HHLA Achieves Positive Results in a Challenging Year 2020

HHLA achieves a positive result in 2020. However, revenue and operating profit (EBIT) for 2020 remain significantly below the previous year. There was a strong decline in container throughput and a slight overall decrease in transport volume. A dividend proposal of €0.45 per A-share in the form of a choice dividend is being made. A moderate increase in revenue and operating profit (EBIT) is expected for 2021.

(Hamburg) Hamburger Hafen und Logistik AG (HHLA) achieved a positive consolidated operating profit (EBIT) of €123.6 million in a business year 2020 shaped by the Corona pandemic and its social and economic upheavals (previous year: €221.2 million). In addition to pandemic-related volume declines, changes in market share and provisions of around €43 million burdened the operating result. The provisions are used to implement restructuring measures in the container segment. Without the provisions, the consolidated EBIT would have amounted to around €167 million. Container throughput decreased by 10.6 percent compared to the previous year to 6,776 thousand TEU. The transport volume amounted to 1,536 thousand TEU, which was only slightly (-1.9 percent) below the high level of the previous year. The HHLA Group’s revenues decreased by 6.0 percent to €1,299.8 million (previous year: €1,382.6 million). The consolidated annual profit after shares of other shareholders fell by 58.8 percent to €42.6 million (previous year: €103.3 million).

Angela Titzrath, Chairwoman of the Executive Board of HHLA: “HHLA has coped well with the effects of the Corona pandemic so far. In 2021, we will reliably fulfill our supply mandate for the industrial nation Germany. Consumers and companies can rely on that. Regardless of changing framework conditions, we will resolutely continue the transformation process we have begun to meet our customers’ wishes even more efficiently and to develop new areas of growth.”

Subgroup Port Logistics

The publicly listed subgroup Port Logistics recorded a significant decline in revenue of 6.0 percent to €1,269.3 million (previous year: €1,350.0 million). Operating profit (EBIT) fell sharply by 46.0 percent to €110.3 million (previous year: €204.4 million), resulting in an EBIT margin of 8.7 percent. In addition to pandemic-related volume declines and changes in market share, the provision for restructuring in the container segment had a particularly burdensome effect. Without these provisions, EBIT in the subgroup would amount to around €153 million. The annual profit after shares of other shareholders decreased by 62.3 percent to €35.3 million (previous year: €93.6 million). The earnings per A-share amounted to €0.50 (previous year: €1.34).

At all HHLA container terminals, a total of 6,776 thousand standard containers (TEU) were handled in the 2020 financial year. This was 10.6 percent less than in the same period of the previous year (7,577 thousand TEU). At the three Hamburg terminals, the decline was 11.1 percent. Almost all shipping areas were affected by the pandemic-related volume losses, particularly the Far East shipping area, which is important for HHLA. The loss of a Far East service from mid-May 2020 further burdened volume development. The declining volumes in overseas traffic and the reduced feeder traffic to the Baltic Sea could not be compensated by increases in other shipping areas. The international terminals recorded only a moderate decline of 4.7 percent.

The container transport volume decreased only slightly by 1.9 percent to 1.54 million TEU (previous year: 1.57 million TEU). The decline in road transport was significantly stronger than in rail transport.

Subgroup Real Estate

Despite nearly full occupancy, HHLA’s real estate in the historic warehouse district and on the fish market area recorded a decline in revenues of 5.3 percent to €38.1 million (previous year: €40.2 million) in 2020. This was primarily due to granted partial waivers of rent deferrals during the pandemic.

With an almost constant maintenance volume, the revenue declines led to a reduction in operating profit (EBIT) of 21.5 percent to €12.9 million (previous year: €16.5 million). The annual profit fell by 24.4 percent to €7.3 million (previous year: €9.7 million). The earnings per S-share amounted to €2.70 (previous year: €3.57).

Outlook 2021

To contain the ongoing pandemic, measures have been taken worldwide on an unprecedented scale. Under the currently given framework conditions, a reliable forecast is therefore not possible. This particularly concerns the intensity and timing of the economic recovery.

Under the aforementioned premise, HHLA expects a moderate increase in both container throughput and transport for the Port Logistics subgroup compared to the previous year for the current financial year. A moderate increase in revenues compared to the previous year is also anticipated. After the operating profit (EBIT) in the 2020 financial year was burdened by provisions of around €43 million for an efficiency program in the container segment, an EBIT in the range of €140 to €165 million is targeted for the current financial year for the Port Logistics subgroup.

For the Real Estate subgroup, a slight increase in revenue compared to the previous year’s value is considered possible, as well as an operating profit (EBIT) at the previous year’s level.

At the group level, a moderate increase in revenue and an operating profit (EBIT) in a range of €153 to €178 million is expected.

To further increase productivity in the container and intermodal segments, investments at the group level of €250 to €280 million are expected for 2021. Of this, €220 to €250 million will mainly go to the Port Logistics subgroup. The investment focuses in the container segment are on implementing a restructuring and efficiency program, and in the intermodal segment on renewing and expanding its own transport and handling capacities.

For the year 2021, HHLA continues to adhere to its profit-oriented distribution policy, which provides for a payout of between 50 and 70 percent of the annual profit after shares of third parties.

Dividend Proposal for the Year 2020

The Executive Board and Supervisory Board will propose a choice dividend of €0.45 per dividend-bearing A-share to the Annual General Meeting on June 10, 2021 (previous year: €0.70). In determining this, the result was adjusted for the result-effective change in the restructuring provision of €43 million. The resulting payout ratio is thus at the lower end of the payout corridor of 50 to 70 percent of the annual profit after shares of third parties. Shareholders will also have the option, as in the previous year, to choose between a cash dividend or the subscription of new shares.

Photo: © HHLA