Eurotunnel to pay first ever dividend

After surviving bankruptcy in the form of a restructuring deal with shareholders back in 2007, Eurotunnel has been in a precarious financial position.

However, today the operator has announced some positive news to its beleaguered shareholders that it will pay its first ever dividend after reporting a €40 million (£35.5 million) net profit in 2008.

After the restructuring agreement Eurotunnel’s debt has halved and the company reported a profit of €1 million.

The profit in 2008 comes despite a drop in traffic after a fire broke out in the tunnel and part of the tunnel was closed until February.

This is a landmark for Eurotunnel as it ends a long period of financial instability and according to chief executive, Jacques Gounon, a combination of efficiency and cost control means the group has finally reported a strong profit in difficult conditions for the first time in its history.

Eurotunnel will pay a dividend of 4 cents per share, although the reduction in capacity following the fire has made it difficult to fully access the implications of the current economic downturn.

Eurotunnel shares have increased by 12.1 percent to €3.14 so the company has a market value of about €596 million even though revenue fell to €704 million from €718 million in 2007.

Story link: Eurotunnel to pay first ever dividend