Regulatory News:
Groupe Eurotunnel (Paris:GET)
- Revenues: further increase to ?473 million (+14%)
- EBITDA improved to ?205 million (+3%)
- Growth in trading profit to ?129 million (+6%)
- Net profit of ?5 million
-
The cross-Channel Fixed Link:
- Revenues increased significantly to ?370 million (+10%), including an 18% increase in Shuttle revenues
-
Traffic growth:
- Truck Shuttles (+20%), Passenger Shuttles (cars +4%, coaches +6%)
- Eurostar passengers travelling through the Tunnel (+3%)
- Europorte : continued growth in revenues (+36%)
Jacques Gounon, Chairman and Chief Executive Officer of Groupe
Eurotunnel SA, stated,
"This first half year has been very
satisfactory: traffic has continued to grow in a highly competitive
market due to a distinct service offering. The financial performance is
sound, generating a very good level of cash-flow."
Key events in the first half of the year
- Eurotunnel has prepared for the Olympic Games with the addition of an extra half Shuttle, to transport passenger vehicles through the Channel Tunnel. At the same time, the speed of the Passenger Shuttles has been increased to 160 kph (normally 140kph), reducing the crossing time to 30 minutes (normally 35 minutes). As part of its ongoing partnership with Eurolines, coach transport provider for the Olympic Games, the timetable has been intensified in order to enable high levels of coaches to cross early in the morning, to ensure that spectators can arrive in London in time for the morning sessions of the Olympic events. Additional booths have been put into service to speed up frontier controls and increase the flow of traffic. During the Olympic Games significant peaks of traffic are expected between the Continent and the UK.
- Eurotunnel Le Shuttle broke new traffic records during the The Queen's Diamond Jubilee celebrations, transporting for the first time more than 10,000 passenger vehicles in 24 hours in one direction, from Folkestone (Kent) to Coquelles (Pas-de-Calais). On Friday 1 June 10,380 cars and 128 coaches travelled to the continent by Shuttle. In three days, Eurotunnel transported 26,000 passenger vehicles from Folkestone to Coquelles.
- The Eurotunnel Group opened CIFFCO (the Cote d'Opale International Railway Training Centre) in order to share its railway expertise with other players in the industry. This is the first training centre of its kind, open to all European railway companies, infrastructure managers and subcontractors to train railway technicians of all types who work on the French and neighbouring networks.
- In partnership with the French telecoms operators, Eurotunnel announced another new service for its customers in March. A GSM-P fibre optic transmission system for 2G and 3G mobile telephone communications, which will enable Shuttle and high speed train passengers to use their mobile telephones inside the Channel Tunnel.
- On 11 June the Paris Commercial Court accepted Eurotunnel's proposal to acquire the assets of SeaFrance, following its liquidation. The Eurotunnel Group has purchased the ships Berlioz, Rodin and Nord Pas-de-Calais for ?65 million, in order to lease them to an independent operating company, My Ferry Link. With the transfer of ownership taking place on 2 July, the residual payment of ?58.5 million was made after 30 June.
- On 19 July, Groupe Eurotunnel transferred dealing in its shares from the London Stock Exchange to the NYSE Euronext London, to increase liquidity and to give direct, simplified access to its many European investors. This transfer gives the investor community a European platform for trading Eurotunnel shares, with one order book in euros across the whole market.
Fixed Link: Sustained performance
Eurotunnel continues to see strong progress in the performance of Passenger and Truck Shuttle services and Eurostar passenger numbers, despite the highly competitive market.
Although the truck market has increased by 3% in the first half year, it remains, nonetheless, 10% below the levels of 2008.
Europorte: New contracts
Europorte, the rail freight subsidiary of Groupe Eurotunnel SA, continues to grow strongly in its different areas of business:
- Infrastructure management: Europorte won a contract for the maintenance of the ports at Le Havre and Rouen which started in January 2012. Ports de Paris has chosen Europorte in partnership with Colas Rail to operate and maintain the railway infrastructure at its ports in Gennevilliers (92), Bonneuil-sur-marne (94) and Limay (78). Ports de Paris, which has 60km of railway infrastructure, is the largest inland port in France and the second largest in Europe.
- Railway operations: the major contract with the European transport and logistics leader, Gefco, is operating as planned with weekly services between Gevrey, Amberieu, Fos-sur-mer, Marseille, Toulouse and Bordeaux.
GBRf, the third largest rail freight operator in the UK, also continues to grow. It has won a two-year contract to transport more than a million tonnes of spoil from a subcontractor of Crossrail, the cross London tunnel.
Sound financial results
The figures for the first half year show an increase in EBITDA (+3% at a constant exchange rate). Operating costs for the Group have increased by ?45 million (20%) over the same period, reflecting the increase of Europorte's activity and the increase in Shuttle traffic.
At ?126 million for the first half of 2012, the net cost of finance and debt service has decreased by ?9 million compared to the first half of 2011 at a constant exchange rate, due to the reduction in the rate of inflation and its impact on the nominal value of the index-linked tranche of the debt.
For the first six months of 2012, free cash flow was ?45 million. Over the same period in 2011, after having received ?66 million in insurance indemnities, the cash flow was ?16 million higher at ?61 million. Available cash flow at the end of June was ?267 million, compared to ?276 at 31 December 2011), after the purchase of floating rate notes, share buybacks and the continuing programme of capital expenditure.
Finally, the consolidated net profit is stable at ?5 million for the first six months of 2012, recalculated at a constant exchange rate. On a comparable basis, excluding the ?29 million of insurance indemnities accounted for in 2011, the net profit has increased by ?29 million.
Appendix 1: Traffic and revenue figures for the first half of 2012
Appendix 2: Half-Yearly Financial Report at 30 June 2012
APPENDIX 1: TABLES SHOWING REVENUE AND TRAFFIC FOR THE FIRST HALF OF 2012
REVENUE
First half (January - June)
1st half | 1st half | 1st half | ||||||
? million | 2012 | 2011 | % | 2011 | ||||
restated* | change | published** | ||||||
Shuttle Services | 223.3 | 189.7 | +18% | 181.8 | ||||
Railway network | 140.8 | 142.2 | -1% | 136.7 | ||||
Other revenues | 5.6 | 5.5 | +1% | 5.3 | ||||
Sub-total Fixed Link | 369.7 | 337.4 | +10% | 323.8 | ||||
Europorte | 103.2 | 75.7 | +36% | 72.4 | ||||
Revenue | 472.9 | 413.1 | +14% | 396.2 | ||||
* Average exchange rate for the first half of 2012: £1=?1.22
** Average exchange rate for the first half of 2011: £1=?1.119
Reminder: first quarter (January - March)
1st quarter | 1st quarter | 1st quarter | ||||||
? million | 2012 | 2011 | % | 2011 | ||||
restated* | change | published** | ||||||
Shuttle Services | 101.7 | 83.9 | +21% | 81.7 | ||||
Railway network | 67.5 | 61.5 | +10% | 59.9 | ||||
Other revenues | 2.3 | 2.0 | +18% | 1.9 | ||||
Sub-total Fixed Link | 171.5 | 147.4 | +16% | 143.5 | ||||
Europorte | 51.0 | 36.8 | +38% | 35.7 | ||||
Revenue | 222.5 | 184.2 | +21% | 179.2 | ||||
* Average exchange rate for the first quarter of 2012: £1=?1.199
** Average exchange rate for the first quarter of 2011: £1=?1.132
Second quarter (April - June)
2nd quarter | 2nd quarter | 2nd quarter | ||||||
? million | 2012 | 2011 | % | 2011 | ||||
restated* | change | published** | ||||||
Shuttle Services | 121.6 | 105.8 | +15% | 100.2 | ||||
Railway network | 73.4 | 80.6 | -9% | 76.7 | ||||
Other revenues | 3.2 | 3.6 | -9% | 3.4 | ||||
Sub-total Fixed Link | 198.2 | 190.0 | +4% | 180.3 | ||||
Europorte | 52.2 | 38.9 | +34% | 36.6 | ||||
Revenue | 250.4 | 228.9 | +9% | 216.9 | ||||
* Average exchange rate for the first half of 2012: £1=?1.22
** Average exchange rate for the first half of 2011: £1=?1.119
TRAFFIC
First half
1st half | 1st half | % | ||||||
2012 | 2011 | change | ||||||
Truck Shuttles | 731,101 | 608,632 | +20% | |||||
Passenger Shuttles | Cars* | 1,048,719 | 1,006,405 | +4% | ||||
Coaches | 30,059 | 28,420 | +6% | |||||
Eurostar** | Passengers | 4,842,280 | 4,706,253 | +3% | ||||
Rail freight*** | Tonnes | 609,555 | 709,861 | -14% | ||||
Trains | 1,154 | 1,276 | -10% | |||||
Reminder: 1st quarter
1st quarter | 1st quarter | % | ||||||
2012 | 2011 | change | ||||||
Truck Shuttles | 364,724 | 301,074 | +21% | |||||
Passenger Shuttles | Cars* | 427,739 | 399,869 | +7% | ||||
Coaches | 10,615 | 9,544 | +11% | |||||
Eurostar** | Passengers | 2,235,083 | 2,152,369 | +4% | ||||
Rail freight*** | Tonnes | 313,056 | 305,789 | +2% | ||||
Trains | 589 | 589 | - | |||||
Second quarter
2nd quarter | 2nd quarter | % | ||||||
2012 | 2011 | change | ||||||
Truck Shuttles | 366,377 | 307,558 | +19% | |||||
Passenger Shuttles | Cars* | 620,980 | 606,536 | +2% | ||||
Coaches | 19,444 | 18,876 | +3% | |||||
Eurostar** | Passengers | 2,607,197 | 2,553,884 | +2% | ||||
Rail freight*** | Tonnes | 296,499 | 404,072 | -27% | ||||
Trains | 565 | 687 | -18% | |||||
* Including motorcycles, vehicles with trailers, caravans and motor homes.
** Only passengers using Eurostar to cross the Channel are included in this table, thus excluding journeys between Paris-Calais and Brussels-Lille.
*** Rail freight services by trains operators (DB Schenker on behalf of BRB, SNCF and its subsidiaries, and Europorte) using the Tunnel.
1 All comparisons with the results for the first half of 2011 are made at the constant exchange rate for the first half of 2012 of £1= ?1.22.
www.eurotunnelgroup.com
GROUPE EUROTUNNEL SA
HALF-YEARLY FINANCIAL REPORT*
FOR
THE SIX MONTHS TO 30 JUNE 2012
* English translation of GET SA's 2012 "rapport financier semestriel" for information purposes only.
Contents | |||
HALF-YEARLY ACTIVITY REPORT AT 30 JUNE 2012 | 1 | ||
Summary | 1 | ||
Analysis of the result | 1 | ||
Revenues | 2 | ||
Analysis of cash flows | 4 | ||
Other financial indicators | 5 | ||
Outlook | 6 | ||
SUMMARY CONSOLIDATED HALF-YEARLY FINANCIAL STATEMENTS AT 30 JUNE 2012 | 7 | ||
Consolidated income statement | 7 | ||
Consolidated statement of comprehensive income | 7 | ||
Consolidated balance sheet | 8 | ||
Consolidated statement of changes in equity | 9 | ||
Consolidated statement of cash flows | 10 | ||
Notes to the summary financial statements | 11 | ||
1 Important events | 11 | ||
2 Basis of preparation and significant accounting policies | 11 | ||
3 Segment reporting | 12 | ||
4 Other operating income and (expenses) | 12 | ||
5 Gross cost of servicing debt | 13 | ||
6 Other financial income and (charges) | 13 | ||
7 Earnings per share | 14 | ||
8 Property, plant and equipment | 14 | ||
9 Other financial assets | 14 | ||
10 Share capital | 15 | ||
11 Changes in equity | 16 | ||
12 Financial liabilities | 16 | ||
13 Litigation for which no provision has been made | 17 | ||
14 Provisions | 17 | ||
15 Related party transactions | 17 | ||
16 Post balance sheet events | 17 | ||
DECLARATION BY THE PERSON RESPONSIBLE FOR THE HALF-YEARLY FINANCIAL REPORT AT 30 JUNE 2012 | 18 | ||
STATUTORY AUDITORS' REPORT ON THE 2012 HALF-YEARLY FINANCIAL INFORMATION | 19 |
GROUPE EUROTUNNEL SA: HALF-YEARLY FINANCIAL REPORT FOR THE SIX MONTHS TO 30 JUNE 2012
Half-yearly activity report
HALF-YEARLY ACTIVITY REPORT AT 30 JUNE 2012
For a better comparison between the two periods, Groupe Eurotunnel SA's consolidated income statement for the first half of 2011 presented in this half-yearly activity report has been recalculated at the exchange rate used for the 2012 half-yearly income statement of £1=?1.22.
Summary
The Eurotunnel Group achieved a strong performance during the first half of 2012. Consolidated revenues for the first half of 2012 totalled ?473 million, an increase of ?60 million (14%) compared to the first half of 2011. This increase reflects organic growth from the activities of the Fixed Link (?33 million) and Europorte (?27 million). Operating costs increased by ?45 million, ?28 million of which resulted from increased Europorte activity. In the first half of 2011, the Group accounted for non-recurrent income totalling ?29 million in respect of insurance indemnities following the 2008 fire, of which ?9 million in other income related to operating losses and ?20 million in other operating income related to rolling stock damage. Excluding the effect of these items, the operating margin improved by 8% to ?205 million and the operating profit improved by ?14 million to ?129 million.
The net cost of financing and debt service amounted to ?126 million, the reduction of ?9 million (7%) reflecting the effect of the decrease in inflation rates on the index-linked tranche of the debt.
With a profit of ?5 million, the Eurotunnel Group SA's consolidated net result for the first six months of 2012 was at the same level as in the first half of 2011 (restated at a constant exchange rate). On an equivalent basis excluding the insurance indemnities accounted for in 2011, the net result improved by ?29 million.
The free cash flow generated in the first half of 2012 amounted to ?45 million, compared to ?61 million in the first half of 2011 which included receipts of ?66 million relating to insurance indemnities. At 30 June 2012, the Group's held balances of cash or cash equivalents of ?267 million (?276 million at 31 December 2011) after ?61 million of capital expenditure (including a deposit of ?6.5 million paid for the acquisition of the SeaFrance group's assets), the payment of dividends of ?44 million, ?18 million paid for the acquisition of floating rate notes and ?11 million spent on the share buy back programme.
On 2 July 2012, the Eurotunnel Group paid the remaining balance of ?58.5 million for the acquisition of the SeaFrance group's assets.
Analysis of the result
30 June 2012 | 30 June 2011 | 30 June 2011 | ||||||
? million | restated* | % | ||||||
Exchange rate ?/£ | 1.220 | 1.220 | change | 1.119 | ||||
Shuttle services | 223 | 190 | +18% | 182 | ||||
Railway network | 141 | 141 | = | 137 | ||||
Other revenue | 6 | 6 | = | 5 | ||||
Sub-total Fixed Link | 370 | 337 | +10% | 324 | ||||
Europorte | 103 | 76 | +36% | 72 | ||||
Revenue | 473 | 413 | +14% | 396 | ||||
Other income | - | 9 | 9 | |||||
Total turnover | 473 | 422 | +12% | 405 | ||||
External operating expenses | (160) | (133) | +19% | (129) | ||||
Employee benefit expense | (108) | (90) | +20% | (87) | ||||
Operating margin (EBITDA) | 205 | 199 | +3% | 189 | ||||
Depreciation | (76) | (77) | (77) | |||||
Trading profit | 129 | 122 | +6% | 112 | ||||
Net other operating income | - | 22 | 23 | |||||
Operating profit (EBIT) | 129 | 144 | 135 | |||||
Income from cash and cash equivalents | 2 | 2 | 1 | |||||
Gross cost of servicing debt | (128) | (137) | (130) | |||||
Net cost of financing and debt service | (126) | (135) | -7% | (129) | ||||
Other net financial income/(charges) and income tax expense | 2 | (4) | (4) | |||||
Net result: profit | 5 | 5 | 2 | |||||
EBITDA**/ revenue | 43% | 46% | -3pts | |||||
* Restated at the rate of exchange used for the 2012 half-year income statement (£1=?1.22).
** EBITDA less other income (?9 million in 2011).
Revenues
At ?370 million, Fixed Link revenues for the first half of 2012 grew by 10% compared to the first half of 2011 at a constant exchange rate. Europorte's revenues increased by ?27 million (36%) to ?103 million.
Consolidated revenues for the first half of 2012 totalled ?473 million, an increase of ?60 million (14%) compared to the first half of 2011.
Shuttle services
TRAFFIC | 1st quarter (January to March) | 2nd quarter (April to June) | 1st half (January to June) | ||||||||||||||||
2012 | 2011 | % change | 2012 | 2011 | % change | 2012 | 2011 | % change | |||||||||||
Truck Shuttle: | |||||||||||||||||||
Trucks | 364,724 | 301,074 | +21% | 366,377 | 307,558 | +19% | 731,101 | 608,632 | +20% | ||||||||||
Passenger Shuttle: | |||||||||||||||||||
Cars(*) | 427,739 | 399,869 | +7% | 620,980 | 606,536 | +2% | 1,048,719 | 1,006,405 | +4% | ||||||||||
Coaches | 10,615 | 9,544 | +11% | 19,444 | 18,876 | +3% | 30,059 | 28,420 | +6% | ||||||||||
* Including motorcycles, vehicles with trailers, caravans and motor homes.
At ?223 million, Shuttle Services revenues increased by 18% compared to the first half of 2011.
Truck Shuttles
The Short Straits cross-Channel market for trucks continued to grow, with a growth estimated at 3% in the first half of 2012, but remains nevertheless approximately 10% below 2008 levels. However, compared to the first half of 2011 the number of trucks transported by Eurotunnel increased by 20% during the first half of 2012, and market share increased by approximately 6 points due in part to the cessation of SeaFrance's operations towards the end of 2011.
Passenger Shuttles
The Short Straits cross-Channel car market contracted by approximately 3% in the first half of 2012 compared to the same period in 2011. Despite this trend, Eurotunnel's car traffic continued to grow during the first half of 2012, with a 4% increase in the number of cars transported by the Shuttles due to a 3 point improvement in market share.
In a coach market that grew by approximately 3% in the first half of 2012, Eurotunnel increased its traffic by 6%.
Railway network
TRAFFIC | 1st quarter (January to March) | 2nd quarter (April to June) | 1st half (January to June) | ||||||||||||||||
2012 | 2011 | %change | 2012 | 2011 | %change | 2012 | 2011 | %change | |||||||||||
Eurostar passenger trains: | |||||||||||||||||||
Passengers* | 2,235,083 | 2,152,369 | +4% | 2,607,197 | 2,553,884 | +2% | 4,842,280 | 4,706,253 | +3% | ||||||||||
Rail freight trains**: | |||||||||||||||||||
Tonnes | 313,056 | 305,789 | +2% | 296,499 | 404,072 | -27% | 609,555 | 709,861 | -14% | ||||||||||
Trains | 589 | 589 | - | 565 | 687 | -18% | 1,154 | 1,276 | -10% | ||||||||||
* Only passengers using Eurostar to cross the Channel are included in this table, thus excluding journeys between Paris-Calais and Brussels-Lille.
** Rail freight services by trains operators (DB Schenker on behalf of BRB, SNCF and its subsidiaries, and Europorte) using the Tunnel.
The Eurotunnel Group's revenues arising from the use of the Tunnel's railway network by Eurostar passenger trains and the freight train services of the rail companies during the first half of 2012 amounted to ?141 million, a level comparable to that of the first half of 2011.
The number of Eurostar passengers travelling through the Tunnel increased by 3% during the first half. The 10% decrease in the number of rail freight trains using the Tunnel in the first half of 2012 to 1,154 is the combined result of the impact of the short-term transportation of the steel during the first half of 2011 and the introduction of the extra toll imposed by Réseau Ferré de France at Frethun on each operator passing through the Tunnel which has slowed the momentum in growth of rail freight traffic.
Europorte
At ?103 million, Europorte's revenue for the first half of 2012 increased by ?27 million compared to the same period in 2011, driven by the start-up of new contracts and increased activity in existing contracts for GBRf in the UK and for Europorte France.
Total turnover
No other income was accounted for in the first half of 2012. An income of ?9 million was accounted for in the first half of 2011 following the payments received from insurers relating to operating losses following the fire in 2008.
Operating margin (EBITDA)
The Group's operating costs increased by ?45 million (20%) for the first half of 2012.
This increase was mainly due to the growth in Europorte's activity following the start of new contracts, with an increase in staff costs of ?9 million (32%) and an increase in other costs of ?19 million (40%).
Operating costs of the Fixed Link increased by ?17 million reflecting the increased levels of activity of the Shuttle Services in the first six months of 2012.
At ?205 million, the Group's operating margin for the first half of 2012 improved by ?6 million (3%) compared to the first half of 2011. Excluding the insurance indemnities accounted for in 2011, the operating margin improved by 8%. Of the Group's operating margin of ?205 million, a profit of ?207 million is attributable to the Fixed Link and a loss of ?2 million is attributable to Europorte.
Operating profit (EBIT)
Depreciation for the first half of 2012 remained stable.
The operating profit for the first half of 2012 was ?129 million compared to ?144 million for the first half of 2011, a decrease of ?15 million. Excluding the insurance indemnities accounted for in 2011, the operating result improved by ?14 million.
Net cost of financing and debt service
At ?128 million for the first half of 2012, the gross cost of servicing debt reduced by ?9 million compared to the first half of 2011 at a constant exchange rate, mainly as a result of lower British inflation rates (estimated at 3% for 2012 at 30 June 2012 compared to 5% for 2011 at 30 June 2011) and its effect on the nominal value of the of the index-linked tranche of the debt.
Net result
Other net financial income and charges in the first half of 2012 included an income of ?2 million relating to interest on the floating rate notes acquired by the Group at the end of 2011 and in the first half of 2012.
With a profit of ?5 million, the Eurotunnel Group's consolidated net result for the first six months of 2012 was at the same level as in the first half of 2011 (restated at a constant exchange rate). On an equivalent basis excluding the insurance indemnities accounted for in 2011, the net result improved by ?29 million.
Analysis of cash flows
? million | 30 June 2012 | 30 June 2011 | ||
Exchange rate ?/£ | 1.239 | 1.108 | ||
Net cash inflow from trading | 198 | 195 | ||
Other operating cash flows and taxation | 4 | (1) | ||
Net cash inflow from operating activities | 202 | 194 | ||
Net cash outflow from investing activities | (61) | (33) | ||
Net cash outflow from financing activities | (156) | (121) | ||
(Decrease)/increase in cash | (15) | 40 | ||
In total, the net cash outflow for the first half of 2012 was ?15 million, compared to a net cash inflow of ?40 million for the same period in 2011 which included receipts of ?66 million relating to insurance indemnities relating to the fire in 2008.
At ?202 million, net cash inflow from operating activities increased by ?8 million in 2012 compared to 2011. Excluding the effect of the insurance indemnities relating to operating losses received in the first half of 2011 (?46 million), net cash inflow from operating activities increased by ?54 million, principally as a result of a ?42 million increase in receipts from Fixed Link revenues mainly from Shuttle Services. Operating expenditure for the Fixed Link and net cash flows for the Europorte companies remained stable.
At ?61 million, net cash outflow from investing activities increased by ?28 million compared to 2011. Excluding the effect of the insurance indemnities relating to rolling stock received in the first half of 2011 (?20 million), net cash outflow from investing activities increased by ?8 million. During the first half of 2012, cash flow from investing activities comprised:
- ?29 million relating to the Fixed Link (?30 million in the first half of 2011) of which ?11 million was spent on the renovation and upgrade of power of locomotives and ?6 million on the project to install the GSM-R (digital radio communication system),
- ?24 million for Europorte (?23 million in the first half of 2011), mainly for the acquisition of new locomotives as part of Europorte's development plan, and
- a deposit of ?6.5 million paid in respect of the acquisition of assets from the SeaFrance group (total offer of ?65 million); the balance (?58.5 million) was paid on 2 July 2012.
Net cash outflows from financing activities in the first half of 2012 amounted to ?156 million compared to ?121 million in the first half of 2011. During the first half of 2012, cash flow from investing financing comprised:
- ?108 million of interest paid on the term loan and associated hedging transactions (?102 million in the first half of 2011),
- ?18 million paid for the acquisition of floating rate notes,
- ?11 million paid under the share buy back programme,
- ?44 million paid in dividends (?21 million 2011),
- ?3 million received in respect of the exercise of the 2007 Warrants, and
- ?18 million received following the partial refinancing of the locomotives purchased by Europorte in 2011 and 2012.
Debt service cover ratio
Under the terms of the term loan, Groupe Eurotunnel SA is required to meet certain financial covenants as described in paragraph 10.6 of the 2011 Registration Document.
At 30 June 2012, the debt service cover ratio (net operating cash flow less capital expenditure compared to net financial expenses on a rolling 12 month period) and the synthetic debt service cover ratio (calculated on the same basis but taking into account a hypothetical amortisation on the Term Loan) were 1.74 and 1.53 respectively. Thus the financial covenants for the period were respected.
Other financial indicators
Free cash flow
The free cash flow as defined by the Group in paragraph 10.8 of the 2011 Registration Document, is the net cash flow from operating activities less net cash flow from investing activities (excluding investment in subsidiary undertakings) and net cash flow from financing activities relating to the service of the debt (term loan and hedging instruments) plus interest received (on cash and cash equivalents and other financial assets). For the first six months of 2012, free cash flow amounted to ?45 million compared to ?61 million for the same period in 2011, a decrease of ?16 million mainly due to the absence of non-recurrent receipts relating to insurance indemnities received in 2011 (?66 million).
30 June | 30 June | 31 December | ||||
?'000 | 2012 | 2011 | 2011 | |||
Exchange rate ?/£ | 1.239 | 1.108 | 1.197 | |||
Net cash inflow from operating activities | 201,947 | 194,397 | 415,983 | |||
Net cash outflow from investing activities | (60,660) | (33,183) | (77,377) | |||
Investment in subsidiary undertakings | 569 | - | - | |||
Deposit for the purchase of assets of the SeaFrance group | 6,500 | - | - | |||
Interest paid on the term loan | (84,242) | (76,476) | (161,525) | |||
Interest paid on hedging instruments | (23,424) | (25,140) | (49,063) | |||
Interest received on cash and cash equivalents | 1,926 | 1,199 | 3,421 | |||
Interest received on other financial assets | 2,238 | 17 | 698 | |||
Free cash flow | 44,854 | 60,814 | 132,137 | |||
Long-term debt to asset ratio
The long-term debt to asset ratio as defined by the Group in paragraph 10.7 of the 2011 Registration Document, is the ratio between long-term financial liabilities less the value of the floating rate notes purchased as a percentage of tangible fixed assets. At 30 June 2012, the ratio remained stable at 57.4% compared to 31 December 2011 restated at the exchange rate used at 30 June 2012.
30 June 2012 | 31 December 2011 | |||||||
?'000 | restated | published | ||||||
Exchange rate ?/£ | 1.239 | 1.239 | 1.197 | |||||
Long-term financial liabilities | A | 3,947,178 | 3,939,095 | 3,871,622 | ||||
Other financial assets: floating rate notes | B | 152,861 | 134,241 | 131,931 | ||||
Long-term financial liabilities less other financial assets | A-B=C | 3,794,317 | 3,804,854 | 3,739,691 | ||||
Tangible fixed assets: property, plant and equipment | D | 6,611,680 | 6,627,525 | 6,626,841 | ||||
Long-term debt to asset ratio | C/D | 57.4% | 57.4% | 56.4% | ||||
* Concession fixed assets are converted using historic exchange rates.
Outlook
The main risks and uncertainties by which the Eurotunnel Group may be confronted in the remaining six months of the year have not evolved significantly compared to those identified in chapter 4 "Risk Factors" of the 2011 Registration Document filed with the Autorité des marchés financiers (the French financial markets authority) on 1 March 2012. The economic crisis, and in particular the crisis in public finances in some eurozone countries, make it difficult to assess the economic outlook.
During the first half of the year, the Group has to a certain extent benefited more from a pre-Olympic Games volume uplift, than from a transfer of ex-SeaFrance customers who, being more accustomed to the ferries, have mostly transferred towards the other operators. In this context, Eurotunnel has continued to successfully improve the visibility and the quality of its offer. Faced with increased competition on the cross-Channel market between Le Havre and Dunkirk, Eurotunnel remains confident that its offer, which is based on the quality of its service, remains clearly identifiable by its customers.
During the first half of 2012, the Europorte segment has experienced significant growth in revenues for its rail freight activities in France and the UK. During the second half, the Group plans to continue its development plan for this segment and, as part of this, Europorte continues to invest significantly in rolling stock and recruitment. These initiatives, together with an extensive review of its operating and administrative costs, should enable this segment to continue its progress towards breakeven.
On 2 July 2012, the Group acquired from the company in liquidation SeaFrance the three ships (the Berlioz, the Rodin and the Nord Pas-de-Calais) and entered into contracts with the cooperative company formed by ex-SeaFrance employees which will be responsible for their operation. This new activity should allow the Group to expand its offer on the cross-Channel market. The outlook for this activity in 2012 remains modest, but the structures and the organisation which will be put in place will create the basis for development in the future.
GROUPE EUROTUNNEL SA: HALF-YEARLY FINANCIAL REPORT FOR THE SIX MONTHS TO 30 JUNE 2012
Summary consolidated half-yearly financial statements
SUMMARY CONSOLIDATED HALF-YEARLY FINANCIAL STATEMENTS AT 30 JUNE 2012
Consolidated income statement
30 June | 30 June | 31 December | ||||||
?'000 | Note | 2012 | 2011 | 2011 | ||||
Revenue | 3 | 472,929 | 396,175 | 844,839 | ||||
Other income | - | 9,321 | 9,322 | |||||
Total turnover | 472,929 | 405,496 | 854,161 | |||||
Operating expenses | (159,398) | (128,780) | (266,496) | |||||
Employee benefit expense | (108,273) | (87,358) | (184,431) | |||||
Depreciation | (76,658) | (77,206) | (156,089) | |||||
Trading profit | 3 | 128,600 | 112,152 | 247,145 | ||||
Other operating income | 4 | 136 | 22,669 | 27,602 | ||||
Other operating expenses | 4 | - | (29) | (2,796) | ||||
Operating profit | 128,736 | 134,792 | 271,951 | |||||
Income from cash and cash equivalents | 1,866 | 1,475 | 3,628 | |||||
Gross cost of servicing debt | 5 | (127,603) | (130,201) | (267,466) | ||||
Net cost of financing and debt service | (125,737) | (128,726) | (263,838) | |||||
Other financial income | 6 | 12,752 | 6,625 | 16,840 | ||||
Other financial charges | 6 | (10,212) | (10,516) | (13,185) | ||||
Income tax expense | (302) | (291) | (496) | |||||
Result for the period | 5,237 | 1,884 | 11,272 | |||||
Result : Group share | 5,237 | 1,884 | 11,272 | |||||
Result : minority interest share | - | - | - | |||||
Profit per share (?) | 7 | 0.01 | N/S | 0.02 | ||||
Profit per share after dilution (?) | 7 | 0.01 | N/S | 0.02 | ||||
Consolidated statement of comprehensive income
30 June | 31 December | |||||
?'000 | Note | 2012 | 2011 | |||
Foreign exchange translation differences | (58,681) | (49,028) | ||||
Movement in fair value of hedging contracts | 12 | (112,565) | (335,643) | |||
Total items recycled in the net result * | (171,246) | (384,671) | ||||
Net loss recognised directly in equity | (171,246) | (384,671) | ||||
Profit for the period - Group share | 5,237 | 11,272 | ||||
Total comprehensive income/(expense) - Group share | (166,009) | (373,399) | ||||
Total comprehensive income/(expense) - minority interest share | - | - | ||||
Total comprehensive income/(expense) | (166,009) | (373,399) | ||||
* Neither in the first half of 2012 nor in 2011 are there any elements of comprehensive income that cannot be recycled in the net result.
The notes form part of these financial statements.
Consolidated balance sheet
30 June | 31 December | |||||
?'000 | Note | 2012 | 2011 | |||
ASSETS | ||||||
Goodwill | 17,564 | 16,965 | ||||
Intangible assets | 11,830 | 11,971 | ||||
Total intangible assets | 29,394 | 28,936 | ||||
Concession property, plant and equipment | 8 | 6,494,525 | 6,538,386 | |||
Other property, plant and equipment | 8 | 117,155 | 88,455 | |||
Total property, plant and equipment | 6,611,680 | 6,626,841 | ||||
Non-current financial assets | ||||||
Investment in subsidiary undertakings | 10 | 5 | ||||
Other financial assets | 9 | 155,272 | 133,467 | |||
Total non-current assets | 6,796,356 | 6,789,249 | ||||
Stock | 2,906 | 2,258 | ||||
Trade receivables | 127,257 | 105,960 | ||||
Other receivables | 47,328 | 44,575 | ||||
Other financial assets | 130 | 135 | ||||
Cash and cash equivalents | 267,226 | 275,522 | ||||
Total current assets | 444,847 | 428,450 | ||||
Total assets | 7,241,203 | 7,217,699 | ||||
EQUITY AND LIABILITIES | ||||||
Issued share capital | 10 | 224,229 | 224,229 | |||
Share premium account | 1,769,795 | 1,769,895 | ||||
Other reserves | 11 | 41,656 | 196,147 | |||
Profit for the period | 5,237 | 11,272 | ||||
Cumulative translation reserve | 140,132 | 198,813 | ||||
Total equity | 2,181,049 | 2,400,356 | ||||
Retirement benefit obligations | 22,010 | 26,187 | ||||
Financial liabilities | 12 | 3,947,178 | 3,871,622 | |||
Interest rate derivatives | 12 | 840,479 | 727,914 | |||
Total non-current liabilities | 4,809,667 | 4,625,723 | ||||
Provisions | 14 | 1,527 | 2,343 | |||
Financial liabilities | 12 | 36,359 | 5,127 | |||
Other financial liabilities | 2 | 7 | ||||
Trade payables | 162,849 | 159,084 | ||||
Other payables | 49,750 | 25,059 | ||||
Total current liabilities | 250,487 | 191,620 | ||||
Total equity and liabilities | 7,241,203 | 7,217,699 | ||||
The notes form part of these financial statements.
Consolidated statement of changes in equity
Other | ||||||||||||||
Issued | Share | equity | Cumulative | |||||||||||
share | premium | Consolidated | and similar | Retained | translation | |||||||||
?'000 | capital | account | reserves | instruments | earnings | reserve | Total | |||||||
1 January 2011 | 213,684 | 1,812,316 | 606,964 | - | (56,800) | 244,248 | 2,820,412 | |||||||
Transfer to non-distributable reserves | (56,800) | 56,800 | - | |||||||||||
Payment of dividend | (20,938) | (20,938) | ||||||||||||
Share issue costs | (1,232) | (1,232) | ||||||||||||
Allocation of loyalty shares for 2008 rights issue and adjustment of special reserve | 959 | 30 | (989) | - | ||||||||||
Conditional additional return on SDES | (404) | (404) | ||||||||||||
Exercise of 2007 Warrants | 12,986 | (4) | 12,982 | |||||||||||
Cancellation of treasury share | (3,400) | (40,811) | 44,211 | - | ||||||||||
Share based payments | 2,170 | 2,170 | ||||||||||||
Acquisition/sale of treasury shares | (39,235) | (39,235) | ||||||||||||
Result of the period | 11,272 | 11,272 | ||||||||||||
Input of conversion difference on partial redemption of loan with UK subsidiary | (3,593) | 3,593 | - | |||||||||||
Net profit / (loss) recorded directly in equity | (335,643) | (49,028) | (384,671) | |||||||||||
At 31 December 2011 | 224,229 | 1,769,895 | 196,147 | - | 11,272 | 198,813 | 2,400,356 | |||||||
Transfer to non-distributable reserves | 11,272 | (11,272) | - | |||||||||||
Payment of dividend (note 11) | (44,105) | (44,105) | ||||||||||||
Share issue costs | (100) | (100) | ||||||||||||
Share based payments | * 2,050 | 2,050 | ||||||||||||
Acquisition/sale of treasury shares | (11,143) | (11,143) | ||||||||||||
Result of the period | 5,237 | 5,237 | ||||||||||||
Net profit/(loss) recorded directly in equity | (112,565) | (58,681) | (171,246) | |||||||||||
30 June 2012 | 224,229 | 1,769,795 | 41,656 | - | 5,237 | 140,132 | 2,181,049 | |||||||
* Of which ?1,364,000 in respect of free shares (see note 10.3) and ?686,000 in respect of share options.
The notes form part of these financial statements.
Consolidated statement of cash flows
* The adjustment relates to the restatement of elements of the income statement at the exchange rate ruling at the period end
30 June | 30 June | 31 December | ||||||
?'000 | Note | 2012 | 2011 | 2011 | ||||
Result for the period: profit | 5,237 | 1,884 | 11,272 | |||||
Income tax expense | 302 | 291 | 496 | |||||
Other financial (income) and expenses | (2,540) | 3,891 | (3,655) | |||||
Net cost of financing and debt service | 125,737 | 128,726 | 263,838 | |||||
Other net operating income | (136) | (22,640) | (24,806) | |||||
Depreciation | 76,658 | 77,206 | 156,089 | |||||
Trading profit before depreciation | 205,258 | 189,358 | 403,234 | |||||
Exchange adjustment* | 2,026 | (1,047) | 10,377 | |||||
Increase in inventories | (639) | (634) | (833) | |||||
(Increase)/decrease in trade and other receivables | (16,679) | 1,388 | 260 | |||||
Increase in trade and other payables | 8,411 | 6,460 | 4,781 | |||||
Net cash inflow from trading | 198,377 | 195,525 | 417,819 | |||||
Other net operating cash flows | 3,742 | (922) | (1,630) | |||||
Taxation | (172) | (206) | (206) | |||||
Net cash inflow from operating activities | 201,947 | 194,397 | 415,983 | |||||
Payments to acquire property, plant and equipment | (61,563) | (53,070) | (97,503) | |||||
Sale of property, plant and equipment | 1,472 | 7 | 246 | |||||
Investment in subsidiary undertakings | (569) | - | - | |||||
Receipt of compensation for rolling stock | - | 19,880 | 19,880 | |||||
Net cash outflow from investing activities | (60,660) | (33,183) | (77,377) | |||||
Dividend paid | (44,105) | (20,938) | (20,938) | |||||
Share issue costs | (460) | (780) | (1,167) | |||||
Acquisition of floating rate notes | (18,400) | - | (128,258) | |||||
Draw down of bank loan | 12 | 18,500 | - | - | ||||
Payments relating to equity operations | - | (403) | - | |||||
Share buy back programme | (11,477) | - | (39,217) | |||||
Exercise of 2007 Warrants | 2,932 | - | 9,892 | |||||
Interest paid on Term Loan | (84,242) | (76,476) | (161,525) | |||||
Interest paid on hedging instruments | (23,424) | (25,140) | (49,063) | |||||
Interest received on cash and cash equivalents | 1,926 | 1,199 | 3,421 | |||||
Other interest received | 2,238 | 17 | 698 | |||||
Net proceeds from sale of treasury shares | 332 | 1,001 | (489) | |||||
Net cash outflow from financing activities | (156,180) | (121,520) | (386,646) | |||||
Increase in cash in period | (14,893) | 39,694 | (48,040) | |||||
Movements during the period
30 June | 30 June | 31 December | ||||
?'000 | 2012 | 2011 | 2011 | |||
Cash and cash equivalents at 1 January | 275,522 | 316,323 | 316,323 | |||
Increase in cash in the period | (14,893) | 39,694 | (48,040) | |||
Increase in interest receivable in the period | (133) | 245 | 214 | |||
Effect of movement in exchange rate | 6,730 | (10,495) | 7,025 | |||
Cash and cash equivalents at the end of the period | 267,226 | 345,767 | 275,522 | |||
The notes form part of these financial statements.
GROUPE EUROTUNNEL SA: HALF-YEARLY FINANCIAL REPORT FOR THE SIX MONTHS TO 30 JUNE 2012
Summary consolidated half-yearly financial statements
Notes to the summary financial statements
Groupe Eurotunnel SA (GET SA) refers to the holding company governed by French law, whose registered office is at 3 rue La Boétie, 75008 Paris, France. GET SA is the consolidating entity of the Group and its shares are listed on Euronext Paris and the London Stock Exchange. The shares will be admitted to trading on NYSE Euronext London on 19 July 2012 and their listing on the London Stock Exchange will cease on 20 July 2012.
The term "Group" or "Eurotunnel Group" refers to Groupe Eurotunnel SA and all its subsidiaries.
The principal activities of the Group are the design, financing, construction and operation of the Fixed Link in accordance with the terms of the Concession, and rail freight activity. The Concession will expire in 2086.
1 Important events
On 11 June 2012, the Paris Commercial Court decided to accept the offer made by the Eurotunnel Group for the acquisition of the assets of the SeaFrance group in liquidation which constitute mainly of the ships the Berlioz, the Rodin and the Nord Pas-de-Calais, for a total of ?65 million. The transfer of ownership of these assets occurred on 2 July 2012 and as a consequence, these assets were not accounted for in Groupe Eurotunnel SA's financial statements at 30 June 2012 (see note 16 below for significant post balance sheet events).
2 Basis of preparation and significant accounting policies
2.1 Statement of compliance
The half-year summary consolidated financial statements have been prepared in accordance with IAS 34 and accordingly do not contain all the information necessary for complete annual financial statements and must be read in conjunction with Groupe Eurotunnel SA's consolidated financial statements for the year ended 31 December 2011.
The half-year summary consolidated financial statements for 2012 were drawn up by the board of directors on 20 July 2012.
2.2 Scope of consolidation
The half-year summary consolidated financial statements for Groupe Eurotunnel SA and its subsidiaries are prepared as at 30 June. The basis of consolidation at 30 June 2012 is the same as that used for Groupe Eurotunnel SA's annual financial statements to 31 December 2011.
2.3 Basis of preparation and presentation of the consolidated financial statements
The half-year summary consolidated financial statements have been prepared using the principles of currency conversion as defined in the 2011 annual financial statements.
The average and closing exchange rates used in the preparation of the 2012 and 2011 half-year accounts and the 2011 annual accounts are as follows:
?/£ | 30 June 2012 | 30 June 2011 | 31 December 2011 | |||
Closing rate | 1.239 | 1.108 | 1.197 | |||
Average rate | 1.220 | 1.119 | 1.148 | |||
2.4 Principal accounting policies
The half-year summary consolidated financial statements have been prepared in accordance with IFRS. The accounting principles and bases of calculation used for these half-year summary consolidated financial statements are consistent in all significant aspects with those used for GET SA's 2011 annual consolidated financial statements, with the exception of the amendment to IAS 1 relating to the presentation of other comprehensive income (see the Consolidated statement of comprehensive income on page 7) which is compulsory for periods beginning on or after 1 July 2012 and which the Eurotunnel Group has decided to apply in advance at 30 June 2012.
The following amendment, published by the IASB and adopted by the European Union has not been applied in advance by the Eurotunnel Group:
- the amendment to IAS19 "Employee Benefits".
The main texts published by the IASB but not yet in force (not adopted by the European Union) and which therefore have not been applied early by the Group are as follows:
- IFRS 9 "Financial Instruments: Classification and measurement of financial assets and liabilities".
- IFRS 10 "Consolidated Financial Statements" which will replace IAS 27 "Consolidated and Separate Financial Statements" for the part related to consolidated financial statements as well as the interpretation SIC 12 "Consolidation - Special Purpose Entities".
- IFRS 11 "Joint Arrangements" which will replace IAS 31 "Interests in Joint Ventures" as well as the interpretation SIC 13 "Jointly Controlled Entities - Non-monetary Contributions by Venturers".
- IFRS 12 "Disclosure of Interests in Other Entities".
- IFRS 13 "Fair Value Measurement".
- Amendment to IAS 28 "Investments in Associates and Joint Ventures".
The analysis of the impacts of these standards on the financial statements of the Group is currently being studied, in particular those resulting from the revision of IAS 19 whose main consequence is the removal of the corridor method currently used by the Group leading to the correction of the provision and the opening equity for unrecognised actuarial differences.
3 Segment reporting
The Group is structured around the following two activities which correspond to the internal information reviewed and used by the main operational decision makers (the Executive Committee):
- the segment "Concession for the cross-Channel Fixed Link", and
- the segment "Europorte" which includes the activities of Europorte SAS and its subsidiaries (Europorte Channel, Europorte France, Europorte Proximité, Socorail, Eurosco and GBRf).
At 30 June 2012 | At 30 June 2011 | At 31 December 2011 | ||||||||||
?'000 | Revenue | Trading result | Revenue | Trading result | Revenue | Trading result | ||||||
Fixed Link | 369,729 | 134,619 | 323,782 | 116,427 | 686,964 | 255,643 | ||||||
Europorte | 103,200 | (6,019) | 72,392 | (4,275) | 157,875 | (8,498) | ||||||
Total | 472,929 | 128,600 | 396,175 | 112,152 | 844,839 | 247,145 | ||||||
4 Other operating income and (expenses)
30 June | 30 June | 31 December | ||||
?'000 | 2012 | 2011 | 2011 | |||
Net profit on disposal or write-off of assets | 44 | 19,890 | 19,333 | |||
Other | 92 | 2,779 | 8,269 | |||
Other operating income | 136 | 22,669 | 27,602 | |||
Other | - | (29) | (2,796) | |||
Other operating charges | - | (29) | (2,796) | |||
Total | 136 | 22,640 | 24,806 | |||
In 2011, the net profit on disposal or write-off of assets included ?19.9 million relating to the final compensation for the rolling stock considered irreparable following the fire in September 2008 and written off during 2008 and 2009.
5 Gross cost of servicing debt
30 June | 30 June | 31 December | ||||
?'000 | 2012 | 2011 | 2011 | |||
Interest on loans before hedging | 83,423 | 76,829 | 158,568 | |||
Adjustments relating to hedging instruments | 23,536 | 25,069 | 48,193 | |||
Effective rate adjustment | 470 | 414 | 878 | |||
Sub-total | 107,429 | 102,312 | 207,639 | |||
Inflation indexation of the nominal | 20,174 | 27,889 | 59,827 | |||
Total gross cost of servicing debt after hedging | 127,603 | 130,201 | 267,466 | |||
With effect from 28 June 2012, interest on loans before hedging includes the additional margin of 2% on the nominal value of tranches C1 and C2.
At the end of June, the inflation indexation of the nominal reflects the estimated effect of annual French and British inflation rates on the nominal amount of tranches A1 and A2 of the Term Loan as described in note U.1i of the annual consolidated financial statements at 31 December 2011.
6 Other financial income and (charges)
30 June | 30 June | 31 December | ||||
?'000 | 2012 | 2011 | 2011 | |||
Unrealised exchange gains* | 8,431 | 5,767 | 13,769 | |||
Realised exchange gains | 1,845 | 858 | 2,166 | |||
Interest received on floating rate notes | 2,381 | - | 836 | |||
Other | 95 | - | 69 | |||
Other financial income | 12,752 | 6,625 | 16,840 | |||
Unrealised exchange losses* | (9,083) | (9,631) | (12,060) | |||
Realised exchange losses | (1,129) | (885) | (1,125) | |||
Other financial charges | (10,212) | (10,516) | (13,185) | |||
Total | 2,540 | (3,891) | 3,655 | |||
* Resulting from the re-evaluation of intra-group debtors and creditors. 30 June 2012: net loss of ?652,000 (30 June 2011: net loss of ?3,864,000, 31 December 2011: net gain of ?1,709,000).
7 Earnings per share
30 June | 30 June | 31 December | ||||||
2012 | 2011 | 2011 | ||||||
Weighted average number: | ||||||||
- of issued ordinary shares | 560,572,129 | 531,602,705 | 535,886,473 | |||||
- of treasury shares | (9,226,383) | (8,219,714) | (6,531,074) | |||||
Number of shares used to calculate the result per share (A) | 551,345,746 | 523,382,991 | 529,355,399 | |||||
- conversion of 2007 Warrants | - | 35,588,160 | - | |||||
- share options | i | - | 125,591 | 54,658 | ||||
- free shares | ii | 1,737,307 | 664,600 | 651,698 | ||||
Potential number of ordinary shares (B) | 1,737,307 | 36,378,351 | 706,356 | |||||
Number of shares used to calculate the diluted result per share (A+B) | 553,083,053 | 559,761,342 | 530,061,755 | |||||
Profit (?'000) (C) | 5,237 | 1,884 | 11,272 | |||||
Profit per share (?) (C/A) | 0.01 | N/S | 0.02 | |||||
Profit per share after dilution (?) (C/(A+B)) | 0.01 | N/S | 0.02 | |||||
The calculations were made on the following bases:
(i) on the assumption of the exercise of the maximum number of options issued on 16 July 2010 and 21 July 2011 and remaining in issue at 30 June 2012 (when the average price of the share during the period exceeds the exercise price of options). The exercise of these options is conditional on attaining the targets described in note S of the consolidated financial statements at 31 December 2011; and
(ii) on the assumption of the acquisition of the maximum number of free shares issued to staff (see note 10.3 below).
8 Property, plant and equipment
At 30 June 2012, the Eurotunnel Group has not identified any indication of impairment.
Intangible assets are mainly composed of the rolling stock owned by the subsidiaries of Europorte.
9 Other financial assets
30 June | 31 December | |||
?'000 | 2012 | 2011 | ||
Floating rate notes | 152,861 | 131,931 | ||
Other | 2,411 | 1,536 | ||
Total non-current | 155,272 | 133,467 | ||
Accrued interest on floating rate notes | 130 | 135 | ||
Other | - | - | ||
Total current | 130 | 135 | ||
Other financial assets consist mainly of floating rate notes. As in 2011, during the first half of 2012, the Group acquired notes issued by Channel Link Enterprises Finance (CLEF), the structure that securitised the Group's debt in 2007. These purchases, carried out by way of private transactions for ?18 million, related to floating rate notes with a nominal value of ?20 million, representing an average discount of approximately 8%. These notes correspond to the securitisation of tranche C of the Group's debt and have the same characteristics in terms of maturity and interest as described in note P.2 of the consolidated financial statements to 31 December 2011.
The accounting value of the floating rate notes is made up as follows:
?'000 | Notes in £ | Notes in ? | Total | |||
Nominal value | 75,090 | 94,650 | 169,740 | |||
Discount (net of acquisition costs) | (7,264) | (9,615) | (16,879) | |||
Accounting value | 67,826 | 85,035 | 152,861 | |||
Maturity | 20/06/2046 | 20/06/2041 | ||||
-20/06/2050 | -20/06/2050 | |||||
Interest rate | (*) Libor +3.25% | (*) Euribor +3.25% | ||||
* 1.25% prior to 28 June 2012.
10 Share capital
10.1 Share capital evolution
At 30 June 2012 and 31 December 2011, the issued share capital of GET SA amounted to ?224,228,851.60 divided into 560,572,129 fully paid-up GET SA ordinary shares with a nominal value of ?0.40 each.
10.2 Treasury shares
Movements in the number of treasury shares during the period were as follows:
Share | ||||||
buyback | Liquidity | |||||
programme | contract | Total | ||||
At 1 January 2012 | 8,827,660 | 337,399 | 9,165,059 | |||
Share buyback programme | 1,867,709 | - | 1,867,709 | |||
Net purchase/(sale) under liquidity contract | - | (41,399) | (41,399) | |||
At 30 June 2012 | 10,695,369 | 296,000 | 10,991,369 | |||
Treasury shares held as part of the share buy back programme renewed by the general meeting of shareholders and implemented by decision of the board of directors on 26 April 2012 are allocated, in particular, to cover share option plans and the grant of free shares, whose implementation was approved by the general meetings of shareholders in 2010 and 2011.
10.3 Free shares
Following the approval by the general meeting of shareholders on 28 April 2011 of a plan to issue free shares, the board of directors of GET SA proceeded on 26 April 2012 to a second grant for a total of 1,102,360 GET SA ordinary shares (310 shares per employee) to all employees of GET SA and companies which are linked to it (with the exception of executive and corporate officers). The definitive acquisition of these shares by the employees is subject to them remaining in employment with the Group for a minimum period of 4 years.
Number of shares | ||
In issue at 1 January 2012 | 644,400 | |
Granted during the year | 1,102,360 | |
Cancelled during the year | (20,230) | |
Exercised during the year | - | |
Expired during the year | - | |
In issue at 30 June 2012 | 1,726,530 | |
Exercisable at 30 June 2012 | - | |
The assumptions used to measure the fair value of the free shares were as follows:
Fair value of free shares and assumptions | 2012 plan | 2011 plan | ||
Fair value of free shares on grant date (?) | 5.89 | 6.62 | ||
Share price on grant date (?) | 6.26 | 7.232 | ||
Number of beneficiaries | 3,556 | 3,302 | ||
Risk-free interest rate (based on government bonds) | 1.05% | 2.25% | ||
A charge of ?1,379,000 (at the exchange rate used to calculate the income statement) relating to the free shares was made in the half year accounts to 30 June 2012.
11 Changes in equity
Dividend
On 26 April 2012, Groupe Eurotunnel SA's shareholders' general meeting approved the payment of a dividend relating to the financial year ended 31 December 2011, of 8 cents of a euro per share. This dividend was paid on 25 May 2012 for a total of ?44.1 million.
12 Financial liabilities
The movements in financial liabilities during the period were as follows:
31 December | 31 December | Interest, | ||||||||||
2011 | 2011 | Draw down | Reclass- | indexation | 30 June | |||||||
?'000 | published | restated* | of loan | ification | and fees | 2012 | ||||||
Non-current financial liabilities | ||||||||||||
Term loan | 3,871,622 | 3,939 095 | - | (30,500) | 20,896 | 3,929,491 | ||||||
Other loans | - | - | 17,687 | - | - | 17,687 | ||||||
Total non-current financial liabilities | 3,871,622 | 3,939 095 | 17,687 | (30,500) | 20,896 | 3,947,178 | ||||||
Current financial liabilities | ||||||||||||
Term Loan | - | - | - | 30,500 | - | 30,500 | ||||||
Accrued interest on term loan | 5,127 | 5,214 | - | - | (172) | 5,042 | ||||||
Other loans | - | - | 813 | - | 4 | 817 | ||||||
Total current financial liabilities | 5,127 | 5,214 | 813 | 30,500 | (168) | 36,359 | ||||||
Total | 3,876,749 | 3,944,309 | 18,500 | - | 20,728 | 3,983,537 | ||||||
* The financial liabilities at 31 December 2011 (calculated at the year end exchange rate of £1=?1.197) have been recalculated at the exchange rate at 30 June 2012 (£1=?1.239) in order to facilitate comparison.
"Other loans" in the table above represent a bank loan of ?18.5 million taken out in June 2012 by Europorte SAS as part of the refinancing of the acquisition of certain locomotives by its subsidiaries. This loan carries a fixed rate of interest of 4.14% and is repayable over seven years.
The repayment of tranche B of the term loan will begin on 20 June 2013 (see notes U and V of the Group's consolidated financial statements at 31 December 2011) with a payment of ?30.5 million.
At 30 June 2012, the Group has not identified any new factors that would modify the information relating to the fair value of the financial liabilities as described in note W.2 of the annual consolidated financial statements to 31 December 2011.
Interest rate exposure
The Eurotunnel Group has hedging contracts in place to cover its floating rate loans (tranches C1 and C2) in the form of swaps for the same duration and for the same value (EURIBOR against a fixed rate of 4.85% and LIBOR against a fixed rate of 5.2%). No premiums were paid to obtain these contracts. The nominal value of the swaps is ?953 million and £350 million.
These derivatives generated a net charge of ?23,536,000 during the first six months of 2012 which has been accounted for in the income statement (a net charge of ?25,069,000 during the first six months of 2011).
These derivatives have been measured at their fair value on the balance sheet as follows:
Market value of hedging contracts | *Changes in market value | |||||
?'000 | 30 June 2012 | 31 December 2011 | ||||
Contracts in euros | Liability of 617 553 | Liability of 516 568 | (100 985) | |||
Contracts in sterling | Liability of 222 926 | Liability of 211 346 | (11 580) | |||
Total | Liability of 840 479 | Liability of 727 914 | (112 565) | |||
* Recorded directly in equity.
13 Litigation for which no provision has been made
The judgments of 2 August 2006, by which the Paris Commercial Court opened safeguard procedures in favour of TNU PLC, Eurotunnel Services Limited, EurotunnelPlus Limited, Eurotunnel Finance Limited and CTG, were subject to third-party opposition by certain Elliot companies. These third-party proceedings were rejected by the Paris Commercial Court in five judgments dated 15 January 2007. The appeal lodged by the Elliot companies in relation to this first series of decisions was rejected by five orders of the Paris Court of Appeal (Cour d'appel de Paris) delivered on 29 November 2007 (see paragraph 20.7.1 of the 2008 Reference Document). On 30 June 2009, the Supreme Court of Appeal (Cour de cassation) quashed the five orders of the Paris Court of Appeal in so far as they related to the admissibility of this appeal and referred the matter back to the Paris Court of Appeal.
On 26 June 2012, the Supreme Court of Appeal, within the limited scope of the appeal brought before it, rejected Elliott's claims and declared inadmissible the appeal on the ground of the alleged lack of knowledge of the legal basis on which the safeguard procedure was opened. The Paris Court of Appeal has confirmed its judgment of 15 January 2007 in respect of the following five companies: TNU PLC (now merged with GET SA), Eurotunnel Services Limited, EurotunnelPlus Limited, Eurotunnel Finance and CTG.
This procedure has not challenged the validity of the safeguard plan and its result is consistent with the assessment which had been made by the Group.
14 Provisions
Charge to | Release of | |||||||||
1 January | income | unspent | Provisions | 30 June | ||||||
?'000 | 2012 | statement | provisions | utilised | 2012 | |||||
Restructuring | 539 | 539 | ||||||||
Other | 1,804 | 37 | (853) | 988 | ||||||
Total | 2,343 | 37 | - | (853) | 1,527 | |||||
15 Related party transactions
15.1 Eurotunnel Group subsidiaries
All Eurotunnel Group subsidiaries were fully consolidated at 30 June 2012.
15.2 Other related parties
During the financial restructuring in 2007, the Eurotunnel Group concluded interest rate hedging contracts with financial institutions, in the form of swaps (see note 12 above). Goldman Sachs International was one of the counterparties to these hedging contracts, and at 30 June 2012 held 2.6% of the contracts, representing a charge of ?0.6 million in the first half of 2012 and a liability of ?22 million at 30 June 2012.
Two of Goldman Sachs's infrastructure funds (GS Global Infrastructure Partners I, L.P., and GS International Infrastructure Partners I, L.P., together known as GSIP) hold approximately 16% of GET SA's share capital at 30 June 2012 and 26% of voting rights.
16 Post balance sheet events
On 2 July 2012, the Eurotunnel Group acquired the assets of the SeaFrance group for a total of ?65 million. These assets consisted mainly of the ships the Berlioz, the Rodin and the Nord Pas-de-Calais.
GROUPE EUROTUNNEL SA: HALF-YEARLY FINANCIAL REPORT FOR THE SIX MONTHS TO 30 JUNE 2012
Declaration by the person responsible for the half-yearly financial report
DECLARATION BY THE PERSON RESPONSIBLE FOR THE HALF-YEARLY FINANCIAL REPORT AT 30 JUNE 2012
I declare that, to the best of my knowledge, these summary half-year consolidated financial statements have been prepared in accordance with applicable accounting standards and present fairly the assets, financial situation and results of Groupe Eurotunnel SA and of all the companies included in the consolidation, and that this half-yearly financial report presents fairly the important events of the first six months of the financial year, their effect on the summary half-year consolidated financial statements, the main transactions between related parties, and a description of the main risks and uncertainties for the remaining six months of the financial year.
Jacques Gounon,
Chairman and Chief Executive Officer of Groupe
Eurotunnel SA,
20 July 2012
STATUTORY AUDITORS' REPORT ON THE 2012 HALF-YEARLY FINANCIAL INFORMATION
This is a free translation into English of the statutory auditors' report issued in the French language and is provided solely for the convenience of English speaking readers.
This report should be read in conjunction with, and is construed in accordance with, French Law and professional auditing standards applicable in France.
To the Shareholders,
Following our appointment as statutory auditors by your Annual General Meeting and in accordance with article L. 451-1-2 III of the French Monetary and Financial Law ("Code monétaire et financier"), we hereby report to you on:
- the review of the accompanying condensed half-year consolidated financial statements of Groupe Eurotunnel SA for the six-month period ended 30 June 2012, as attached to the present report ;
- the verification of the information contained in the half-year management report.
These condensed half-year consolidated financial statements are the responsibility of the board of directors. Our role is to express a conclusion on these financial statements based on our review.
I. Conclusion on the financial statements
We conducted our review in accordance with professional standards applicable in France. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with professional standards applicable in France and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed half-year consolidated financial statements are not prepared in all material respects in accordance with IAS 34 - the standard of the IFRSs as adopted by the European Union applicable to interim financial information.
II. Specific verification
We have also verified the information given in the half-year management report on the condensed half-year consolidated financial statements subject to our review. We have no matters to report as to its fair presentation and consistency with the condensed half-year consolidated financial statements.
The statutory auditors | ||||||
Paris La Défense, 20 July 2012 | Courbevoie, 20 July 2012 | |||||
KPMG Audit | Mazars | |||||
Department of KPMG S.A. | ||||||
Philippe Cherqui | Jean-Marc Deslandes | |||||
Partner | Partner |
Groupe Eurotunnel
For media enquiries
John Keefe
consultant on + 44 (0) 1303 284491
press@eurotunnel.com
or
For
investor enquiries
Michael Schuller on +44 (0) 1303 288749
Michael.schuller@eurotunnel.com