Eurostar suffers £25m loss in 'difficult' 2016 for Channel operator

Eurostar has slumped to an annual loss, blaming terror attacks in Europe and "tough trading conditions" for falling passenger numbers.

The cross-Channel rail service reported an underlying operating loss of £25m for 2016 - on the back of a £34m profit in the previous year.

That was despite its busiest December on record, as customers took advantage of the weak pound in the wake of the Brexit vote to visit the UK ahead of Christmas.

The company said that while business has continued to pick-up since the end of last year, sales revenues fell by 3% to £794m during the year as a whole, with passenger numbers 4% lower at 10 million.

It told Sky News Eurostar would have been profitable but for the Nice (Other OTC: NCSYF - news) lorry killings last July putting passengers off travelling on the back of the Paris shootings in November 2015.

Its annual results statement, which 12 months ago had also been upbeat about current trading, focused on what it said was a "strong start" to 2017 - with sales revenues 12% ahead in the first ten weeks.

While it did not pointedly mention the effects of the weak pound, Eurostar pointed to a boost from business travellers and visitors from the US - with the latter benefiting especially from the collapse in sterling's value as it makes purchases from dollar-linked accounts cheaper.

Chief (Taiwan OTC: 3345.TWO - news) executive Nicolas Petrovic said: "Despite the difficult trading environment last year, we continued to make major investments in new trains, our stations and our overall service.

"With (Other OTC: WWTH - news) the return of travellers from the US and business travel on the increase, the market is now rebounding strongly and we are optimistic about the growth prospects for the year."

Eurostar said the introduction of its new e320 trains and its new business lounge at Gare du Nord in Paris were crucial elements of its efforts to attract business travellers.

It said they were "increasingly choosing high speed rail over plane, valuing the seamless journey, digital connectivity and ability to work on board".