Losses still rising at Eurotunnel

Eurotunnel is weighed down by huge debts

The troubled Channel tunnel operator has seen first-half losses increase five-fold as its new management struggles to turn the business around.

In the six months through June, the company's net loss increased to 119m euros (£79m; $144m) from 22m euros in the same period a year earlier.

Chief executive Jean-Louis Raymond, who took over after a shareholder revolt in April, said the results would improve.

However, he warned that the firm's financial situation was "worrying".

Legacy?

Eurotunnel has debts of 6.4bn euros and is struggling to compete on price with the English Channel ferry operators.

Saying that first half's poor results were the fault of the previous board, Mr Raymond insisted that Eurotunnel had now "identified the conditions for recovery... and this should improve our operating situation from 2005."

But the company warned that there would be no recovery in the second half of this year, even though it planned to cut costs and update its business plan.

Competition has increased for cross-Channel passengers and Eurotunnel saw the number of cars and coaches using its shuttle service fall by 14% over the past year.

Mr Raymond took over as chief executive of Eurotunnel after the company's 7 April annual general meeting in Paris, at which its shareholders voted to dismiss the previous board and elect six new directors.

The company's new board is planning to present proposals on restructuring Eurotunnel's debts in the autumn.