HHLA continues future-oriented investments despite challenging conditions

Hamburg, 21 March 2024

_{Publication of figures for the 2023 financial year}
HHLA continues future-oriented investments despite challenging conditions

• CEO Angela Titzrath: “In a challenging market environment, HHLA is continuing to pursue its forward-looking investments to modernise its terminals and expand its European network.”
• Dividend proposal of € 0.08 per dividend-entitled class A share
• Group forecast for 2024: moderate revenue increase and EBIT within a range between € 85 million and € 115 million

Hamburger Hafen und Logistik AG (HHLA) recorded a drop in revenue and earnings in the 2023 financial year. The ongoing war in Ukraine, geopolitical tensions, high inflation and interest rate hikes burdened the economy and continued to dampen the recovery from the pandemic. This economic weakness is reflected in the company’s earnings. Group revenue decreased by 8.3 percent to € 1,446.8 million (previous year: € 1,578.4 million). The Group operating result (EBIT) decreased by 50.4 percent to € 109.4 million (previous year: € 220.4 million). The EBIT margin amounted to 7.6 percent (previous year: 14.0 percent). Profit after tax and minority interests came to € 20.0 million (previous year: € 92.7 million).

Angela Titzrath, HHLA’s Chief Executive Officer: “In light of the extremely difficult conditions for global trade, HHLA has performed well in 2023, particularly in comparison to its major competitors. This year we are facing uncertain market conditions again. Regardless of this, we are expanding our presence as a European logistics group and continuing to invest in modernisation projects focussing on the Port of Hamburg, the expansion of our European network and the development of sustainable logistics solutions.”

Port Logistics subgroup: performance in 2023

The listed Port Logistics subgroup recorded a decrease of 8.6 percent in revenue to € 1,408.9 million in 2023 (previous year: € 1,542.3 million). In addition to the decline in container throughput volumes, this was due to lower storage fees at the Hamburg container terminals, which had benefitted from supply chain disruptions in the previous year. The operating result (EBIT) decreased year-on-year by 53.9 percent to € 92.9 million (previous year: € 201.6 million). The EBIT margin amounted to 6.6 percent, down by 6.5 percentage points in a year-on-year comparison. Profit after tax and non-controlling interests decreased by 89.4 percent to € 8.7 million (previous year: € 82.1 million). Earnings per share thus came to € 0.12 (previous year: € 1.13).

In the Container segment, container throughput at HHLA’s container terminals decreased
year-on-year by 7.5 percent to 5,917 thousand standard containers (TEU) (previous year: 6,396 thousand TEU). At 5,687 thousand TEU, throughput volume at the Hamburg container terminals was down 6.3 percent on the same period last year (previous year: 6,071 thousand TEU). The main driver of this development was the decline in volumes for 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 only able to partially 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 18.6 percent (previous year: 19.8 percent).

The international container terminals reported a sharp decline in throughput volume of 29.1 percent to 231 thousand TEU (previous year: 326 thousand TEU). This was due in particular to the significant 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. Only grain ships operating under the Black Sea Grain Initiative were sometimes handled there. There has also been an absence of extra calls at the TK Estonia container terminal as an alternative to Russian ports in 2023 compared to the previous year. The notable increase in throughput volumes at the multi-function terminal HHLA PLT Italy was unable to offset this shortfall.

Segment revenue fell by 18.0 percent in the reporting period to € 708.8 million (previous year: € 864.2 million). In addition to the significant decrease in volumes, this was mainly due to shorter dwell times for containers being handled at the Hamburg terminals, which had led to increased storage charges in the same period of the previous year due to supply chain disruptions. As a result, the operating result (EBIT) decreased by 70.0 percent to € 47.2 million (previous year: € 157.3 million). The EBIT margin decreased by 11.5 percentage points to 6.7 percent (previous year: 18.2 percent).

In the Intermodal segment, container transport decreased by a total of 5.4 percent to 1,602 thousand TEU (previous year: 1,694 thousand TEU). Rail transport fell year-on-year by 3.1 percent to 1,365 thousand TEU (previous year: 1,409 thousand TEU). There was a decrease in road transport of 16.9 percent to 226 thousand TEU (previous year: 285 thousand TEU).

With a year-on-year increase of 4.2 percent to € 620.5 million (previous year: € 595.4 million), the development of revenue ran positively counter to that of transport volumes. This was due to the rise in transport revenue already witnessed in the previous year, which was adjusted to the increased costs for the purchase of services, in particular energy. The increase in rail’s share of HHLA’s total intermodal transportation from 83.2 percent to 85.2 percent also had a positive effect on revenue.

The operating result (EBIT) decreased by 23.6 percent to € 72.9 million (previous year: € 95.3 million). The EBIT margin fell by 4.3 percentage points to 11.7 percent (previous year: 16.0 percent). The main reason for the downward EBIT trend was the decrease in transport volumes. In addition to increased union wage rates, the expansion of operations in rail transport also had an adverse effect.

Real Estate subgroup: performance in 2023

HHLA’s properties in the Speicherstadt historical warehouse district and the fish market area in Hamburg reported a positive trend in 2023 with almost full occupancy in both districts.

Revenue rose by 5.3 percent in the reporting period to € 46.5 million (previous year: € 44.1 million). In addition to increased income from revenue-based rent agreements, this growth was also 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 fourth quarter. 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 also had a negative impact on earnings. The cumulative operating result (EBIT) fell accordingly by 12.5 percent to € 16.1 million (previous year: € 18.4 million).

Outlook for 2024

Due to the unpredictability regarding the future development of geopolitical tensions, the ongoing war in Ukraine and the effects of the announced realignment of syndicate structures of shipping companies, this forecast is subject to great uncertainty.

In the Port Logistics subgroup, a significant increase is expected for container throughput and a moderate increase for container transport compared to the previous year. All in all, a moderate year-on-year increase in revenue is expected. A significant increase is forecast for the Container segment and a moderate increase for the Intermodal segment.

The Port Logistics subgroup anticipates EBIT in the range of € 70 million to € 100 million between € 70 million and € 100 million in the 2024 financial year. A strong decrease is forecast for the Container segment and a strong increase for the Intermodal segment.

For the Real Estate subgroup, revenue is expected to remain at the prior-year level. A significant year-on-year increase is regarded as possible for the operating result (EBIT).

At Group level, HHLA expects a moderate increase in revenue and an operating result (EBIT) in the range of € 85 million and € 115 million.

At Group level, capital expenditure is expected to be in the range of € 400 million to € 450 million in 2024. The Port Logistics subgroup will account for € 360 million to € 410 million of this amount.

In the Container segment, investments will focus on expanding capacity at domestic and foreign terminals, and on expanding the Group’s own transport and handling capacities in the Intermodal segment.

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.

Dividend proposal for 2023

At the Annual General Meeting on 13 June 2024, the Executive Board and Supervisory Board will propose a dividend of € 0.08 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.

 

Key Figures 2023

HHLA Group
in € million		2023		2022		Change
Revenue		1,446.8		1,578.4		- 8.3 %
EBITDA		287.8		396.3		- 27.4 %
EBITDA margin in %		19.9		25.1		- 5.2 pp
EBIT		109.4		220.4		- 50.4 %
EBIT margin in %		7.6		14.0		- 6.4 pp
Profit after tax and minority interests		20.0		92.7		- 78.5 %
ROCE in %		4.6		9.7		- 5.1 pp

 

Port Logistics subgroup 1,2
in € million		2023		2022		Change
Revenue		1,408.9		1,542.3		- 8.6 %
EBITDA		262.0		369.6		- 29.1 %
EBITDA margin in %		18.6		24.0		- 5.4 pp
EBIT		92.9		201.6		- 53.9 %
EBIT margin in %		6.6		13.1		- 6.5 pp
Profit after tax and minority interests		8.7		82.1		- 89.4 %
Earnings per share in € 3		0.12		1.13		- 89.4 %
1 Before consolidation between subgroups
2 Listed class A shares
3 Basic and diluted

 

Container segment
in € million		2023		2022		Change
Revenue		708.8		864.2		- 18.0 %
EBITDA		146.6		257.1		- 43.0 %
EBITDA margin in %		20.7		29.7		- 9.0 pp
EBIT		47.2		157.3		- 70.0 %
EBIT margin in %		6.7		18.2		- 11.5 pp
Container throughput in thousand TEU		5,917		6,396		- 7.5 %

 

Intermodal segment
in € million		2023		2022		Change
Revenue		620.5		595.4		4.2 %
EBITDA		124.8		143.9		- 13.3 %
EBITDA margin in %		20.1		24.2		- 4.1 pp
EBIT		72.9		95.3		- 23.6 %
EBIT margin in %		11.7		16.0		- 4.3 pp
Container transport in thousand TEU		1,602		1,694		- 5.4 %

Key Figures 10–12 | 2023

HHLA Group
in € million		10–12 | 2023		10–12 | 2022		Change
Revenue		356.8		405.6		- 12.1 %
EBITDA		78.5		103.6		- 24.2 %
EBITDA margin in %		22.0		25.5		- 3.5 pp
EBIT		33.8		60.3		- 44.0 %
EBIT margin in %		9.5		14.9		- 5.4 pp
Profit after tax and minority interests		8.1		22.8		- 64.6 %

 

Port Logistics subgroup 1,2
in € million		10–12 | 2023		10–12 | 2022		Change
Revenue		347.5		396.5		- 12.3 %
EBITDA		73.4		97.4		- 26.6 %
EBITDA margin in %		21.1		24.6		- 3.5 pp
EBIT		31.1		56.3		- 44.9 %
EBIT margin in %		8.9		14.2		- 5.3 pp
Profit after tax and minority interests		5.6		20.8		- 73.2 %
Earnings per share in € 3		0.08		0.28		- 73.2 %
1 Before consolidation between subgroups
2 Listed class A shares
3 Basic and diluted

 

Container segment
in € million		10–12 | 2023		10–12 | 2022		Change
Revenue		174.6		211.1		- 17.3 %
EBITDA		44.4		60.4		- 26.5 %
EBITDA margin in %		25.4		28.6		- 3.2 pp
EBIT		20.0		35.6		- 43.9 %
EBIT margin in %		11.4		16.9		- 5.5 pp
Container throughput in thousand TEU		1,462		1,527		- 4.2 %

 

Intermodal segment
in € million		10–12 | 2023		10–12 | 2022		Change
Revenue		154.7		164.1		- 5.7 %
EBITDA		24.8		43.7		- 43.4 %
EBITDA margin in %		16.0		26.7		- 10.7 pp
EBIT		11.5		31.3		- 63.4 %
EBIT margin in %		7.4		19.1		- 11.7 pp
Container transport in thousand TEU		379		428		- 11.4 %

 

Contact:
Julia Hartmann
Head of Investor Relations

HAMBURGER HAFEN UND LOGISTIK AG
Bei St. Annen 1, D-20457 Hamburg, www.hhla.de

Tel: +49-40-3088-3397
Fax: +49-40-3088-55-3397
E-mail: investor-relations@hhla.de