HHLA Increases Revenue and Earnings in Fiscal Year 2019

The Hamburger Hafen und Logistik AG (HHLA) was able to significantly increase both revenue and operating profit for the fiscal year 2019 compared to the previous year. A significant increase was also achieved in transport volume, while container handling saw a moderate rise. To conserve liquidity, a dividend of 70 cents per share has been proposed, which corresponds to a reduction of 12.5%. The outlook for 2020 is clouded by the Corona virus.

(Hamburg, 25.03.2020) The Hamburger Hafen und Logistik AG (HHLA) successfully concluded the fiscal year 2019. Despite a significantly deteriorating market environment, particularly in the second half of the year, the group revenue increased by 7.1 percent to 1.38 billion euros (previous year: 1.29 billion euros). Thanks to the successful integration of the Estonian terminal operator HHLA TK Estonia, acquired in 2018, and a slight improvement at the Hamburg terminals, container handling increased moderately. A significant increase was achieved in container transport. The operating profit (EBIT) of the group rose by 8.3 percent to 221.2 million euros (previous year: 204.2 million euros). The positive effect from the first-time application of IFRS 16 in EBIT amounted to approximately 14.4 million euros. The group net profit attributable to non-controlling interests decreased by 8.0 percent. For the current fiscal year, HHLA expects significant losses in revenue and earnings due to dramatically changing conditions.

Angela Titzrath, Chairwoman of the Executive Board of HHLA: “HHLA has successfully navigated many crises in its 135-year history. However, the shocks to the economy caused by the Corona pandemic present us with a challenge of an unprecedented dimension. We are aware of our responsibility as a service provider for the industrial nation of Germany. Therefore, we will implement the necessary measures with caution and prudence to steer HHLA through this challenging time. We remain committed to our long-term goals despite the changing conditions.”

Subgroup Port Logistics: Business Development 2019 The publicly traded subgroup Port Logistics achieved a significant revenue increase of 7.3 percent to 1.35 billion euros (previous year: 1.26 billion euros). The operating profit (EBIT) also increased significantly by 8.5 percent to 204.4 million euros (previous year: 188.4 million euros), resulting in a slight increase in the EBIT margin to 15.1 percent. The positive effect from the first-time application of IFRS 16 contributed approximately 13.4 million euros.

At the HHLA container terminals, a total of 7.6 million standard containers (TEU) were handled in the fiscal year 2019. This is 3.3 percent more than in the previous year (7.3 million TEU). The container handling at the three Hamburg container terminals slightly exceeded the high level of the previous year, while the handling at the international HHLA container terminals in Odessa (Ukraine) and Tallinn (Estonia) was significantly above the previous year’s level. However, the previous year’s figures are only partially comparable, as the container terminal in Tallinn was only integrated into HHLA’s consolidation circle at the end of the second quarter of 2018.

HHLA’s intermodal activities surpassed the strong previous year’s result with a transport volume of 1.57 million TEU (previous year: 1.48 million TEU), an increase of 5.7 percent. This result was supported by both rail and road transport.

Subgroup Real Estate: Business Development 2019 The HHLA real estate in the historic warehouse district and on the fish market area was able to slightly increase revenue again by 2.5 percent to 40.2 million euros (previous year: 39.3 million euros) in 2019, despite already having largely achieved full occupancy.

The significant increase in operating profit (EBIT) by 6.5 percent from 15.5 million euros in the previous year to 16.5 million euros was primarily due to the revenue increase from properties in both quarters, as well as the first-time application of IFRS 16.

Outlook 2020 The now globally occurring Corona pandemic has led to measures to contain the spread of the virus in affected countries on an unprecedented scale.

Both at the national level and in international transport, this leads to a contraction in economic activity, the depth and duration of which cannot be reliably estimated.

The contraction affects all sectors of the economy and thus also the international trade, which is important for HHLA.

A reliable forecast is not possible under these conditions, but it is to be expected that revenue and operating profit (EBIT) in the subgroup Port Logistics will be significantly below the previous year. The primary cause is likely to be at least temporarily strong declines in container handling and transport.

The HHLA also considers a significantly lower operating profit (EBIT) for the subgroup Real Estate to be possible. At the group level, a strong decline in operating profit (EBIT) is expected based on the previously mentioned effects.

Due to the uncertainties described above, HHLA is focusing on financial management and ensuring liquidity. HHLA will continuously review and adjust investment approaches and cost developments.

Another focus of management is on the health protection of employees and maintaining the operation of system-relevant critical infrastructures in the container and intermodal segments.

The Executive Board and Supervisory Board propose to the Annual General Meeting on June 10, 2020, a dividend of 0.70 euros per dividend-bearing A-share (previous year: 0.80 euros). This would result in a 12.5 percent reduction in the dividend compared to the previous year. Under the given circumstances, this measure – along with various others – serves to conserve liquidity. The payout ratio of 52 percent remains within the target range of 50 to 70 percent.

Photo: HHLA

https://hhla.de