Eurotunnel stock sinks further on sales slump

19th October 2004, Comments 0 comments

PARIS, Oct 19 (AFP) - The price of shares in debt-strapped Eurotunnel, the Channel tunnel operator, slumped on Tuesday in response to falling sales figures.

PARIS, Oct 19 (AFP) - The price of shares in debt-strapped Eurotunnel, the Channel tunnel operator, slumped on Tuesday in response to falling sales figures.

The company reported third-quarter figures showing that sales had continued to fall, dropping by 4.0 percent to EUR 203.9 million (USD 254 million) from a year earlier.

Eurotunnel shares plunged by 12.50 percent to EUR 0.28 in midday Paris trading, while the CAC 40 was off 1.50 percent at 3,714.48 points.

The company, which faces debts of about EUR 10 billion, was shaken in April by a shareholder revolt which replaced the board with a team promising to revitalise sales and to strike advantageous terms with creditors.

However, the new team, which is due to present a three-year plan to creditors before the end of the month, had forecast that sales would continue to fall in the short term.

Chief executive Jean-Louis Raymond, presenting the figures on Tuesday, said in a statement: "The third-quarter results are obviously not satisfactory and confirm our July prognosis.

"These figures demonstrate that Eurotunnel's previous strategy was not adjusted to market trends in terms of capacity and pricing."

He said: "We are completing a thorough review of the situation in both the market and the organisation of the group. This review will form the basis of our three-year plan that we will present to our agent banks at the end of October."

The company said that in the third quarter operating revenues had fallen by 4.0 percent. The number of cars, coaches and trucks using its shuttle service beneath the sea between northern France and southern England had fallen on a 12-month comparison.

However, the number of Eurostar rail passengers travelling through the tunnel surged by 13 percent to 1,997,800 from 1,772,684 in the third quarter and rail freight tonnage that was carried rose by 7.0 percent to 472,163 tonnes from 442,222 tonnes.

According to a weekend report by British weekly paper The Business, Eurotunnel is on a collision course with French trade unions over the three-year plan, which was likely to call for significant job cuts.

© AFP

Subject: French News

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