Eurotunnel posts big 2003 loss
 |
Eurotunnel says traffic growth has been hurt by high access charges.
Story Tools
|
PARIS, France (Reuters) -- Anglo-French Channel Tunnel operator Eurotunnel posted a 1.9 billion euro ($2.42 billion) net loss for 2003 due to big write downs on Monday, and proposed significant cuts to access rates to ramp up rail traffic.
Eurotunnel, which runs the undersea link between Britain and France, also said it needed big reductions in its nine-billion euro debt pool and in interest payments.
Shares slid 9.1 percent to 0.50 euros by 0818 GMT in Paris and by 9.6 percent to 35 pence in London.
Eurotunnel reported a net loss of 1.889 billion euros, largely due to a 1.845 billion euro impairment charge, with a loss of 44 million euros before the charge. In 2002, Eurotunnel posted a profit of 508 million euros.
Operating profit fell to 248 million euros from 326 million euros a year earlier.
Eurotunnel said it made proposals to the British and French governments as well as its industry and financial partners to cut access charges paid by rail companies who use its tunnel, but that to do this it needed a more stable financial structure.
Talks about the tariff cuts, spurred by the British and French governments, had started at the beginning of the year.
"They will be extremely complicated and will last for the whole of 2004,'' Eurotunnel Chief Executive Richard Shirrefs told a news conference.
The tariff moves would involve cutting debt and interest payments, and also extending debt maturities.
"Traffic growth for Eurostar and rail freight is strangled by high tunnel access charges and we have too much debt to reduce them unilaterally,'' Shirrefs said in a statement.
The reductions would let Eurotunnel increase traffic and open routes to new destinations such as Amsterdam, it said.
The company said on Monday there was no sign of improvement in the cross-Channel market.
"The market remains depressed and price competition is fierce,'' Eurotunnel Joint Board Chairman Charles Mackay said in a statement. "At this point it is therefore difficult to predict when our shuttle business will pick up again.''
Eurotunnel said its 2003 sales fell to 838 million euros from 914 million, and that its interest cover after capital spending was 90 percent compared with 102 percent in 2002.
Eurotunnel, under siege from a group of rebel shareholders who want to oust management, was hit by spiraling construction costs and is still struggling with massive debt more than nine years after it opened.
Copyright 2004
Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
