Friday, May 1, 2015

Eurotunnel Sees Increased Freight Revenues from Road and Rail Freight in Q1

Group Records Growth Across the Board but RoRo Ferry Traffic Will End Shortly
Shipping News Feature

FRANCE – UK – Overall the consolidated revenues for the Eurotunnel Group for both passenger and freight related traffic grew for the first quarter of 2015 and reached €304.9 million, an increase of 10% compared to 2014 (€276.9 million restated at the exchange rate for the first quarter of 2015). Revenues from the core activity, transporting trucks and passenger vehicles on board shuttles, grew by 10% to €124.6 million due, not only to a growth in volumes, but also to an increase in yield.

Those parts of the group relevant to the freight market all seem to be holding up well. The number of freight trains in the first quarter increased by 11% to 787 trains. This growth is linked to the success of ETICA (Eurotunnel Incentive for Capacity Additions), the programme which started in 2013 for companies launching new intermodal freight services through the Channel Tunnel and which in 2014 was extended to new freight categories.

Revenues from Europorte and its rail freight subsidiaries reached €77.0 million in the first quarter of 2015, an increase of 15% over the same period in the previous year. Europorte claims it has been ‘selective’ in committing to long term agreements and the signature of a 15 year contract with the Atlantic Port of Bordeaux to operate the Verdon terminal facility, with the implementation of a logistics management chain running from unloading of ships to railway distribution, it sees as an important sign of interesting developments with contractors who seek quality of service and long term partnerships.

GB Railfreight, the third largest rail freight operator in the UK is described as ‘on a dynamic growth path despite a highly competitive market’. Amongst the contracts signed recently are the 15-year agreement with Serco to haul the Caledonian Sleeper and a five-year contract with Aggregate Industries. These contracts each bring annual revenues of around €7 million and in February, at the 2015 UK Rail Industry Awards, GB Railfreight won the accolade for ‘Railway Operator of the Year’ for its performance in 2014.

Meanwhile, MyFerryLink, the controversial surface division which evolved from the SeaFrance collapse, is still threatened with closure by the British regulators and awaits the ‘final’ judgement as to its fate having publicly stated that the vessels which ply the route are up for sale. Competing against maritime operators with 20-30% of the Short Straits market each, MyFerryLink reached a market share of almost 12% for the first quarter 2015, compared to almost 10% for the first quarter of 2014. Revenues for MyFerryLink in the first quarter of 2015 amounted to €25.2 million, an increase of 37%. Eurotuneel says this is proof that the cross-Channel operator is a commercial and operational success.

MyFerryLink saw its traffic increase with 118,013 trucks and 42,898 cars transported in the first quarter of 2015; equivalent to a truck market share close to 12%. Given the decision by the Competition and Markets Authority, the Eurotunnel Group is obliged to stop this activity despite its success and has put it up for sale. The operating contracts signed with the SCOP SeaFrance, the independent company formed by ex SeaFrance employees which entered a ‘safeguard procedure’ on 10 April 2015, come to an end on 2 July at the latest. Eurotunnel insist the French authorities are closely monitoring events and are considering the structures that could enable the activity to continue.

Truck Shuttle traffic increased significantly (+8%) to reach 373,635 vehicles. The Truck Shuttle service saw an all-time record set in March with 140,009 trucks transported, and a market share of 38.2%, bringing the best possible finish to this first quarter. This record level of traffic the group says reconfirms Eurotunnel’s strategy of innovation and investment in three new Truck Shuttles and the extension of the terminals in Folkestone and Coquelles. Jacques Gounon, Chairman and Chief Executive Officer of Groupe Eurotunnel SE, commented:

“On top of the excellent progress in revenues across the Group’s activities, the new all-time record for truck traffic recorded in March shows the potential of the Channel Tunnel, which will be further strengthened by the current investment programme.”