Shareholders see light at end of tunnel - a dividend

English Channel tunnel operator Groupe Eurotunnel will pay shareholders their first ever dividend after reporting a 2008 net profit of 40 million ($100.25 million).

Until it reached a restructuring deal with shareholders in 2007, Eurotunnel lurched from one debt crisis to another and last year's profit comes despite a steep drop in traffic in the fourth quarter after a fire broke out aboard one of the trains using the 50km tunnel. Part of the tunnel remained closed until February.

In 2007, the company reported a profit of 1 million, excluding an exceptional gain of 3.3 billion from the restructuring agreement, which halved Eurotunnel's debt.

"The year 2008 clearly marks the end of financial uncertainty for Eurotunnel," CEO Jacques Gounon said.

Eurotunnel will pay a dividend of 0.04 per share and Gounon said there could be more good news for "our loyal shareholders".

He said the company was doing well enough so that shareholders issued with warrants as part of the restructuring deal could exchange them for shares this year - two years earlier than planned.

Eurotunnel estimates the fire cost 200 million in damages and lost business but said the financial effect of the fire was limited to 10 million, the amount of the insurance excess.

As a result of the fire, 45 per cent fewer trucks were shuttled in the fourth quarter and 37 per cent fewer cars. The railway business was less affected.

Eurostar, a separate company which operates the passenger train service linking Paris and London and pays Eurotunnel a levy, carried a record nine million passengers last year.

It continued to run services, albeit on a reduced timetable, after Eurotunnel reopened one of the two tunnels after the fire.

- AP