Annual Report 2023

Financing analysis

Financial management at the HHLA Group is handled centrally and serves the overriding objective of ensuring the Group’s long-term financial stability and flexibility. Group clearing pools the Group’s financial resources optimises net interest income and substantially reduces dependency on external sources of funding. Derivative financial instruments can be used to reduce the risk of changes in interest rates and, to a minor extent, to reduce currency and commodity price risks.

HHLA’s business model is dominated by a large proportion of property, plant and equipment with long useful lives. For this reason, HHLA mainly takes out medium- and long-term loans and leases to achieve funding with matching maturities. Pension provisions are also available for long-term internal financing.

At € 559.6 million as of the balance sheet date, liabilities from bank loans were above the prior-year figure of € 354.8 million. The Group drew on financing of € 248.5 million in the 2023 financial year (previous year: € 67.3 million). During the reporting year, payments for the redemption of loans amounted to € 34.2 million (previous year: € 50.0 million). Due to the diversified maturity profile and its stable liquidity position, the company had no significant refinancing requirements. The taking out of additional credit mainly results from investment activities.

As of the balance sheet date, liabilities from bank loans were denominated almost exclusively in euros. As a result of borrowing, certain affiliates had covenants linked to key balance sheet figures. These mostly require a minimum equity ratio or compliance with a maximum gearing ratio. Covenants are currently in place for approximately 23 % of bank loans. In the reporting period, the loan covenants were met at all agreed review dates.

Maturities of bank loans

by year and in € million

Maturities of bank loans (bar chart)

As of the balance sheet date, HHLA disclosed non-current liabilities to related parties totalling € 396.4 million (previous year: € 431.4 million). These mainly resulted from the recognition of the leasing liability to the Hamburg Port Authority (HPA).

The leases relate primarily to long-term agreements between the HHLA Group and either the Free and Hanseatic City of Hamburg or HPA for leasing land and quay walls in the Port of Hamburg and the Speicherstadt historical warehouse district.

Cash, cash equivalents and short-term deposits, the bulk of which is held centrally by the holding company, totalled € 197.5 million as of the balance sheet date (previous year: € 116.4 million). These funds are mainly invested at German financial institutions with verified high credit ratings as demand deposits, call money and short-term deposits. At the end of the reporting period, the Group had unused credit facilities amounting to € 173.7 million (previous year: € 171.3 million). The credit line utilisation rate amounted to 20.1 %. In the financial year under review, a syndicated loan of € 200.0 million was taken out as a credit line for operating equipment; as of the balance sheet date, € 164.0 million remained undrawn. The Group drew on credit facilities not used in the previous year in the amount of € 160.0 million in the period under review. Of the total cash and cash equivalents, an amount of € 0.5 million as of the reporting date (previous year: € 0.3 million) was subject to restrictions in Ukraine relating to the transfer of currency abroad.

As HHLA has a large number of borrowing options at its disposal outside of the capital market, the Group currently sees no need for an external rating. Instead, it provides existing and potential creditors with comprehensive information to ensure they can derive appropriate internal credit ratings. Furthermore, Deutsche Bundesbank once again confirmed the Group’s eligibility for central bank finance.

Public subsidies awarded for individual development projects that are subject to specific conditions are of minor importance in terms of their volume at Group level.

Dynamic gearing ratio
Financial debt (pension provisions + non-current and current liabilities to related parties + non-current and current financial liabilities – cash, cash equivalents, short-term deposits and receivables from HGV [cash pooling]) / EBITDA.
Equity ratio
Equity / balance sheet total.
Payments for investments in property, plant and equipment, investment property and intangible assets.

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