2016 Half-year Results: 13th consecutive half-year of revenue growth - All-time record for truck traffic through the Channel Tunnel
Revenue: further increase to €582 million (+2%1)
EBITDA increased by 4% to €249 million
Net result2 increased to €38 million
- Channel Tunnel Fixed Link:
Revenue increased to €443 million (+ 4%)
- Shuttle traffic increased: growth of 10% for trucks and stable for cars
- Railway traffic: slight decrease in the number of passengers on high-speed trains (-3%)
- Increase in EBITDA of 4% to €239 million
EBITDA stable at €10 million
Jacques Gounon, Chairman and Chief Executive Officer of Groupe Eurotunnel SE stated:
“Month after month Eurotunnel has broken traffic records, particularly for the Truck Shuttles. The Tunnel has never been as highly utilised as it is today. Despite the financial market uncertainty generated by the United Kingdom voting to leave the European Union, the Group remains confident in the performance of its economic model and in its outlook.”
- Channel Tunnel Fixed Link
- Best half-year ever for the Truck Shuttle, with almost 830,000 trucks transported in the first half of the year making it an absolute record. Market share has increased by 2 points to 39.7%.
- Best first half-year for Le Shuttle car service since 2001 with an estimated 2-point increase in its market share despite a contraction in the cross-Channel car market of 4%.
- The growth in revenue for Shuttle Services also benefitted from an increase in yield.
- Despite the terrorist attacks in Brussels in March and the strikes in Belgium and France in March to June, Eurostar traffic only decreased by 3%.
- Europorte and its subsidiaries
- EBITDA stable at €10 million, the reduction in operating costs compensating for lower revenues.
- Slight slow-down in revenue, linked to the reduction in cereal transport activity and to the SNCF strikes in France which paralysed the national rail network in June, blocking signal boxes and leading to disruption to traction services and petrochemical deliveries.
- The increase in the Carbon Tax in the UK led to a reduction in coal transport for GB Railfreight.
- New contracts signed, including the 5-year deal signed with Drax to supply biomass and the start-up of new infrastructure and intermodal services.
- GB Railfreight took delivery of seven new Class 66 locomotives during the first quarter.
- In May, the Eurotunnel Group and Star Capital signed a conditional agreement for the Group to acquire Star’s 51% holding in the ElecLink joint venture. The process continues.
- Geopolitical context
The referendum on the UK leaving the European Union occurred in an international context already marked by geopolitical risk. As a result, the financial markets were hit in the days following the vote. The effects of the UK leaving the EU will depend closely on the conditions of the exit and the status that the country negotiates in relation to the EU. This uncertainty will continue until negotiations are completed, during which time the UK retains its status as a full member of the Union.
Operating result continues to progress
The Group’s consolidated revenues for the first half of 2016 reached €582 million, an increase of €12 million, or +2%, compared to the first half of 2015.
In spite of the uncertain geopolitical context the consolidated figures for the first half-year show an increase of €9 million in EBITDA to €249 million.
Operating costs for the Group are almost stable (+1%) for the period. For the Fixed Link, operating costs increased by 5% to €204 million, an increase due to the growth in activities and to additional costs generated by the strengthening of security measures.
For the Fixed Link, this is the seventh consecutive first-half-year of EBITDA growth.
Revenues and the operating result are, as always, characterised by a high level of seasonality across the year.
Net financial charges have increased slightly (+€2 million) over the first six months of 2016, the reduction in financial charges following the operation to simplify the structure of the debt and debt repayments being offset by the impact of the increase in the UK inflation rate on the indexed tranche of debt.
In the first half of 2016, the Group recorded a consolidated net profit of €60 million, an increase of €29 million compared to the first half of 2015 (recalculated), after taking account of the €22 million net profit from the discontinued maritime segment, which arises mainly from the accounting for the finance leases with options to sell of the ferries.
Free cash-flow from the continuing activities remains stable at €71 million for the first half of 2016, compared to €73 million (recalculated) for the first half of 2015.
As the mechanisms for and the means by which the UK will leave the European Union have yet to be determined, it is difficult to predict the effect on the macro economic and political environment and therefore on cross -Channel transport and the Group’s activities. Nonetheless, the Group does not expect any significant impact on its activities in the short term and currently activity remains buoyant.
In this context, the Group remains confident in its capacity to generate sustainable growth and continues to forecast growth in EBITDA, with the following objectives:
- The 2016 objective of €560 million EBITDA at the 2015 average exchange rate of £1=€1.375 and excluding MyFerryLink, is now €535 million at £1=€1.273 (the average exchange rate of the first half-year 2016).
- Likewise the 2017 objective of €605 million EBITDA at £1=€1.375 and excluding MyFerryLink, is now €579 million at £1=€1.273.
Get the full results in the attached document below.
- All comparisons with the figures for the first half of 2015 are made at the average exchange rate for the first half of 2016: £1=€1.273 and after restatement of 2015 for IFRS 5 in the context of the cessation of the maritime segment’s activities in the in the second half of 2015. As a reminder, MyFerryLink’s revenues for the first half-year of 2015 reached €52 million.
- Excluding the maritime segment MyFerryLink.