HHLA faces challenging start to 2023

2023/05/15 at 1:55 PM
Tags: HHLAMetrans

The start of 2023 was a challenging period for Hamburger Hafen und Logistik AG (HHLA) in the face of ongoing geopolitical tensions, EU economic sanctions and slower economic growth. The HHLA Group’s revenue fell by 5.6 percent to € 364.7 million in the first three months of the year (previous year: € 386.2 million). The operating result (EBIT) decreased year on year by 57.3 percent to € 22.9 million (previous year: € 53.7 million). The EBIT margin was 6.3 percent, down from 13.9 percent in the same quarter of the previous year. The main reasons for the fall in revenue and earnings were the reduced demand for container throughput, the decrease in storage fees at the Hamburg container terminals and the suspension of seaborne handling at the Odessa container terminal. Profit after tax and minority interests fell by 87.7 percent to € 2.8 million (previous year: € 22.8 million). 

Angela Titzrath, HHLA’s Chief Executive Officer: “A significant weakening in the demand for logistical services was already evident at the end of 2022. Geopolitical tensions, the Russian war of aggression against Ukraine, high inflation and the corresponding reduction in consumption in Europe are reflected in an economically weak start to the year worldwide. As we expected, container throughput and transport in the first quarter of the year were weak at HHLA as well. We expect to see a market recovery in the second quarter. On the earnings side, however, the Intermodal segment showed stable development. Overall, HHLA’s strategy of positioning itself broadly along the logistical value chain and continuously expanding its network has proven its worth. Despite the challenging times, HHLA continues to implement its strategy based on sustainability and profitable growth. In the first quarter, this involved expanding the network of our rail subsidiary Metrans, advancing our hydrogen activities, and investing in innovative solutions via HHLA Next.”

Port Logistics subgroup: performance January to March 2023

The listed Port Logistics subgroup recorded a significant decrease of 5.9 percent in revenue to € 355.1 million in the first three months (previous year: € 377.5 million). The operating result (EBIT) fell year-on-year by 62.5 percent to € 18.5 million (previous year: € 49.2 million). The EBIT margin decreased by 7.8 percentage points to 5.2 percent (previous year: 13.0 percent). Profit after tax and minority interests came to  0.4 million (previous year: € 20.3 million).

In the Container segment, the throughput volume at HHLA’s container terminals decreased overall by 18.6 percent to 1,416 thousand standard containers (TEU) (previous year: 1,740 thousand TEU). At 1,360 thousand TEU, throughput volume at the Hamburg container terminals was down 15.9 percent on the same period last year (previous year: 1,618 thousand TEU). The main driver of this development was the strong decline in volumes in the Far East shipping region, particularly China. The positive momentum from North American cargo volumes was unable to compensate for this. Feeder traffic volumes were also significantly down from the previous year. In addition to the Swedish and Polish routes, Russian volumes in particular were sharply down year-on-year as a result of the EU sanctions. The proportion of seaborne handling by feeders decreased moderately year-on-year to 18.1 percent (previous year: 21.2 percent).

At the international container terminals, throughput volume fell by 53.9 percent to 56 thousand TEU (previous year: 122 thousand TEU). This was due to the significant 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. There was also an absence of extra calls at the TK Estonia container terminal as an alternative to Russian ports in the first quarter of 2023.

Revenue in this segment fell by 18.8 percent year-on-year in the first three months of 2023 to € 175.8 million (previous year: € 216.4 million). This was mainly due to decreased volumes and shorter container dwell times at the Hamburg container terminals, which had had a positive effect on revenue in the same period last year due to supply chain disruptions.

Against this background, the operating result (EBIT) decreased by 84.9 percent to € 5.7 million (previous year: € 37.8 million). The international terminals TK Estonia and PLT Italy each made positive contributions to the operating result. The EBITDA margin fell by 14.2 percentage points to 3.2 percent (previous year: 17.4 percent).

In the Intermodal segment, container transport decreased by a total of 5.4 percent to 408 thousand standard containers (TEU) (previous year: 431 thousand TEU). Rail transport fell year-on-year by 5.6 percent to 340 thousand TEU (previous year: 361 thousand TEU). All main routes were affected by the decrease. While northern German seaports recorded sharp declines, only Rotterdam traffic managed a significant increase, albeit at a comparatively low level. There was a moderate decrease in road transport of 4.2 percent to 68 thousand TEU (previous year: 71 thousand TEU).

With a year-on-year increase of 13.4 percent to € 157.3 million (previous year: € 138.7 million), the development of revenue was positive compared with that of transport volumes. This was due to the rise in transport revenue in the previous year, which was adjusted to the increased costs for the purchase of services, in particular energy costs, at a later point in time.

The operating result (EBIT) decreased by 1.0 percent to € 21.4 million in the reporting period (previous year: € 21.6 million). The EBIT margin fell by 2.0 percentage points to 13.6 percent (previous year: 15.6 percent). The main reason for the downward EBIT trend was the decrease in transport volumes. The previous year’s result had been adversely affected by storm damage in February and disruptions to international supply chains.

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