Eurotunnel turned the corner today into its first annual, if modest, net profit since opening for rail traffic through the Channel tunnel between France and  Britain in 1994.

The company, which came close to drowning under its debt and was  restructured and refinanced, said that last year it had made a net  profit of €1m. 

Company chairman Jacques Gounon said that this year net profit  would be 'more than' €1m and that he intended to pay a first dividend in 2009 in respect of the results in 2008.

The tunnel, considered in some quarters as a modern wonder of  the world, was a giant feat of engineering but turned into a giant headache for its financiers, mainly bond holders, but also for thousands of shareholders, most of them French who lost most of  their investment.

In 2006 the company was granted protection from its creditors with a six-month reprieve under new bankruptcy legislation which enabled it to avert liquidation.

Eurotunnel, which provides the infrastructure for rail freight and passenger traffic, said that sales in the first quarter of 2008 were showing a gain of 15% on the figure for the same time last year to €187.6m.

Gounon said today that the company's only real problem had  been the weight of the debt burden. Now that this had been reduced, 'there is no longer a problem,' he said. 

'2007 shows that the new Groupe Eurotunnel is nothing like the old,' Gounon said, hailing the result which was boosted by writing off €3.3 billion in debt and increased cross-Channel traffic.

The company said revenues increased by 6% in 2007 to €775m and Gounon said in a statement that results for 2008 showed the group was making 'rapid progress'.

The 50.5km tunnel linking Folkestone, on the English coast, and Calais on the French side, has been hailed as one of the 'Seven Wonders of the Modern World' by the American Society of Civil Engineers. But the cost had overrun estimates by 80% when the six year construction was completed and the tunnel opened to rail  traffic in 1994.