Respectable result despite serious economic crisis

In the first half of 2009 the current economic crisis led to steep downturns in total volumes, turnover and result at Hamburger Hafen und Logistik AG (HHLA). Revenues were 24.1 percent lower at 501 million euros, while operating result on continuing activities* fell by 51 percent to 95.1 million euros. Equity ratio at 40.4 percent remained at the previous year’s level.

“Despite a steep downturn in volumes handled and transported, in the first half of 2009 Hamburger Hafen und Logistik AG (HHLA) succeeded in keeping the fall in revenues within bounds, in achieving a nevertheless respectable result and in keeping stable its sound balance sheet structure. This is all the more remarkable in that HHLA is particularly affected by the repercussions of the current world economic crisis,” stated Klaus-Dieter Peters, chairman of the HHLA Executive Board, at the publication of HHLA’s interim report for the period January to June 2009. “We shall resolutely maintain this course during the months to come. We are thus in a position to successfully overcome the current world recession should it persist and at the same time to be prepared to actively embrace the opportunities of a fresh upswing.”

Outlook
While stabilization at a low level in the trend of volumes transported and handled has recently occurred, currently any clear signs of a sustained recovery are lacking. Against this background, HHLA at present continues to assume a substantial double-digit fall in volumes handled and transported in 2009. Should no substantial recovery set in, to achieve sales revenues in the region of one billion euros at group level for the year 2009 as a whole would appear to be an ambitious goal. On the basis of its programme of measures to reduce costs and to prolong investments, HHLA expects an EBIT margin from continuing activities in a range of between 14 and 16 percent and thus achieving a distinctly positive operating result.

Market environment
It is especially the Far East as well as Central and Eastern Europe as economic regions, which in recent years have decisively shaped the momentum in the world economy that led to over-proportional growth in transport and logistics chains via the Hamburg hub, that are reporting especially steep losses during the current recession. Seaborne feeder services from HHLA’s Hamburg container terminals to Russia, Poland and the Baltic states slumped by 49.8 percent, and services with the Far East by 30.7 percent. At 2.4 million standard containers (TEU), the total number of steel boxes handled by HHLA’s container terminals in
Hamburg and Odessa (Ukraine), that was also disproportionately hard hit by the recession, was 35.3 percent down on the previous year (3.7 million TEU). By comparison, the downturn for HHLA’s transport companies was smaller: at 716,000 TEU, volume for hinterland traffic was 23.5 percent below the previous year’s (936,000 TEU). 

Programme of measures
Designed to limit the repercussions of the crisis on profitability and jobs and at the same time to secure the preconditions for taking up any future options for growth, the programme of measures introduced at the beginning of the economic crisis is already proving effective:
- In the first half of 2009, for instance, we succeeded in disproportionately reducing the costs of materials, inclusive of those for external staff. Despite the high proportion of fixed costs that is normal for the sector, savings in operating expenses of the order of altogether 160 to 180 million euros are anticipated for the year 2009 as a whole.
- In view of the steep downturn in volumes, the volume of investments has been further staggered and reduced to a target figure of 220 million euros for 2009. At the same time, investments for long-term growth and for boosting efficiency, such as those for adapting to growing ship sizes, will be maintained unchanged.
- Since 1 July 2009, for the 3,500 staff at its Hamburg locations HHLA has been implementing its “Securing the Future” project that combines training and short-time working in exemplary form. Around 350 individualized training courses are already definitely planned.
Altogether over 2,000 staff will be deployed on flexible, needs-related working, or wholly or temporarily on short-time working. Along with the reduction of utilization of external staff and the discontinuation of overtime, in the second half of 2009 for the Hamburg location this will probably result in a reduction of work volume by around 20 percent on the same period of the previous year.
A survey of key Group figures (January to June 2009)
- Revenues fell by 24.1 percent to 501.0 million euros.
- Earnings before interest, taxes, depreciation and amortisation (EBITDA) fell by 39.9 percent to 143.7 million euros.
- Earnings before interest and taxes (EBIT) fell by 57.7 percent to 81.5 million euros.
- EBIT on activities maintained* (that excludes one-off expenditure on restructuring and earnings from discontinued HHLA activities via Lübeck into the Baltic region) fell by 51.0 percent to 95.1 million euros.
- At 43.7 million euros, earnings after tax were 64.3 percent below those for the corresponding period of the previous year.
- Equity ratio as at 30.6.2009 was 40.4 percent.
In the first half of 2009 revenues of the publicly-quoted Port Logistics sub-group, HHLA’s core business, fell by 24.7 percent to 486.8 million euros. EBIT on the maintained activities of the sub-group was 52.9 percent lower at 88.5 million euros. The Port Logistics sub-group thus generated 97 percent of Group turnover and 93 percent of Group EBIT.

(Source: Transport weekly)