Hamburg, 14 November 2023

_{Publication of interim statement January to September 2023}

Economic difficulties continue to impact HHLA’s business

• Chief Executive Officer, Angela Titzrath: ”The economic situation continues to impact HHLA’s business performance. We are therefore consistently working, even in unsettled times, on our efficiency programme and continuing our sustainability initiatives.”
• Container throughput decreases by 8.5 percent to 4,455 thousand TEU
• Container transport drops by 3.4 percent to 1,222 thousand TEU
• Group revenue of € 1,090.0 million

The revenue and earnings performance of Hamburger Hafen und Logistik AG (HHLA) declined in the first nine months of 2023. The ongoing war in Ukraine, geopolitical tensions, inflation and rising interest rates put pressure on consumer and industrial demand and are continuing to hinder the global economic recovery in the aftermath of the pandemic. HHLA’s business performance in the first half of 2023 already reflected the difficult conditions in the market. The significant drop in volumes due to the economic situation that was evident in the first half of 2023 abated in the Container segment thanks to a stronger third quarter, but continued to be challenging for container transport. In addition, shorter dwell times for containers handled at the Hamburg container terminals compared to the same period of the previous year resulted in reduced storage fees. Revenue in the HHLA Group reduced by 7.1 percent to € 1,090.0 million (previous year: € 1,172.7 million). The Group operating result (EBIT) decreased by 52.8 percent to € 75.6 million (previous year: € 160.1 million). The EBIT margin amounted to 6.9 percent (previous year: 13.7 percent). Profit after tax and minority interests came to € 11.9 million (previous year: € 69.8 million).

Angela Titzrath, Chief Executive Officer: “The subdued economic situation continues to impact HHLA’s business activities as an international logistics company. The resulting challenging macroeconomic framework conditions are therefore also reflected in the company’s results after the third quarter. However, it is all the more important to maintain our strategic course at times of multiple crises. Even in unsettled times, we are therefore working consistently on strengthening the company’s competitiveness and future viability and driving our sustainability efforts forward. As a result, Container Terminal Altenwerder in Hamburg was again certified as climate-neutral in the third quarter and the HHLA Pure network was further expanded by our rail subsidiary Metrans to ensure climate-friendly container transport.”

Port Logistics subgroup: Performance January to September 2023

The listed Port Logistics subgroup recorded a decrease of 7.4 percent in revenue to € 1,061.3 million in the first nine months (previous year: € 1,145.8 million). The operating result (EBIT) dropped by 57.4 percent to € 61.8 million (previous year: € 145.3 million). The EBIT margin amounted to 5.8 percent, down by 6.9 percentage points in a year-on-year comparison. Profit after tax and minority interests decreased by 94.9 percent to € 3.1 million (previous year: € 61.3 million). Earnings per share thus came to € 0.04 (previous year: € 0.85).

In the Container segment, container throughput at HHLA’s container terminals decreased year-on-year by 8.5 percent to 4,455 thousand standard containers (TEU) (previous year: 4,869 thousand TEU). At 4,286 thousand TEU, throughput volume at the Hamburg container terminals was down 6.9 percent on the same period last year (previous year: 4,605 thousand TEU). The main driver of this development was the decline in volumes of the Far East shipping region – China in particular. The positive momentum from North American cargo volumes and the throughput volumes of the Middle East were unable to offset this trend. Feeder traffic volumes were also strongly down on the previous year. In addition to the reduction in Swedish and Polish traffic, volumes from Russia were also absent due to the sanctions. The proportion of seaborne handling by feeders amounted to 18.4 percent (previous year: 20.5 percent).

Throughput volume at the international container terminals fell by 36.0 percent year-on-year to 169 thousand TEU (previous year: 264 thousand TEU). This was due in particular to the strong decline in cargo volumes at Container Terminal Odessa (CTO) after seaborne handling there was suspended by the authorities at the end of February 2022 following the Russian invasion. There has also been an absence of extra calls at the TK Estonia container terminal as an alternative to Russian ports in 2023. The notable increase in throughput volumes at the multi-function terminal HHLA PLT Italy was unable to offset this shortfall.

Segment revenue fell by 18.2 percent in the reporting period to € 534.3 million (previous year: € 653.2 million). In addition to the significant decrease in volumes, this was mainly due to shorter dwell times for containers handled at the Hamburg terminals, which had led to increased storage fees in the same period of the previous year due to supply chain disruptions. Against this background, the operating result (EBIT) decreased by 77.6 percent to € 27.3 million (previous year: € 121.7 million). The EBIT margin decreased by 13.5 percentage points to 5.1 percent (previous year: 18.6 percent).

In the Intermodal segment, container transport decreased by a total of 3.4 percent to 1,222 thousand standard containers (TEU) (previous year: 1,266 thousand TEU). Rail transport fell year-on-year by 1.6 percent to 1,037 thousand TEU (previous year: 1,054 thousand TEU). All the main routes were affected by the decrease, in particular Polish traffic. There was a decrease in road transport of 12.4 percent to 185 thousand TEU (previous year: 211 thousand TEU).

With a year-on-year increase of 8.0 percent to € 465.8 million (previous year: € 431.4 million), the development of revenue sharply opposed that of transport volumes. The reason for this was the rise in transport revenue in the previous year, which was adjusted to the increased costs for the purchase of services, in particular energy. The operating result (EBIT) decreased by 4.1 percent to € 61.4 million in the reporting period (previous year: € 64.0 million). The main reason for the downward EBIT trend was the decrease in transport volumes. The EBIT margin fell by 1.6 percentage points to 13.2 percent (previous year: 14.8 percent).

Real Estate subgroup: Performance January to September 2023

HHLA’s properties in the Speicherstadt historical warehouse district and the fish market area reported a further steady trend in the first nine months of the current financial year, with almost full occupancy in both areas.

Revenue rose significantly by 6.3 percent in the reporting period to € 35.0 million (previous year: € 32.9 million). In addition to increased income from revenue-based rent agreements, this growth was largely due to rising rental income from newly developed properties in the Speicherstadt historical warehouse district. This significant revenue growth was offset by a planned temporary vacancy for facade renovation to increase the energy efficiency of a property and increased maintenance expenses in the third quarter in particular. Moreover, higher depreciation and amortisation following a completed project development and demolition costs as part of preparations for a major construction project in the fish market area had a negative impact on earnings. The cumulative operating result (EBIT) fell accordingly by 7.3 percent to € 13.5 million in the reporting period (previous year: € 14.6 million).

Business forecast for 2023

Within the Port Logistics and Real Estate subgroups, HHLA’s actual economic development in the first nine months of 2023 was largely in line with the forecast published in the combined management report for 2022, which, at the time of preparing the annual report, was subject to considerable uncertainty due to geopolitical tensions and their impact on inflation and economic sanctions. In those markets of importance to the Port Logistics subgroup, the post-pandemic economic recovery in the current financial year has been weaker than forecast by leading economic institutes at the beginning of the year. HHLA’s business performance reflects the sentiment in the market. The significant drop in volumes due to the economic situation that was evident in the first half of 2023 abated in the Container segment during the third quarter but continued to be challenging for container transport.

Against the background of this development, a significant year-on-year decrease in container throughput continues to be expected for the Port Logistics subgroup. However, a moderate decrease compared with 2022 is anticipated for container transport (previously: on a par with the previous year).

A significant decrease in revenue continues to be expected. This development is the result of a strong volume-related decline in revenue of the Container segment which cannot be offset by a significant increase in revenue of the Intermodal segment.

Expectations for the operating result (EBIT) continue to range from € 100 million to € 120 million, although an operating result at the lower end of this range is now regarded as probable. Within this range, a strong year-on-year decrease is still expected for the Container segment and, due to the anticipated fall in transport volumes, a moderate year-on-year decrease (previously: slight decrease) is now expected for the Intermodal segment in their respective segment EBIT results.

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

Overall, a significant decrease in revenue is forecast at Group level. The operating result (EBIT) is still expected to be between € 115 million and € 135 million.

To increase efficiency at the Port of Hamburg as well as expand foreign terminals and the company’s own transport and handling capacities for rail carriage transport, capital expenditure in excess of original expectations has already been invested in the first nine months. As a result, capital expenditure at Group level for the 2023 financial year is now expected to be in the range of € 270 million to € 320 million (previously: in the range of € 250 million to € 300 million). With anticipated investments of € 240 million to € 290 million, the Port Logistics subgroup will account for the majority of this expenditure.

Key figures for January to September 2023

Key figures for July to September 2023