Russia sanctions weigh on HHLA H1 performance

HHLA records drop in revenue and earnings in H1 2023

Hamburger Hafen und Logistik AG (HHLA) has recorded a drop in revenue and earnings in the first half of 2023.

The listed Port Logistics subgroup recorded a decrease of 7.1 per cent in revenue to €707.7 million ($774 million) in the first six months, compared to the previous year when revenue was €761.9 million ($833.5 million).

The operating result (EBIT) dropped by 55.8 per cent to €40.5 million ($44.3 million), compared to the previous year when revenue was €91.7 million ($100 million). The EBIT margin came in at 5.7 per cent, down by 6.3 percentage points in a year-on-year (YoY) comparison.

Profit after tax and non-controlling interests decreased by 93.0 per cent to €2.7 million ($2.95 million), with the previous year being at €38.4 million ($42 million). Earnings per share thus amounted to €0.04 ($0.0044), with the previous year being €0.53 ($0.58).

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In the container segment, container throughput at HHLA’s container terminals decreased YoY by 14.6 per cent to 2.87 million TEU. At 2.76 million TEU, throughput volume at the Hamburg container terminals was down 12.7 per cent.

HHLA said that the main driver of this development was the strong decline in volumes of the Far East shipping region. The positive momentum from North American freight volumes was unable to compensate for this.

Feeder traffic volumes were also strongly down on the previous year. In addition to the strong reduction in Swedish and Polish traffic, volumes from Russia were also absent due to the sanctions. The proportion of seaborne handling by feeders was down to 18.4 per cent (previous year: 20.9 per cent).

Throughput volume at the international container terminals fell by 43.9 per cent YoY to 113,000 TEU (previous year: 202,000 TEU).

The strong decline in cargo volumes was largely attributable to the Odessa terminal (CTO) after seaborne handling there was suspended by the authorities 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, and despite the strong increase in throughput volumes at the multi-function terminal PLT Italy, this was not sufficient to fully offset this shortfall.

Revenue in the container segment fell by 19.7 per cent in the reporting period to €352.2 million ($385.4 million).

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In addition to the strong decrease in volumes, this was mainly due to shorter dwell times for containers handled at the Hamburg container terminals compared to the previous year and the resulting drop in storage fees.

Against this background, the operating result (EBIT) fell by 76.2 per cent to €19.1 million ($20.9 million). The EBIT margin dropped by 12.9 percentage points to 5.4 per cent.

In the intermodal segment, container transport decreased by a total of 3.7 per cent to 819,000 TEU (previous year: 851,000 TEU).

Rail transport fell YoY by 2.5 per cent to 691,000 TEU (previous year: 709,000 TEU). All the main routes were affected by the decrease, with the northern German seaports and Polish traffic hit particularly hard. There was a decrease in road transport of 9.9 per cent to 128,000 TEU (previous year: 142,000 TEU).

With a marked YoY increase of 11.1 per cent to €313 million ($269 million), the development of revenue contrasted sharply with that of transport volumes.

According to HHLA, 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.

Mainly as a result of the decrease in transport volumes, EBIT fell to €41.1 million ($44 million), a drop of 3.9 per cent. The EBIT margin fell by 2.1 percentage points to 13.1 per cent (previous year: 15.2 per cent).

In July 2023, HHLA revised its projection for the current fiscal year based on preliminary statistics for the first six months.

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