Expected Group Performance

Comparison with the Forecast of the Previous Year

Developments in the 2015 financial year slightly exceeded the forecast last updated in autumn 2015. The forecast for the 2015 financial year given in the Annual Report 2014, however, was not achieved in revenue, EBIT and container throughput. see Course of Business and Economic Situation

Expected Earnings Position in 2016

The earnings forecast for the Group and the Port Logistics subgroup is primarily based on the anticipated macroeconomic and sector trends described above.

For container throughput, HHLA expects figures in 2016 to be on a par with those of the previous year. A slight increase compared to the previous year is expected for container transport. At Group level, this is likely to result in revenue which is similar to that of the previous year.

The operating result (EBIT) in the Port Logistics subgroup is expected to be in the range of € 100 million to € 130 million in the year 2016. This includes one-off expenses due to a planned consolidation in the field of project and contract logistics.

The range of expected earnings will largely be determined by the Container segment. Also in light of the ongoing uncertainties in Ukraine. Developments in volume and revenue will correlate with the forecast range of earnings.

The operating result in the Logistics segment is expected to fall approximately € 15 million below the previous year’s result due to the consolidation mentioned earlier.

As the operating result of the Real Estate subgroup is expected to be on a par with 2015, Group EBIT is likely to be between € 115 million and € 145 million. Earnings in the Port Logistics subgroup and at Group level may continue to be burdened by exchange rate effects reported below EBIT as part of the financial result.

In a competitive environment of competing transport routes, the vertical dovetailing and optimisation of processes along the transport chain between the seaport and customers in the European hinterland will remain another key competitive factor for Hamburg as a logistics hub. HHLA is confident that the results achieved in 2015 confirm its strategy and will therefore continue to increase vertical integration by investing in its own rolling stock and facilities in 2016.

Despite the increasing handling demands caused by the trend in ship sizes, the company will strive to maintain high productivity in container handling. The focus will remain on improving operating performance by preparing the Container Terminal Burchardkai to handle container mega-ships and expanding block storage to cope with peak loads.

In order to achieve this, the necessary nautical accessibility is decisive for the competitiveness of the Port of Hamburg and thus for HHLA. Future developments will be hugely affected by the final decision of the Federal Administrative Court regarding the dredging of the lower and outer stretches of the river Elbe. The Federal Administrative Court will make its decision following a ruling by the European Court of Justice regarding the interpretation of the Water Framework Directive. The necessary planning supplement decision is expected to be submitted to the court in the first quarter of 2016. There have been no concrete statements made by either the court or those involved with the proceedings thus far about when a decision can be expected.

Should the expectations outlined in this forecast fail to materialise and lead to a substantially setback Group earnings position than the one described above, may result in additional value adjustments of assets.

Expected Financial Position

Due to the measures described above to increase value added in the Intermodal segment and to improve productivity in the Container segment, capital expenditure at Group level in 2016 is expected to be in the region of € 180 million, most of which will go towards the Port Logistics subgroup. HHLA’s investment activities can generally be scaled in line with demand. Due to the ongoing trend in ship sizes, the Group reserves the right to decide on investment activities which are not purely driven by volume developments.

HHLA will continue to pursue its yield-orientated dividend distribution policy which aims to pay out between 50 and 70 % of net profit for the year after non-controlling interests in the form of dividends.

In order to achieve this objective and enable further value-oriented growth, the preservation of financial stability is the company’s top priority. Based on available liquidity reserves and the positive cash flows generated by anticipated earnings, HHLA is confident that sufficient financial funds will continue to be available in future, which can be supplemented by borrowing where necessary.