HHLA continues its success, but uncertainties on the rise

Hamburger Hafen und Logistik AG (HHLA) continued its positive performance in the first nine months of 2019. The company recorded another significant increase in revenue and saw strong growth in its operating result. It was again possible to improve profitability year-on-year in a challenging market environment. Container throughput increased moderately due to the successful integration of the Estonian terminal operator HHLA TK Estonia, which was acquired last year, and improved slightly at the Hamburg terminals. A significant rise in container transport was achieved. Including a significant increase in revenue from the Logistics segment and a once again moderate increase in revenue from property management, this led to total revenue of € 1,044.6 million (+ 8.3 percent). The operating result (EBIT) improved strongly by € 19.3 million, or 12.4 percent, to € 175.4 million. The positive effects of the initial application of IFRS 16 in the EBIT amounted to approximately € 10.6 million.

Angela Titzrath, Chairwoman of HHLA’s Executive Board: “As encouraging as our business trend is this year, we must still keep a realistic view of the changing conditions in which we operate. The challenges facing the entire transport and logistics industry remain significant. We are approaching these challenges with confidence and vigour and are continuing to work towards our aim and mission of making HHLA ready for the future. This means that we will strengthen our core business and tap into new, highly promising sectors.”

The listed Port Logistics subgroup recorded an 8.6 percent increase in revenue to € 1,020.2 million in the first nine months. It was able to grow its operating result (EBIT) by 13.3 percent to € 162.7 million. The EBIT margin improved by 0.6 percentage points to 15.9 percent.

In the Container segment, container throughput increased moderately by 4.0 percent in the first nine months of 2019 to 5,730 thousand standard containers (TEU). In addition to the successful integration of the terminal in Tallinn, there was also a small improvement in throughput volume in Hamburg which contributed to this development. Due to the increase in volume combined with an improvement in average revenue compared to the previous year, revenue increased by 6.0 percent to € 605.5 million. This was caused primarily by an increase in the rail share. The operating result (EBIT) increased by € 9.7 million or 9.4 percent year-on-year to € 112.6 million. Of this increase, approximately € 8.0 million is attributable to the application of IFRS 16. The EBIT margin improved by 0.6 percentage points to 18.6 percent.

In the first nine months of 2019, HHLA’s transport companies achieved significant growth in the Intermodal segment. With an increase of 7.8 percent, container transport rose to 1,184 thousand standard containers (TEU). This trend was driven by growth in both rail and road transport. Compared with the previous year, rail transport increased by 7.6 percent to 930 thousand TEU. In a market environment that remains difficult, road transport grew by 8.8 percent to 254 thousand TEU due to the strong increase in delivery volumes. At € 367.9 million, revenue was up 13.5 percent on the prior-year figure and thus performed much better than transport volume. In addition to price adjustments, this strong increase in revenue was due in particular to longer transport distances, while the rail share was largely unchanged from the previous year at 78.5 percent. The operating result (EBIT) rose by 16.5 percent to € 76.1 million in the reporting period. This marked increase is primarily due to the positive trend in volume and revenue. Additionally, lower route prices in Germany made it possible to increase further the capacity utilisation of train systems. The application of IFRS 16 did not have a major impact on the positive EBIT trend.

As a result of the Group’s performance in the first nine months of 2019, the HHLA Executive Board is updating its assessment of expected earnings for the Group in 2019.

In terms of volume, HHLA now expects a moderate increase in container throughput (previously: slight increase) and a significant increase (previously: slight increase) in container transport. In light of these figures, a significant increase (previously: slight increase) in Group revenue is now expected for 2019.

Whereas HHLA continues to expect a significant increase in operating result (EBIT) at Group level, a moderate increase is now expected for the Container segment (previously: in the region of the previous year) and a strong increase for the Intermodal segment (previously: significant increase).

HHLA’s properties in the Speicherstadt historical warehouse district and the Fischmarkt area continued their positive trend. Revenue again increased moderately by 2.1 percent year-on-year to € 29.9 million as a result of virtually full occupancy in both districts this year as well as last year. The increase in planned and implemented maintenance work was offset by revenue growth from properties in the Speicherstadt historical warehouse district. The slight increase of 1.3 percent to € 12.5 million in the operating result (previous year: € 12.3 million) can mainly be attributed to the implementation of IFRS 16.

The operating result (EBIT) for the Real Estate subgroup is still expected to be around € 15 million due to large-scale maintenance work scheduled for 2019 that does not qualify for capitalisation.

The Interim Statement is available at:
report.hhla.de/interim-statement-q3-2019