Expected Group performance
Comparison with the forecast of the previous year
The forecast published in the 2017 Annual Report was achieved and partially surpassed. In terms of container throughput, the guidance of last year’s report was slightly exceeded due to the takeover of the container terminal in Tallinn. The figures for revenue and EBIT developed in line with expectations. Delays in delivery and order execution meant that capital expenditure budgeted for the reporting period was not utilised in full. Course of business and economic situation
Expected earnings position
The earnings forecast for the Group and the Port Logistics subgroup is primarily based on the anticipated macroeconomic and sector trends described above. Weaker global economic growth in general – caused in particular by the ongoing trade dispute between the US and China, the uncertain outcome of Brexit and the budget standoff between the Italian government and the European Union – and lower container throughput forecast by Drewry in particular will continue to be closely monitored.
Despite the restructuring of significant services and key clients on the Asia–Europe trades in 2017, there may be further changes in 2019, as well as temporary or structural shifts in services between the North Range ports. As a result of the takeover of North America services and the first full-year consolidation of throughput volumes of the TK Estonia container terminal (formerly Transiidikeskuse AS), HHLA expects a slight overall increase in container throughput in 2019. Slight year-on-year growth is also expected for container transport. At a Group level, this should lead to a slight increase in revenue.
The operating result (EBIT) of the Port Logistics subgroup is expected to rise significantly year-on-year in 2019, largely due to the changes in lease accounting (IFRS 16) as of 2019. Earnings for the subgroup will be shaped largely by the Container and Intermodal segments. Stable EBIT growth on a par with the previous year is expected for the Container segment, while significant growth is expected for the Intermodal segment.
The operating result (EBIT) of the Real Estate subgroup is expected to be around € 15 million due to scheduled, large-scale maintenance work that does not qualify for capitalisation. As a result of the effects described above, a substantial increase in the operating result (EBIT) is anticipated at Group level.
Earnings in the Port Logistics subgroup and at Group level may continue to be impacted by exchange rate effects reported below EBIT as part of the financial result.
The conditions determining infrastructure are vital to the competitiveness of the Port of Hamburg. In addition to the swift implementation of dredging work in the lower and outer stretches of the river Elbe, the modernisation and expansion of regional road and rail infrastructure is essential. Delays to these expansion measures may have a crucial impact on Hamburg’s competitive advantage as a rail port. Risk and opportunity report
Expected financial position
In principle, HHLA’s major investment activities can be scaled in line with demand. Due to the ongoing trend in ship sizes, the Group reserves the right to decide on investment activities that are not prompted purely by volume developments. Capital expenditure at Group level in 2019 is expected to be in the range of € 200 million, most of which will be attributable to the Port Logistics subgroup. In the Container segment, investments will primarily focus on the purchase of container gantry cranes, storage cranes and ground-handling vehicles for the container terminals in Hamburg. In the Intermodal segment, funds will be used to renew and expand the company’s own transportation and handling capacities.
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.
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.
In maritime logistics, a terminal is a facility where freight transported by various modes of transport is handled.
Revenue from sales or lettings and from services rendered, less sales deductions and VAT.
Earnings before interest and taxes.
The North European coast. In the broadest geographic sense, this is where all the international ports in Northern Europe from Le Havre to Hamburg can be found. The four largest ports are Hamburg, Bremerhaven, Rotterdam and Antwerp.
International Financial Reporting Standards.
Transportation via several modes of transport (water, rail, road) combining the specific advantages of the respective carriers.
Earnings before interest and taxes.
Interest income – interest expenses +/– earnings from companies accounted for using the equity method +/– other financial result.
Payments for investments in property, plant and equipment, investment property and intangible assets.
A crane system used to load and discharge container ships. As ships are becoming larger and larger, the latest container gantry cranes have much higher, longer jibs to match.
Crane units spanning their working area like a gantry, often operating on rails. Also called a storage crane when used at a block storage facility, or a rail gantry crane when used to handle rail cargo.