Page last updated at 11:49 GMT, Wednesday, 4 March 2009

Eurotunnel to pay first dividend

Eurotunnel trains

Channel Tunnel operator Eurotunnel says it will pay a dividend for the first time since it was created in 1986.

The Paris-based firm will pay four euro cents a share after making a net profit of 40m euros (£35.5m; $50m) in 2008.

The dividend came despite reduced passenger traffic after a fire closed the tunnel between Britain and France in September.

Eurotunnel recorded a profit for the first time in 2007 after successfully restructuring its huge debts.

"The group has recorded a solid profit which, for the first time in our history, allows us to pay a dividend to our loyal shareholders," said Eurotunnel chairman and chief executive Jacques Gounon.

A payment by a company to its shareholders, usually linked to its profits

Last year, Eurostar carried more than nine million passengers in one year for the first time, after the high-speed rail link between London's St Pancras station and the tunnel opened in November 2007.

Eurostar operates the passenger train services linking London to Paris and Brussels, paying Eurotunnel a levy per passenger.

"[Mr Gounon] did a lot of things that many people didn't like, but he achieved the objective," said Michael Stainer of the Eurotunnel Foundation Shareholders' Action Group. "The dividend demonstrates the worth of the restructuring two years ago."

Eurotunnel was saved from bankruptcy in 2007 after its creditors agreed to cut its debt by taking a stake in a newly-listed company, though many long-time shareholders lost perks such as unlimited free travel.

Dividend cuts

Eurotunnel's dividend comes as other companies cut back on returning income to shareholders amid the global economic downturn.

ITV has said it will not pay a dividend in 2009, while oil giant BP plans to freeze its dividend for the first time since 1999, chief executive Tony Hayward told the Financial Times.

US conglomerate General Electric last week cut its dividend to $0.10 from its planned payment of $0.30 per share, a move it said would save it $9bn a year. US bank JP Morgan Chase also cut its shareholder dividend.

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