Eurotunnel has cut its annual earnings target by €25m (£21m) because of the collapse in the value of the pound after the Brexit vote.
The cross-Channel rail operator warned that further downward movements in the UK currency would hit its finances even harder, while it reported that Eurostar passenger traffic was down 3% over the last quarter.
But the Paris-based company insisted the British vote to leave the EU should not damage its long-term growth prospects and it said profits rose 4% to €249m in the first half of 2016.
“Month after month, Eurotunnel has broken traffic records, particularly for the truck shuttles. The tunnel has never been as highly utilised as it is today,” said Jacques Gounon, chief executive of Eurotunnel.
“Despite the financial market uncertainty generated by the United Kingdom voting to leave the European Union, the group remains confident in the performance of its economic model and in its outlook.”
Eurotunnel said its full-year earnings target of €560m, based on an exchange rate of €1.375 to the pound, had been cut to €535m, based on a currency exchange reduction to €1.273.
The pound has fallen below €1.19, meaning Eurotunnel may have to cut its targets further if there is no change on the currency markets. The decline in Eurostar traffic was attributed to terrorist attacks in Brussels and industrial action in France.
Wizz Air said it would increase UK capacity by 15% during the second half of the year, rather than the 30% it originally intended. The London-listed low-cost carrier blamed the weakness of the pound rather than weakness in passenger demand for its decision.
“What we are seeing is the problem of the weakness of sterling,” said the founder and chief executive, József Váradi, whose company reports in euros. Despite the planned cutbacks, Wizz expects meet its full-year net profit target of €245m to €255m.
The rowing back at Wizz follows decisions by easyJet and British Airways’ parent group, International Airlines Group, to issue profit warnings soon after the referendum.
In a separate development, there was uncertainty over the future of the huge Thames Enterprise Park in south Essex after one of the owners of the site confirmed that a potential but unnamed buyer had dropped out.
Greenergy and Shell jointly control the 400 acres of land bordering the Thames estuary, which has been earmarked for development into “a hub of industrial and energy-related businesses”. Among the projects planned was a “green” fuel scheme for BA.
Greenergy declined to comment on why the suitor had withdrawn but sources familiar with the deal said it was because of problems in the debt markets after the Brexit vote. Dozens of workers involved in demolition on the former refinery site could lose their jobs, it is feared.
Chris Brookhouse, chief executive of Thames Enterprise Park, said: “Discussions to sell the land to a third party have stalled as the exclusive prospective buyer has informed us that they no longer wish to continue the transaction on the expected timing.
“We have had to re-evaluate the extent of preparatory works we are undertaking on site at this time. The long-term prospects for redevelopment are very good.”
Michael Heseltine and members of the Thames estuary 2050 growth commission had visited the area as recently as last week. Rob Gledhill, leader of the local Thurrock council, said the news was disappointing.
