Eurotunnel eyes higher profits on recovering Europe

By Dominique Vidalon

PARIS, March 18 (Reuters) - Eurotunnel (Paris: FR0010533075 - news) , the operator of the Channel Tunnel, raised its dividend by 20 percent and forecast a further rise in profit this year and next, driven by a recovery in the British economy and signs of improvement in Europe.

Eurotunnel said it would hand investors a dividend of 0.18 euros per share after 2014 earnings before interest, tax, depreciation and amortization (EBITDA) rose 7 percent year-on-year.

"The group is confident in growth prospects for passenger and freight traffic, and in its ability to control costs," Deputy Chief Executive Emmanuel Moulin told a conference call.

Eurotunnel forecast EBITDA of 535 million euros this year and 580 million in 2016 after it reached 498 million ($527 million) last year. This was slightly above the average estimate in a Thomson Reuters I/B/E/S poll of 492 million for 2014.

The Channel Tunnel links France and Britain via the Eurostar high-speed train and shuttles that carry either passenger cars or freight trucks.

Rail freight tonnage grew 21 percent last year, while the number of passengers travelling on high-speed trains through the tunnel rose 3 percent to 10.4 million. The number of trucks transported on shuttles through the tunnel rose 6 percent.

MyFerryLink, the ferry service between Britain and France, achieved revenue growth of 25 percent to 93 million euros last year and an EBITDA loss of 12 million, Eurotunnel said.

Eurotunnel has put loss-making MyFerryLink up for sale after a ban on it operating the route was upheld by Britain's Competition Appeal Tribunal.

Moulin said Eurotunnel had received four "expressions of interest" for the unit and would soon open a data room for potential bidders. MyFerryLink is slated to cease operations from July 9.

Eurotunnel started to operate services on the Dover-Calais crossing in 2012 under the MyFerryLink brand, having acquired three ferries from now-defunct SeaFrance.

Eurotunnel shares have risen 15 percent since the start of this year, giving the group a market value of 6.8 billion euros. ($1 = 0.9450 euros) (Editing by James Regan)