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Eurotunnel to pay first dividend

EUROTUNNEL proposed paying its first dividend of 0.04 euro cents a share as 2008 marked the end of financial uncertainty at the cross-Channel rail tunnel operator which has come close to bankruptcy.

The Franco-British company, which carries Eurostar trains beneath the Channel, said net profit reached 40 million euros in 2008 compared with a 2007 loss of 12 million euros at constant exchange rates, restated following a financial restructuring.

"The group has recorded a solid profit which, for the first time in our history, allows us to pay a dividend ...," Chief Executive Jacques Gounon told reporters at a conference call on Wednesday.

After years of debt crisis, Eurotunnel reached a major restructuring deal with its shareholders in 2007 that saved it from collapse.

Eurotunnel shares rose by as much as 7.1 percent and were up 12.1 percent at 3.14 euros by 0856 GMT, giving the company a market value of about 596 million euros.

Eurotunnel's revenues fell to 704 millions euros from 718 million in 2007 and were down 2 percent at constant exchange rates as traffic capacity in the last quarter of the year was halved following a tunnel fire in September.

The fire led to a significant reduction in full-year shuttle revenues, down 7 percent at 431 million euros, Eurotunnel said. But the opening of the second section of high-speed track in Britain resulted in a 7 percent revenue rise at constant exchange rates from railways.


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