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Channel tunnel operator Getlink's first half profits rise

FILE PHOTO - Jacques Gounon, Chairman and Chief Executive Officer of Channel tunnel operator Getlink, formerly known as Eurotunnel, poses before the company's 2017 annual results presentation in Paris, France, February 21, 2018. REUTERS/Stephane Mahe

By Dominique Vidalon

PARIS (Reuters) - Channel tunnel operator Getlink (GETP.PA) expressed confidence over growing profits and dividends this year and in the next four years, despite the challenges of Brexit.

Getlink, formerly known as Eurotunnel, struck the upbeat tone after reporting higher first-half earnings and revenue, despite the impact of French railway strikes that shaved 4.5 million euros (£4 million) off group revenue.

Getlink carries Eurostar high-speed trains between Paris, Brussels and London, as well as shuttle trains containing passenger cars, coaches and freight trucks.

"Our first half figures are very satisfactory and we have confidence in the future. We keep our forecasts for 2018 and our outlook for the medium-term," Getlink Chief Executive Jacques Gounon told a conference call on its first-half results.

He added Getlink expected to grow its EBITDA (earnings before interest, tax, depreciation and amortisation) annually.

"I do not expect a major change in trends, even with Brexit. We think we can continue to grow our EBITDA each year," he said.

The company, which since March has been 15.5 percent owned by Italian motorway and airport operator Atlantia (ATL.MI), said first-half EBITDA had risen 5 percent to 250 million euros, while revenues climbed 4 percent.

Getlink kept its guidance for EBITDA of 545 million euros for the 2018 full year, with a dividend of 0.35 euros per share.

It also reiterated its outlook for EBITDA of over 735 million by 2022, with a free cash flow of 400 million euros.

Its dividend is set to rise 0.05 euros each year by 2022.


Earlier this month, the International Monetary Fund cut its forecast for 2018 British economic growth to 1.4 percent from 1.6 percent, partly reflecting uncertainties over Brexit.

Nevertheless, Gounon said that despite Britain's decision to quit the European Union, Getlink stood to benefit from a new Eurostar London-to-Amsterdam route that started in April and the launch of the ElecLink power line in 2020.

Eurotunnel renamed itself Getlink last November to reflect the fact that the company has other businesses besides operating the Channel tunnel. They include Europorte, which runs the rail freight business, and ElecLink, a projected power line to connect the French and UK national grids.

Gounon confirmed that Getlink had submitted to Eurostar, which runs the existing high-speed train service, a study it had commissioned for a new budget service between London and Paris.

This new service would leave Stratford in east London and take three hours compared with two hours and 20 minutes on Eurostar.

It would have operating costs 25-30 percent lower than the current Eurostar service and thus offer a lower fare, he said.

"We asked Eurostar to think about it. If they are not interested, we will propose it to others."

(Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta)