Difficult Operating Environment Puts a Strain on Container Throughput while Container Transport Increases

The operating result (EBIT) of Hamburger Hafen und Logistik AG (HHLA) dropped by 5.6 percent to € 123.9 million in the first nine months. Revenue declined by slightly less – 4.2 percent – and came in at € 868.9 million. Container throughput at the terminals in Hamburg and Odessa was down by 11.8 percent at 5.0 million standard containers (TEU). By contrast, the container transport of the intermodal companies increased by 2.4 percent to 996 thousand TEU compared to the first three quarters of the previous year.

“The persistently difficult global operating environment that Hamburger Hafen und Logistik AG is confronted with is by now having a clear impact. The resulting decrease in our seaborne container throughput contrasts with a further encouraging rise in hinterland container transport. However, the growth that we achieved in our Intermodal segment was no longer able to fully compensate for the fall in container throughput at our terminals in Hamburg and Odessa. We are responding to the current situation, examining our cost structures and reviewing our investment plans. However, we will continue to optimise our container terminals in Hamburg in line with the trend towards larger ships, and to further automate our facilities and processes while increasing their flexibility. We will also continue to invest in the expansion of our hinterland network and in our own traction according to demand. That is because the positive performance of the Intermodal segment, with a twofold increase in its operating result, vindicates our strategic decision to position this segment as a solid and equally strong pillar alongside the Container segment and to further expand it,” says Klaus-Dieter Peters, Chairman of HHLA’s Executive Board.

The segment’s operating result (EBIT) fell by 31.4 percent to € 83.5 million, declining much more than revenue, which was down by 8.2 percent at € 518.7 million. The operating result was impacted in particular by fixed costs, which assume a higher level of capacity utilisation and could not be reduced in the short term. Added to this were expenses for maintenance work that had been postponed until this year due to high capacity utilisation in 2014. The container terminals in Hamburg and Odessa handled 5.0 million TEU in the first three quarters, which was 11.8 percent less than in the previous year’s period. This primarily resulted from the 21.8 percent drop in feeder traffic with the Baltic region – in particular the decrease of almost 40 percent in traffic to and from Russia – and from lower volumes in traffic to and from Asia.

The Intermodal segment continued on its path of success, increasing its operating result (EBIT) by almost one hundred percent to € 44.0 million in the first nine months. Productivity gains, which were achieved through the use of the company’s own terminals and its own rolling stock, and an improved cost structure contributed significantly to this result. The order placed for ten additional multi-system locomotives and the foundation stone laid in October for the new hub terminal of the Intermodal subsidiary Metrans in Budapest are examples of the further expansion of the company’s own traction and the growth of HHLA’s hinterland network. The revenue of the Intermodal companies rose by 3.6 percent to € 272.8 million in the first three quarters. In a significantly declining market, HHLA’s transport companies were able to increase their road and rail-based transport volumes once again by 2.4 percent to 996 thousand TEU by increasing their market shares. The rail links between the Adriatic ports and Central and Eastern Europe, as well as to and from the Polish seaports, recorded above-average growth.

The Port Logistics subgroup recorded an encouraging profit after tax and minority interests – a figure of relevance to shareholders. It increased by 20.2 percent to € 49.3 million in the first three quarters of 2015 due to the positive overall performance of HHLA’s majority-owned companies. Earnings per Class A share of € 0.70 were correspondingly 20.2 percent above the previous year’s figure of € 0.59.

The Executive Board of Hamburger Hafen und Logistik AG resolved on 5 October 2015 to adjust its forecast for the full year. In view of the weak, declining volumes in the Container segment, it now expects a Group result (EBIT) in the region of € 150 million (previous guidance: on a par with the previous year, 2014: € 169.3 million). The company expects to fall well below the operating result of between € 125 million and € 135 million previously forecast for the Container segment. Strong earnings growth in the Intermodal segment is still anticipated. For the Port Logistics subgroup, an operating result (EBIT) in the region of € 135 million is expected (previous guidance: on a par with the previous year, 2014: € 155.6 million).

The interim report is available at:
report.hhla.de/interim-report-q3-2015