April 18, 2018 / 5:37 AM / 2 years ago

Channel tunnel group Getlink sees higher long-term profit as Brexit talks progress

FILE PHOTO: A high-speed Eurostar train exits the Channel tunnel in Coquelles, near Calais, May 5, 2014. REUTERS/Christian Hartmann/File Photo

(Reuters) - The “positive” progress in negotiations for Britain to exit the European Union has allowed Getlink (GETP.PA) to forecast higher long-term core profit, the operator of the undersea transport link between Britain and France said on Wednesday.

By 2022, the firm, which since March has been 15.5 percent owned by Italian motorway and airport operator Atlantia SpA (ATL.MI), said it expects to exceed 735 million euros (£636.2 million) in earnings before interest, tax, depreciation and amortisation (EBITDA) at a constant exchange rate compared with over 700 million euros projected in February.

“The growth on both sides of the Channel and progress made in the Brexit negotiations allow us to forecast EBITDA of more than 735 million euros in 2022,” Getlink’s Chairman and Chief Executive Officer (CEO) Jacques Gounon said in a statement.

The comment comes a day after the International Monetary Fund confirmed its forecasts for a slowing British economy, with growth of 1.6 percent this year and 1.5 percent in 2019.

Getlink, however, stands to benefit from growth in the Greater London area.

For January-March, “marked by strong organic growth and the strengthening of pricing power,” the company formerly known as Eurotunnel reported a 5 percent rise in revenue to 241.4 million euros. That was helped by increased traffic in its shuttle services favourably influenced by the Easter holiday travel falling in March, offsetting the impact of negative weather conditions for tourism witnessed at the beginning of 2018.

Revenue was also boosted by Eurostar high-speed passenger train traffic rising 5 percent, an underlying trend Getlink expects to continue in the second quarter of the year with the recently opened London-to-Amsterdam service.

Later on Wednesday, the company will hold its annual general shareholders meeting at which attendees will be asked to consider a proposal to raise the CEO age limit to 68 years, allowing Gounon, who turns 65 next week, to run for another term of four years.

Reporting by Piotr Lipinski in GDYNIAEditing by Christopher Cushing

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