Getlink, the operator of the Channel Tunnel, said on Thursday that its core earnings for the first half of the year more than quadrupled compared to the same period a year ago, above analyst forecasts due to increases in cross-Channel traffic and its new Eleclink project.
Getlink’s CEO Yann Leriche told journalists on a conference call, “People have a desire to travel this summer,” adding that the removal of limitations is benefiting the company’s business.
As pandemic-related travel restrictions relax in Europe, the Channel Tunnel is seeing an increase in traffic this year.
The France-based company’s profits before interest, taxes, depreciation, and amortization (EBITDA) increased by 206 percent year-over-year to 309 million euros ($314 million), above the company-compiled estimate of 281 million.
In recent years, Getlink’s business has suffered due to the impact of COVID-19 travel restrictions on its main Eurotunnel operation.
The train company Eurostar, a significant Getlink customer that provides high-speed connections between London, Paris, Brussels, and Amsterdam, witnessed a 1,535 percent increase in traffic between January and June.
Earlier this month, Getlink reported that its Shuttle traffic increased for the sixth consecutive month in June, as both truck and passenger vehicle crossings increased compared to the previous year.
ELECLINK AT A TIME OF ENERGY SHORTAGE
In its first five weeks of operation, Getlink’s new Eleclink unit, a cable inside the Channel Tunnel that facilitates energy exchange between the United Kingdom and France, generated 35 million euros in income, the company said. Leriche remarked that its release coincides with “perfect” energy shortages.
During the conference call, the CEO said, “Eleclink was placed into service at a time when… France needs electricity,” while Chairman Jacques Gounon added, “We do not know what will happen in the energy industry in the next six months.”
France is facing a potential energy crisis as unscheduled maintenance at the nuclear reactors of energy giant EDF (EPA:EDF) adds to the strain on supplies already caused by Russian gas cutbacks to Europe.
“They will make a substantial amount of cash from this asset, beyond everyone’s expectations,” Charles Maynadier of Kempen told Reuters in an email on Friday, referring to Eleclink. In the meanwhile, analysts at BofA said in a report that the project could gain from fluctuating power costs.
Getlink has once again declined to issue full-year forecasts for the company, citing persistent geopolitical and pandemic-related uncertainties.