47. Management of financial risks

To finance its business activities, the Group uses short, medium and long-term bank loans and lease and hire-purchase agreements as well as cash and short-term deposits. The Group has access to various other financial assets and liabilities, including trade payables and receivables arising directly from its business.

Interest rate and market price risk

As a result of its financing activities, the Group is exposed to an interest rate risk principally stemming from medium- to long-term borrowing at floating rates of interest. Managing the Group’s interest expenses involves a combination of fixed and floating-rate debt, depending on the market.

In the 2022 financial year, forward interest rate swaps were used to hedge the interest rate level for the planned drawdown of fixed-interest loans to finance investments. With the fixing of conditions in the corresponding loans in 2022, the interest rate swaps were terminated by financial settlement. These hedging transactions were designated in hedge accounting according to IFRS 9.

A promissory note loan taken out in the 2024 financial year is recorded in the balance sheet at amortised cost and is linked to ESG targets that can lead to an interest rate premium or interest rebate of 3 basis points depending on the degree to which the target is attained. In addition to fixed-interest tranches, this loan also includes tranches with variable interest rates with a term of five years. Interest rate swaps in the amount of € 113,000 thousand were taken out in order to hedge against changes in interest rates. These were also designated in hedge accounting. The market value came to € 348 thousand on 31 December 2025.

The hedging rate for all transactions in hedge accounting is 100 % as the full amount of the hedging transactions serves to hedge the underlying transactions at the same amount. The default risk does not have a dominant influence on changes in value. No ineffectiveness is expected. The changes in the market value of hedging transactions were recognised directly and in full in other comprehensive income.

Furthermore, two fully consolidated companies hold additional interest rate swaps for hedging variable-interest rate loans. These interest rate swaps are not designated as part of a hedge relationship.

As of the balance sheet date, 62.4 % (previous year: 71.0 %) of the Group’s borrowing was at fixed interest rates without taking into account the interest rate swaps mentioned above.

Since the fixed-interest financial instruments are not held at fair value, they are not subject to market price risks on the balance sheet.

A change in the variable interest rate affects the interest expenses arising from floating-rate loans as well as the interest income from overnight deposits and time deposit investments.

If the variable interest rate had been 1.0 percentage point higher as of the balance sheet date, interest expenses arising from floating-rate loans would have been € 786 thousand p.a. higher (previous year: € 2,300 thousand p.a.) and interest income from overnight deposits and time deposit investments would have been up to € 1,471 thousand p.a. higher (previous year: € 2,758 thousand p.a.).

Market price risks can, however, affect securities and equity investments in particular.

Exchange rate risk

Due to investments in countries outside the eurozone, changes in exchange rates can affect the balance sheet. Foreign currency risks on individual transactions are hedged by currency futures or currency options if required by a market analysis. The hedging transactions are in the same currencies as the hedged item. The Group only concludes currency futures contracts when specific claims or obligations exist, or can be expected with reasonable assurance.

As of the balance sheet date, currency hedging instruments comprised a volume of € 79,353 thousand (previous year: € 45,000 thousand) with maturities of up to 24 months. As of 31 December 2025, the market value was € 954 thousand (previous year: € - 502 thousand). In the reporting year, changes in value from these currency hedging transactions, which constitute financial assets and/or liabilities held at fair value through profit and loss, were recognised in the income statement. These transactions are not included in hedge accounting in accordance with IFRS 9.

Revenue in the HHLA Group is predominantly invoiced in euros, or in the national currencies of the European affiliates. Investments in these countries are largely transacted in euros.

Commodity price risk

The Group is primarily exposed to a commodity price risk when purchasing fuel. Depending on the market situation, the Group can arrange price hedges for part of its fuel requirements. This was not the case as of the balance sheet date nor as of 31 December 2024.

In addition to the market risks mentioned, there are financial risks in the form of credit and liquidity risks.

Credit risk/default risk

The Group only maintains customer relationships on a credit basis with recognised, creditworthy third parties. Clients who wish to complete transactions with the Group on a credit basis are subject to a credit check. Receivables are also monitored on an ongoing basis, with impairment allowances made if risks are identified. Therefore, the Group is not exposed to any additional significant default risks on receivables. The maximum default risk for the trade receivables and other financial assets is theoretically the carrying amount for the individual receivable. There is no significant concentration of default risks with individual customers.

In respect of some receivables, the Group may obtain securities in the form of guarantees that may be drawn upon as part of contractual arrangements if the counterparty falls into payment default.

The Group applies the simplified approach pursuant to IFRS 9 in order to measure expected credit losses, i.e. the expected lifetime credit losses are applied for trade receivables and contract assets. To measure the expected credit losses, trade receivables and contract assets are consolidated on the basis of shared credit risk characteristics and the number of days overdue.

If this is the case at all, the contract assets or liabilities held by HHLA are deemed insignificant, as was the case in the previous year. These contracts would have a term of up to one year.

The expected losses given default are based on the payment profiles of the transactions over a period of twelve months prior to 31 December 2025 and the corresponding historic defaults in this period. HHLA also factors anticipated changes to the economic environment into its calculations of these losses given default. Furthermore, HHLA has observed trade receivables on a case-by-case basis and made valuation allowances where necessary. The impact on the consolidated financial statements is immaterial. On this basis, the following impairment was calculated on trade receivables as of the balance sheet date and as of 31 December 2024:

Impairments on trade receivables showed the following trends:

Trade receivables are derecognised when a reasonable assessment indicates that there is no prospect of them being realised. The indicators pointing to no prospect of realisation following a reasonable assessment include the failure of a debtor to commit to a repayment plan agreed with the Group and, provided there is no information to the contrary, the failure to make contractually agreed payments after being in arrears for 360 days.

Impairment losses on trade receivables are shown as other operating expenses in the operating result. Amounts that have been written off and are then generated in subsequent periods are recognised as other operating income.

The default risk in the case of derivative financial instruments and cash, cash equivalents and short-term deposits is, in theory, that of counterparty default and is therefore equivalent to the carrying amounts of the individual instruments. The risk of default is considered very low since, as a rule, the Group only conducts derivative financial transactions and liquid investments with counterparties with good and regularly reviewed credit ratings. In addition, credit risks may arise if the contingent liabilities listed in Note 46 are incurred.

Liquidity risk

The Group guarantees sufficient liquidity at all times through medium-term liquidity planning, diversifying the maturities of loans and leases, and through existing lines of credit and funding commitments. If covenants have been agreed for individual loans, they are continually monitored to ensure compliance. HHLA will introduce measures it deems necessary to ensure that the covenants are met.

For details of the maturities of financial liabilities and liabilities to related parties, please refer to the table of residual maturities for non-current and current financial liabilities under Note 38 and the summary of non-current and current liabilities to related parties under Note 40.

For other non-current financial liabilities, an outflow of liquidity is expected for liabilities with a maturity of between one and five years. The discounting amount is calculated at approximately € 7.0 million (previous year: approximately € 11.8 million).

It is anticipated that the interest rate swaps in place on the balance sheet date will result in the following interest outflows in the future. In this context, an interest outflow is considered to be the difference between the amount to be paid and the amount to be received.

Financial instruments

Carrying amounts and fair values

The tables below show the carrying amounts and fair values of financial assets and financial liabilities, as well as their level in the fair value hierarchy; see also Note 6 and Note 7.

For financial assets and financial liabilities not held at fair value, there is no disclosure of the fair value in the fair value hierarchy where the carrying amount serves as a reasonable approximation of the fair value.

Where no material differences between the carrying amounts and fair values of the financial instruments are reported under non-current financial liabilities with details of fair value, they are recognised at their carrying amount. Otherwise, the fair value must be stated.

HHLA applied the option to measure financial assets as equity instruments not held for trading at their fair value directly in equity in accordance with IFRS 9. These assets are categorised as level 3 in the fair value hierarchy. The carrying amounts of the interests are regularly tested once a year to counteract the risk of impairment. In the previous year, interests in a corporation for which no direct stock market or fair value is available were valued at approximately € 12.5 million. With the share purchase and transfer agreement dated 16 December 2025, HHLA Next GmbH sold its shares under conditions precedent which were not yet fulfilled as of the balance sheet date. The carrying amount of the investment – the agreed sale price minus transaction costs – was estimated at € 1.5 million as of 31 December 2025.

Valuation methods and key unobservable input factors for calculating fair value

The table below shows the valuation methods used for level 2 and level 3 fair value measurement along with the key unobservable input factors utilised.

There was no reclassification between the individual valuation levels in the reporting year.