Posted on November 15, 2021
The revenue and earnings of Hamburger Hafen und Logistik AG (HHLA) recorded a strong performance in the first nine months of the year. A temporary spike in storage fees as a result of longer container dwell times at HHLA’s terminals in Hamburg had a particularly positive effect. This was caused by the ongoing disruptions to global supply chains. In addition, HHLA benefited from strong growth in container transport volumes. Against this backdrop, the Group operating result (EBIT) rose by 51.3 percent year-on-year to € 162.1 million. Despite a slight fall in revenue, the Real Estate subgroup increased its operating result (EBIT) slightly. Overall, the HHLA Group’s revenue rose by 12.4 percent to € 1,078.9 million in the reporting period (previous year: € 959.9 million).
Angela Titzrath, Chairwoman of HHLA’s Executive Board: “The ongoing, at times massive, ship delays are posing major challenges to our operations. Nevertheless, we are aware of our responsibility as a service provider for Germany as an industrialised nation. We are therefore working 24/7 at our facilities, with both equipment and personnel operating at high capacity, to ensure that companies and consumers receive their goods despite all the disruptions to global production and supply chains. We are operating on the basis that the difficulties will continue into 2022. Due to the ongoing coronavirus pandemic and weather-related effects, it is not possible to provide a precise forecast as to when supply chains will return to normal.”
Port Logistics subgroup: performance January to September 2021
The listed Port Logistics subgroup recorded a strong increase of 12.8 percent in revenue to € 1,057.5 million in the first nine months (previous year: € 937.4 million). The operating result (EBIT) rose year-on-year by 56.7 percent to € 151.3 million (previous year: € 96.6 million). The EBIT margin improved by 4.0 percentage points to 14.3 percent.
In the Container segment, the throughput volume at HHLA’s container terminals increased slightly by 1.6 percent to 5,165 thousand standard containers (TEU) (previous year: 5,086 thousand TEU). At 4,712 thousand TEU, throughput volume at the three Hamburg container terminals was up 1.3 percent on the same period last year (previous year: 4,654 thousand TEU). The positive development of cargo volumes was largely due to the Far East as well as North and South America shipping regions. The acquisition of an additional feeder service for the Baltic region in the third quarter led to a marginal increase in volumes on feeder services in the reporting period compared with the previous year. Feeder services accounted for 20.0 percent of seaborne handling in the reporting period, which was the same level as in the previous year.
Throughput volumes at the international container terminals in Odessa and Tallinn rose moderately by 4.8 percent to 453 thousand TEU (previous year: 432 thousand TEU), thereby returning to the pre-pandemic level of 2019. Only RoRo ships – and no container ships – were handled at the newest container terminal in the HHLA network in Trieste during the first nine months of 2021.
Segment revenue increased strongly year-on-year by 13.1 percent to € 620.0 million in the first three quarters of 2021 (previous year: € 548.4 million). The slight rise in volume of 1.6 percent was strongly exceeded by the increase in average revenue. Revenue per container handled at the quayside rose by 12.0 percent year-on-year. This was due to a temporary spike in storage fees as a result of ongoing ship delays. Against this backdrop, the operating result (EBIT) increased by 57.2 percent to € 107.9 million (previous year: € 68.7 million) despite the year-on-year rise in additional expenses as a result of the higher storage load. The EBIT margin improved by 4.9 percentage points to 17.4 percent.
In the Intermodal segment, container transport increased strongly by 11.1 percent to 1,254 thousand TEU (previous year: 1,129 thousand TEU). Rail continued to benefit more than road from the recovery in freight volumes that began in the second half of 2020. Rail transport increased by an impressive 14.0 percent year-on-year to 1,021 thousand TEU (previous year: 895 thousand TEU). Growth in the third quarter was slower, however, due to the strong recovery in volume already recorded in the same quarter last year. The growth in volume during the first nine months was widely diversified. In a persistently challenging market environment, road transport volume of 233 thousand TEU was on a par with the previous year (previous year: 234 thousand TEU).
At € 383.2 million, revenue was up by 9.9 percent year-on-year (previous year: € 348.7 million). However, this increase failed to match the development in transport volumes: although the advantageous rail share of HHLA’s total intermodal transportation rose from 79.3 percent to 81.4 percent, average revenue per TEU decreased as a result of changes to the structure of freight flows.
In light of the positive trend in volume and revenue, the operating result (EBIT) increased by 27.5 percent to € 79.5 million in the reporting period (previous year: € 62.4 million). This included a higher subsidy for route prices of approximately € 11 million granted retroactively in the third quarter of 2021.
Real Estate subgroup: performance January to September 2021
HHLA’s properties in the Speicherstadt historical warehouse district and the fish market area, which were much less affected by the strong fluctuations in the Hamburg market for office space during the coronavirus pandemic, maintained a stable trend with almost full occupancy in the first nine months of the year.
Revenue fell slightly by 2.1 percent in the reporting period to € 27.6 million (previous year: € 28.2 million). The revenue-based rent agreements, which due to the pandemic were only reactivated during the course of the year, and a planned revenue shortfall caused by the renovation of a property could not be fully offset by increased rental income from individual properties.
Despite this slight fall in revenue, the cumulative operating result (EBIT) rose by 2.0 percent to € 10.5 million in the reporting period (previous year: € 10.3 million). In addition to a slightly lower maintenance volume, receivables from the previous year which were written down in the course of the coronavirus pandemic had a positive effect on earnings.
Forecast for 2021 raised
HHLA recently raised its forecast for revenue and EBIT in the current financial year in an ad-hoc announcement on 20 October 2021. Extraordinary, non-recurring earnings effects in the Port Logistics subgroup were a significant factor in adjusting the annual forecast. The ongoing disruptions to global supply chains and major ship delays also led to a temporary spike in storage fees as a result of longer container dwell times at HHLA’s terminals in Hamburg. In addition, a higher subsidy for route prices of approximately € 11 million granted retroactively made a positive contribution to the Port Logistics subgroup’s earnings.
For the Port Logistics subgroup, a moderate increase in container throughput is expected again, as is a significant increase in container transport compared to the previous year. HHLA now expects revenue for the 2021 financial year to come to around € 1,410 million (previously: significant increase compared to the previous year). Against the background of the aforementioned extraordinary earnings effects, the forecast for the operating result (EBIT) of the Port Logistics subgroup is being raised and will come to around € 190 million (previously: range of € 140 million to € 165 million).
The revenue and operating result (EBIT) of the Real Estate subgroup are expected to be on a par with the previous year’s level (previously: slight increase in revenue).
At the Group level, a strong increase in revenue compared to the previous year is expected. Revenue is expected to come to around € 1,450 million. The forecast for the Group operating result (EBIT) was raised in response to the positive developments in the Port Logistics subgroup. It is now at around € 205 million (previously: range of € 153 million to € 178 million).
As a result of the ongoing disruptions to global supply chains, investments in assets for the Container and Intermodal segments planned for the 2021 financial year will be delayed until 2022. Investments of € 200 million are now expected at the Group level for 2021 (previously: range of € 250 to € 280 million). Around € 175 million of this is attributed to the Port Logistics subgroup (previously: € 220 to € 250 million).
Source: Hamburger Hafen und Logistik AG (HHLA)