurotunnel SA said it will struggle to match the traffic surge that triggered a threefold profit increase last year given the comparative absence of big-ticket events in 2013.

Eurotunnel’s net income rose to 34 million euros ($44 million) in 2012 from 11 million euros a year earlier as the London Olympics and Queen Elizabeth II’s diamond jubilee lured passengers to the U.K., the Paris-based company said today.

Almost 20 million people used the 30-mile subsea rail link between Britain and France in 2012, with customer Eurostar Group Ltd.’s expresses carrying 9.9 million, a gain of 2.2 percent, and Eurotunnel’s own vehicle shuttles transporting the rest.

“It’s indisputable that 2012 was a special year, a bit exceptional,” Chief Executive Office Jacques Gounon said in a phone interview. “In a mild recession we don’t have any doubts about maintaining actual results and growing modestly, but it’s a restart of the economy that could bring a real boost.”

Gounon said it’s not clear whether the U.K. Competition Commission’s opposition to Eurotunnel’s 65 million-euro acquisition of ships from French rail operator SNCF’s defunct SeaFrance ferry arm will cause the 2012 purchase to unravel.

Port Bids

Eurotunnel last week submitted a response to the British opinion on the deal, which was cleared by French authorities. A final ruling is due in mid-April, according to the CEO, who has said the shipping arm -- rebranded as MyFerryLink -- complements the shuttle by allowing vehicles to go by sea when use of the tunnel is restricted, rather than distorting competition.

With final bids for the French ports of Calais and Boulogne due today, Gounon said he’s not in a position to comment on whether Eurotunnel will make an offer for the assets.

Eurotunnel’s shuttles performed well during heavy snow that hit northern France and southern England last week, with the services running even when Eurostar’s expresses failed, Gounon said, adding that the trains had to stop only when roads at either end of the tunnel became clogged with traffic.

“The tunnel was the one place where everything was functioning in an environment where everything else had stopped,” he said. “We’re under the sea, under the ground.”

Eurotunnel reiterated that it’s seeking earnings before interest, tax, depreciation and amortization of 500 million euros in 2015, compared with 461 million euros in 2012.

Gounon said it’s tough to make a firm prediction for 2013 because of uncertainty surrounding the future of MyFerryLink.

Eurotunnel shares rose as much as 3.8 percent and were trading 1.2 percent higher at 6.75 euros as of 1:56 p.m. in Paris. The stock has gained 16 percent this year, valuing the company at 3.71 billion euros.

To contact the reporter on this story: Andrea Rothman in Toulouse, France, at aerothman@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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