HHLA volume gradually recovering in a still difficult market environment

The first quarter of 2010 began to show a gradual recovery in throughput and transport volumes. As expected, revenue of Hamburger Hafen und Logistik AG (HHLA) decreased further by 7.0 percent to 238.5 million Euros. EBIT declined in the same period by 30.6 percent to 35.4 million Euros. The EBIT margin of 14.8 percent and the equity ratio of 40.9 percent demonstrate HHLA’s considerable profitability and solid balance sheet in a continuing challenging economic environment.

“In the first quarter of 2010, Hamburger Hafen und Logistik AG successfully maintained its course in a still difficult environment.

Although revenue and EBIT were further weakened, as forecasted, by increased pressure on earnings, HHLA will remain profitable and economically stable in the current year,” declared Klaus-Dieter Peters, chairman of HHLA’s Executive Board on the occasion of the publication of the interim report for the months January to March 2010.

“In 2010, we will, within the framework of our long-term strategy, continue dedicated investments in extending our technological leadership as well as the quality and performance of our hinterland networks,” said Peters. Examples of this are the opening of a cutting-edge mega-containership berth in Hamburg, as well as the establishment of the IPN Inland Port Network joint venture in cooperation with Eurogate Intermodal. This company aims to gradually build up a network of inland terminals for maritime container traffic in Germany in the coming years.

Outlook 2010
The recovery in volumes of container throughput and transport accelerated towards the end of the first quarter 2010. Should this trend continue over the next few months, growth rates should improve in the course of the year. Based on this, HHLA now expects volume growth rates in the upper single-digit percentage range for 2010 as a whole.

First-quarter growth amounted to 0.5% in container throughput and 3.2% in container transport, which was partially caused by a statistical base effect with high volumes in January 2009.

Nevertheless, the course of business in 2010 will be exposed to uncertainties and risks of a relapse resulting primarily from the massive increase in the indebtedness of many national economies, but also the economic stimulus programmes coming to an end.

The modest and delayed economic recovery of many countries in Central and Eastern Europe dampens the prospects for short-term growth of container trades via Hamburg. In view of the growing proportion of ever larger containerships, the delay in the planned deepening of the Elbe waterway is also proving a growing burden for Hamburg.
Against this background, HHLA expects Group revenue for 2010 to be within reach of one billion Euros. An EBIT margin in the region of 15% should, thanks to the successful continuation and further development of the “Securing the future” project, be achievable.

Group key figures overview (January-March 2010)
- Revenue down by 7.0 percent to 238.5 million Euros.
- EBITDA (earnings before interest, tax, depreciation and amortization) fell by 19.6 percent to 61.3 million Euros.
- EBIT (earnings before interest and tax) were 30.6 percent lower at 35.4 million Euros.
- At 18.7 million Euros, profit after tax was 36.6 percent below the previous year.
- Equity ratio was 40.9 percent on 31.3.2010.

In the first quarter of 2010, revenue of the publicly quoted Port Logistics subgroup, HHLA’s core business, decreased by 7.2 percent to 231.3 million Euros. EBIT for the subgroup was 33.3 percent lower at 31.9 million Euros. The Port Logistics subgroup therefore generated 97 percent of Group revenue and 90 percent of Group EBIT.

(Source: Transport Weekly)