Insurance dispute forces Eurotunnel to report loss in 2010

Eurotunnel - Suffering Losses in 2010

Eurotunnel – Suffering Losses in 2010

European rail operator Eurotunnel has reported a net loss of €57 million (£48 million, $79 million) for the year 2010. This can be compared to a net profit of €7 million that the company reported a year earlier in 2009.

Eurotunnel attributed the loss due to an insurance claim with the insurers over a fire in the Channel Tunnel in September 2008.

The company’s debt services expenses (interest cost) had jumped by 25 percent in 2010 to €248 million in 2010.

The company is, however upbeat about this year’s performance and said it expects passenger traffic to grow by 3% through the channel in 2011. It also projected the freight traffic to grow by about 5%.

Eurotunnel chief executive Jacques Gounon said: “As announced previously, the delay in payment of the insurance indemnities has impacted heavily on our net result but the group is working to rectify this situation”.

In 2010, its passenger traffic in the Eurostar division rose by 3% to 9.5 million, the company disclosed. However, the truck shuttle service jumped by 42% in 2010 over the previous year.

The number of trucks carried for the year was still lower than 2007, indicating the economy is yet to recover fully.

Eurostar has chalked out plans to expand its network this year by starting new services to Amsterdam, Switzerland and south east of France. The new service can attract an additional 3 to 4 million passengers annually, Eurotunnel estimated.

Deutsche Bahn – the German national railway company also plans to start new services linking London to important cities in Germany and Holland.

Eurotunnel said it has factored in the ‘serious possibility’ of high crude prices to continue for some time in the future. That will give it an advantage over rivals such as airlines and cruise ships – which have already been forced to raise fares by adding fuel surcharges.

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