HHLA closes challenging year 2022 with a good result

Hamburger Hafen und Logistik AG (HHLA) developed successfully in the 2022 financial year despite challenging conditions. Group revenue rose by 7.7 percent to € 1,578.4 million (previous year: € 1,465.4 million). The Group operating result (EBIT) decreased by 3.4 percent to € 220.4 million (previous year: € 228.2 million). Profit after tax and minority interests were 17.5 percent lower than in the previous year at € 92.7 million (previous year: € 112.3 million). Earnings per share thus amounted to € 1.23 (previous year: € 1.50). Return on capital employed (ROCE) came to 9.7 percent, 0.9 percentage points lower than the previous year. While container throughput decreased by 7.9 percent to 6,396 thousand standard containers (TEU) (previous year: 6,943 thousand TEU), transport volumes remained virtually constant at 1,694 thousand TEU despite operational disruptions regarding arrivals to German seaport terminals (previous year: 1,690 thousand TEU).

Angela Titzrath, Chief Executive Officer: “With our European logistics network, which includes seaports, the hinterland and rail networks, HHLA reliably fulfils its remit to ensure secure supply within Germany and Europe. We also managed to fulfil this remit during the challenging 2022 financial year, which was dominated by the impacts of the Russian war of aggression against Ukraine and disruptions to the global supply chain. In spite of this, HHLA achieved a good result and proved its efficiency. We are once again facing a year of much uncertainty, but working in logistics means being able to deal with volatility. We are looking ahead to the year with confidence and courage and will continue to push ahead with our investments in sustainable and innovative logistics solutions in order to reinforce the future viability of HHLA.”

In the publicly listed Port Logistics subgroup, revenue increased by 7.4 percent to € 1,542.3 million (previous year: € 1,435.8 million). The operating result (EBIT) decreased by 5.2 percent year-on-year to € 201.6 million (previous year: € 212.6 million), which still placed it well above the expected range of € 160 million to € 195 million. Much higher storage charges during the year as a result of the ongoing disruptions to global supply chains, which led to longer container dwell times at HHLA’s terminals in Hamburg, Tallinn and Trieste, had a positive effect on the development of our revenue and earnings in the financial year. Lower handling volumes, partly due to the effects of the Russian invasion on throughput at the terminal in Odessa, proved to be a drain on earnings. Added to this were general price hikes and additional material and personnel costs resulting from the higher storage load. Profit after tax and non-controlling interests decreased by 20.4 percent to € 82.1 million (previous year: € 103.1 million). Earnings per class A share thus came to € 1.13 (previous year: € 1.43).

During the 2022 reporting year, Group-wide container throughput decreased by 7.9 percent to 6,396 thousand TEU (previous year: 6,943 thousand TEU). At 6,071 thousand TEU, throughput volume at the three Hamburg container terminals was down 4.1 percent year-on-year (previous year: 6,328 thousand TEU). This reduction was primarily due to the decrease in cargo volumes to the Far East shipping region, as well as the decline in volumes as a result of the sanctions imposed against Russia after the war began. The proportion of seaborne handling by feeders was down slightly to 19.8 percent (previous year: 20.4 percent). The international container terminals reported a sharp decline in throughput volume of 47.1 percent to 326 thousand TEU (previous year: 615 thousand TEU). This was due to the strong decline in cargo volumes at the Odessa terminal after seaborne handling there was suspended by the authorities at the end of February 2022 following the Russian invasion.

By contrast, container transport volumes increased slightly to 1,694 thousand TEU (previous year: 1,690 thousand TEU). Rail transport rose by 2.2 percent year-on-year to 1,409 thousand TEU (previous year: 1,379 thousand TEU). Road transport saw a decrease in volume of 8.7 percent to 285 thousand TEU (previous year: 312 thousand TEU).

HHLA’s properties in the Speicherstadt historical warehouse district and the fish market area in Hamburg reported a positive trend in 2022 with almost full occupancy.

Revenue rose strongly by 15.9 percent in the reporting period to € 44.1 million (previous year: € 38.1 million). In addition to increased earnings from revenue-based rent agreements, this growth was mainly due to rising rental income from newly developed properties in the Speicherstadt historical warehouse district.

The cumulative operating result (EBIT) rose by 20.9 percent to € 18.4 million in the reporting period (previous year: € 15.3 million). This further positive development in earnings was primarily driven by revenue growth, while maintenance volumes were lower.

Given the uncertain further macroeconomic developments at the time of preparing this report, the following forecast is subject to a high degree of uncertainty. This applies in particular to developments in the geopolitical sphere and their impact in terms of inflation and economic sanctions. No impairment need has been assumed for the Container Terminal Odessa in Ukraine. Furthermore, HHLA assumes that revenue from storage fees in the Container segment is set to drop significantly from the start of the year.

For 2023, the Port Logistics subgroup expects a moderate year-on-year increase in both container throughput and container transport. After the development of revenue and operating result (EBIT) in the financial year 2022 was positively influenced by the significant rise in income from storage fees, revenue of the Port Logistics subgroup is expected to be on a par with the previous year in the current financial year. A slight year-on-year decline in revenue in the Container segment and a significant increase in the Intermodal segment are assumed. In addition, an operating result (EBIT) in the range of € 145 to 175 million is considered possible for the Port Logistics subgroup. Within this range, a strong decline in segment EBIT is expected in the Container segment and a moderate increase in the Intermodal segment.

For the Real Estate subgroup, revenue is expected to remain at the prior-year level with a significant decline in the operating result (EBIT).

At Group level, total revenue is expected to be on a par with the previous year with an operating result (EBIT) in the range of € 160 to 190 million.

In order to further increase efficiency and expand capacity in the Container and Intermodal segments, capital expenditure at Group level is expected to be within a range between € 250 to 300 million in 2023. The Port Logistics subgroup will account for € 220 to 270 million of this amount. In the Container segment, investments will focus on the efficient use of existing terminal space in the Port of Hamburg and the expansion of foreign terminals, and in the Intermodal segment on the expansion of the Group's own transport and handling capacities.

HHLA remains committed to its results-oriented dividend policy, which aims to pay out between 50 percent and 70 percent of annual net profit after minority interests in the form of dividends.

At the Annual General Meeting on 15 June 2023, the Executive Board and Supervisory Board will propose a dividend of € 0.75 per dividend-entitled class A share. HHLA therefore continues to pursue its dividend policy of distributing between 50 and 70 percent, where possible, of the Port Logistics subgroup’s relevant net profit for the year to its shareholders.

The Annual Report is available at:
report.hhla.de/annual-report-2022