PARIS: Twenty years after opening for business, Channel Tunnel operator Eurotunnel finally sees a strong and profitable future, supported by record passenger traffic and a growing freight business.
The company, twice forced to refinance after construction cost overruns and over-optimistic traffic forecasts, said it benefited from a recovering British economy last year and saw solid trading in February. It also expects to pay corporation tax for the first time next year.
CEO Jacques Gounon, who took the helm in 2007, said shareholders could expect a further dividend rise this year and next, after a 25 percent hike to 15 cents a share for 2013 announced on Thursday.
“For the first time in Eurotunnel’s troubled history, we consider the group’s situation is very satisfactory and we are confident in the future,” Gounon said.
The tunnel linking France to Britain carries the Eurostar high-speed train from Paris and Brussels to London and shuttle trains conveying passenger cars, coaches and freight trucks.
The 50.5 km link, which took nearly six years to build and cost 9 billion pounds ($14.94 billion) as well as the lives of several workers, was inaugurated by Queen Elizabeth and French President Francois Mitterrand on May 6, 1994.
It was built without taxpayers’ money on the insistence of former British Prime Minister Margaret Thatcher, leaving shareholders — many of them private individuals who were encouraged to invest, and bondholder banks, to bear the brunt of its unfolding financial troubles.
The project’s costs were nearly double those initially estimated. Revenue projections proved overly optimistic, shuttles broke down and a fire in the tunnel wreaked havoc in November 1996.
Eurotunnel’s debt pile brought it to the verge of bankruptcy in 1996 and then again in 2006, and after a long legal battle, bondholder banks forgave billions of euros of debt.
In 2013, an all-time high of over 10 million passengers took the Eurostar, while Eurotunnel’s shuttle services carried 2.5 million passenger vehicles and 1.4 million trucks. Eurotunnel’s revenue rose 12 percent to 1.1 billion euros, driven by a 16 percent jump in revenue at its rail freight unit Europorte.
“It’s obvious we are seeing an economic recovery in Britain that is actually very strong,” Gounon said.
He noted a growing number of Britons — who represent two thirds of the Tunnel’s users — were driving their cars onto its shuttles to go to continental Europe, but said that in France, consumer confidence was still grim.
“The Brits are in need of a bit of fun” and eager to turn the page of austerity, he said. “But the French are feeling down in the dumps.”
Earnings before interest, tax, depreciation and amortization (EBITDA) reached 449 million euros and Eurotunnel is aiming for 460 million euros this year and over 500 million in 2015.
Earnings however, came below market forecasts of 482 million euros for this year and 521 million in 2015 in a Reuters poll. Analysts found the guidance disappointing, and Eurotunnel shares were down more than 3 percent having risen 34 percent in the last 12 months.
Gounon said the guidance factored in a continuation of the loss-making ferry service between Calais and Dover, MyFerryLink, a service whose future hangs in the balance pending the outcome of an inquiry by Britain’s Competition Commission. A preliminary finding on the case will be released at the end of next week, he said.
Gounon said Eurotunnel would create extra parking space at its terminals and buy three additional freight shuttles to absorb truck traffic, which he saw rising 3-4 percent annually.
Gounon also saw potential for 14.2 million Eurostar passengers by 2020 if new high-speed rail links were opened, for instance with Geneva in Switzerland.
Eurotunnel, whose concession runs until 2086, has already announced the Eurostar would connect London to Marseille in 2015 and London to Amsterdam in 2017. Germany’s rail operator Deutsche Bahn is set to start using the tunnel too from 2016.
Reuters reported earlier this month that the British government was considering selling its 40 percent stake in Eurostar.
Eurotunnel sees light at last after 2 dark decades
Eurotunnel sees light at last after 2 dark decades
Closing Bell: Saudi Arabia’s TASI closes in green at 12,103
- MSCI Tadawul Index also increased by 2.55 points, or 0.17%, to close at 1,517.16
- Parallel market Nomu gained 11.83 points, or 0.04%, to close at 31,005.69 points
RIYADH: Saudi Arabia’s Tadawul All Share Index concluded Thursday’s trading session at 12,102.55 points, marking an increase of 25.24 points, or 0.21 percent.
The total trading turnover of the benchmark index was SR5.55 billion ($1.47 billion), as 99 of the listed stocks advanced, while 131 retreated.
The MSCI Tadawul Index also increased by 2.55 points, or 0.17 percent, to close at 1,517.16.
The Kingdom’s parallel market Nomu reported increases, gaining 11.83 points, or 0.04 percent, to close at 31,005.69 points. This comes as 39 of the listed stocks advanced while as many as 43 retreated.
The index’s top performer, Tihama Advertising and Public Relations Co., saw a 9.91 percent increase in its share price to close at SR16.86.
Other top performers included Zamil Industrial Investment Co., which saw an 8.01 percent increase to reach SR35.05, while Al Yamamah Steel Industries Co.’s share price rose by 5.42 percent to SR36.
AYYAN Investment Co. also recorded a positive trajectory, with share prices rising 4.99 percent to reach SR16. Fawaz Abdulaziz Alhokair Co. witnessed positive gains, with 4.49 percent reaching SR14.44.
Arabian Cement Co. was TASI’s weakest performer, with its share price falling 5.81 percent to SR14.88.
Riyadh Cement Co. followed with a 5.45 percent drop to SR30.35. Yamama Cement Co. also saw a notable decline of 5.26 percent to settle at SR33.35.
Umm Al-Qura Cement Co. dropped 3.55 percent to SR17.94, while Methanol Chemicals Co. declined 3.03 percent to SR17.94, ranking among the top five decliners.
In the parallel market Nomu, View United Real Estate Development Co. was the top gainer, with its share price surging by 22.64 percent to SR9.10.
Other top gainers in the parallel market included Mulkia Investment Co., up 8.25 percent to SR40, and Enma AlRawabi Co., rising 6.67 percent to SR23.68.
Naas Petrol Factory Co. and Meyar Co. were the other top gainers on the parallel market.
Al-Modawat Specialized Medical Co. saw the largest decline on Nomu, with its share price slipping 8.05 percent to SR16.
Naseej for Technology Co. fell 7.14 percent to SR65, while Saudi Azm for Communication and Information Technology Co. dropped 6.18 percent to SR28.10, ranking among the notable decliners on Nomu.
On the announcement front, Al-Jouf Agricultural Development Co. said it has entered into a SR200 million Shariah-compliant bank facilities agreement with Banque Saudi Fransi to finance the company’s expansion plans and operational activities.
Its share price closed at SR64.50, reflecting a 1.2 percent gain.
Saudi Basic Industries Corp., or SABIC, announced that its Saudi affiliates have received official notification of increased feedstock prices, which is expected to affect the company’s production costs.
SABIC’s shares closed at SR67.30, marking a decline of 0.59 percent.
Sahara International Petrochemical Co., also known as Sipchem, received a notice from Saudi Aramco amending certain feedstock prices, effective Jan. 1. The financial impact is expected to result in a 2 percent increase in the total cost of sales, starting in the first quarter of the 2025 fiscal year.
Sipchem’s shares ended the day at SR24.66, down 2.43 percent.
National Agricultural Development Co., or NADEC, received a notification regarding an adjustment in fuel prices for its operational activities. The financial impact is estimated to result in a 1.5 percent increase in operating costs, to be reflected starting in the first quarter of fiscal year 2025.
This change is expected to moderately raise production costs. NADEC’s shares closed at SR24.52, marking a 1.55 percent increase.
Saudi Arabia’s Ministry of National Guard achieves 100% localization of maintenance contracts
- The milestone was celebrated at a signing ceremony for new localization contracts
- Key accomplishments celebrated at the event included the development of a strategic implementation plan for sustainability localization
RIYADH: Saudi Arabia’s Ministry of National Guard has increased local spending on maintenance, repairs, and operations for its ground systems from 1.6 percent to 100 percent over the past four years.
The milestone was celebrated at a signing ceremony for new localization contracts under the patronage of the Minister of National Guard, Prince Abdullah bin Bandar, with the participation of the General Authority for Military Industries.
The initiative is part of a broader effort to achieve sustainable development within the Kingdom’s military industries, enhance local capabilities, and support Vision 2030 goals.
The ministry has signed a series of contracts with local companies to improve the sustainability and efficiency of military systems. These agreements aim to strengthen military readiness, contribute to economic growth, and create job opportunities within Saudi Arabia.
These pacts include a sustainability contract for integrated weapons systems and heavy weaponry with SAMI Defense Systems Co., an electronic systems sustainment agreement with SAMI Advanced Electronics Co., and a vehicle sustainability deal with Alkhorayef Industries Co.
In conjunction with these contracts, GAMI announced signing two industrial participation deals to enhance local content and build national industrial capabilities.
The first agreement, signed with SAMI Defense Systems Co., focuses on the sustainability of integrated weapons and heavy weaponry, aiming to achieve over 60 percent industrial participation and create new employment opportunities for Saudi professionals.
The second contract, signed with Alkhorayef Industries Co., pertains to the sustainability of military vehicles and aims to encourage investment in qualified industrial activities to strengthen the defense sector.
The ministry highlighted the economic benefits of the localization program, including creating over 800 direct jobs and empowering national companies to take a central role in the Kingdom’s defense ecosystem.
Key accomplishments celebrated at the event included the development of a strategic implementation plan for sustainability localization, the establishment of innovation laboratories for spare parts manufacturing, and progress in achieving over 60 percent industrial participation in contracts.
These initiatives also contribute to enhancing local capabilities and fostering innovation within the Kingdom’s defense sector.
The event was attended by several high-ranking officials, including Minister of Industry and Mineral Resources Bandar Alkhorayef, GAMI Governor Ahmed Al-Ohali, Governor of the General Authority for Defense Development Faleh Al-Suleiman, and President of the General Authority for Civil Aviation Abdulaziz Al-Duailej.
Senior representatives from the companies awarded the contracts. Military and civilian officials from the Ministry of National Guard were also present.
SRC and Hassana launch mortgage-backed securities to boost Saudi real estate investment
- Deal seeks to diversify Kingdom’s financial markets by introducing an innovative asset class
- Saudi banks’ mortgage lending hit a near three-year high of $2.7 billion in November
RIYADH: The region’s first-of-its-kind residential mortgage-backed securities will be available in Saudi Arabia as the Kingdom seeks to enhance liquidity and expand investment opportunities in the real estate finance sector.
A memorandum of understanding, signed between the Saudi Real Estate Refinance Co., a subsidiary of the Public Investment Fund, and Hassana Investment Co., seeks to diversify Saudi Arabia’s financial markets by introducing an innovative asset class.
The issuance of mortgage-backed securities is anticipated to attract a wide base of local and global investors to the secondary mortgage market, creating new opportunities for investment in the sector.
Majeed Al-Abduljabbar, CEO of SRC, said: “Our partnership with Hassana marks a significant milestone in supporting the evolution of the housing finance landscape and fostering the development of Saudi Arabia’s capital markets.”
He added: “Together, we aim to introduce innovative financial solutions that deliver value to both investors and citizens while aligning with Vision 2030’s objectives.”
The deal, signed in the presence of Majid Al-Hogail, minister of municipalities and housing, and Mohammed Al-Jadaan, minister of finance, aligns with the Housing Program and Financial Sector Development Program under Vision 2030.
“This collaboration establishes a new standard for partnerships, enabling the development of scalable financial solutions that contribute to the Kingdom’s economic development goals. It aligns with Hassana’s strategy of diversifying its investment portfolios through long-term partnerships with entities like SRC,” said Saad Al-Fadhli, CEO of Hassana.
Hassana’s participation as a key institutional investor underscores the potential to create sustainable economic investment opportunities.
This comes as the Kingdom’s real estate market continues to show strong demand, with annual growth in residential sales transaction volumes across major metropolitan areas.
Saudi banks’ mortgage lending hit a near three-year high of SR10.06 billion ($2.7 billion) in November, marking a 51.23 percent year-on-year increase and the highest monthly amount in over two years, according to data from the Kingdom’s central bank.
This surge reflects strong activity in the housing market, with houses accounting for 65 percent of the loans, followed by apartments at 31 percent and land purchases at 4 percent.
As part of its Vision 2030 agenda, the Kingdom is fast-tracking residential construction, particularly in Riyadh, to accommodate its growing population and attract international talent.
Qatar’s foreign merchandise trade balance surplus slips 5%
- Total exports in the third quarter of 2024 — including domestic goods and re-exports — were valued at 87.8 billion riyals
- Value of imports during the same period amounted to 30.1 billion riyals
RIYADH: Qatar recorded a foreign merchandise trade balance surplus of 57.7 billion Qatari riyals ($15.8 billion) in the third quarter of 2024, down 5 percent year on year, new data revealed.
Merchandise trade balance surplus is the difference between total exports and imports.
According to figures released by the Gulf nation’s Planning and Statistics Authority, the country’s total exports in the third quarter of 2024 — including domestic goods and re-exports — were valued at 87.8 billion riyals. This represents a 2.2 percent decline compared to the same period in 2023.
The value of Qatar’s imports during the same period amounted to 30.1 billion riyals, up 4.1 percent compared to the same quarter in 2023.
The figures fall in with the nation’s trajectory to restore government revenues to pre-2014 oil price shock levels and double its economy by 2031, according to an analysis by Standard Chartered in August.
The data also reflects the steady growth of Qatar’s non-oil economy, contributing to two-thirds of the country’s gross domestic product.
Exports breakdown
The figures further disclosed that the drop in exports is mainly attributed to lower exports of mineral fuels, lubricants, and related materials by 5 billion riyals, or 6.5 percent, and miscellaneous manufactured articles by 100 million riyals, or 22 percent.
Increases were mainly recorded in chemicals and related products by 1.5 billion riyals, or 24.5 percent, machinery and transport equipment by 1.2 billion riyals, or 53.3 percent, and manufactured goods classified chiefly by material by 400 billion riyals, or 17.1 percent.
Exports of crude materials, inedible, except fuels, also witnessed a rise of 100 million, or 24.8 percent.
Imports breakdown
The rise in import values is mainly linked to increases in machinery and transport equipment by 800 million riyals, or 6.7 percent, chemicals and related products by 400 million riyals, or 17.2 percent, and mineral fuels, lubricants and related materials by 320 million riyals, or 58.2 percent.
Imports of food and live animals also jumped by 300 million riyals or 9.8 percent.
Meanwhile, decreases were recorded mainly in miscellaneous manufactured articles by 400 million, or 6.7 percent as well as manufactured goods classified chiefly by material by 300 million, or 7.7 percent.
Principal destinations
The PSA data showed that Asia was the principal destination of exports for the country, representing 75.9 percent, as well as the primary origin of Qatar’s imports, accounting for 39.7 percent.
The Gulf Cooperation Council followed, accounting for 11.6 percent of exports and 11.3 percent of imports, respectively.
The EU came next, with 7.7 percent of exports and 26 percent of imports.
Turkish manufacturing sector nears stabilization in December, PMI shows
- Employment in the manufacturing sector saw a renewed decline, reversing a rise in November
- Input costs increased sharply due to higher raw material prices
ISTANBUL: Turkiye’s manufacturing sector contracted at the slowest rate in eight months in December, a business survey showed on Thursday, in a sign that the sector is nearing stabilization.
The Purchasing Managers’ Index (PMI) rose to 49.1 last month from 48.3 in November, moving nearer to the 50.0 threshold denoting growth, according to the survey by the Istanbul Chamber of Industry and S&P Global.
“December PMI data provided plenty of hope for the sector in 2025. While business conditions continued to moderate, the latest slowdown was only marginal as signs of improvement were seen in a range of variables across the survey,” said Andrew Harker, Economics Director at S&P Global Market Intelligence.
The survey highlighted a softer moderation in production, which declined at the slowest pace in nine months, suggesting some improvement in demand. The rate of slowdown in new orders and purchasing eased, although demand remained subdued.
“If this momentum can be built on at the start of 2025, we could see the sector return to growth. The prospects for the sector should be helped by a much more benign inflationary environment than has been the case in recent years,” Harker said.
Despite the positive signs, employment in the manufacturing sector saw a renewed decline, reversing a rise in November, the survey showed.
Input costs increased sharply due to higher raw material prices, but the rate of output price inflation slowed to its weakest in over five years as some firms offered discounts to boost sales.
