3. Consolidation, accounting and valuation principles

3.1 Basis for preparation of the financial statements

The Condensed Interim Consolidated Financial Statements for the period from 1 January to 30 June 2023 were prepared in compliance with the rules of IAS 34 Interim Financial Reporting.

The IFRS requirements that apply in the European Union have been met in full.

The Condensed Interim Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements as of 31 December 2022.

3.2 Principal accounting and valuation methods

The accounting and valuation methods used for the preparation of the Condensed Interim Consolidated Financial Statements correspond to the methods used in the preparation of the Consolidated Financial Statements as of 31 December 2022. When calculating the income tax expense during the year, the currently applicable tax rate is used in principle for domestic companies. For certain domestic companies, a tax rate is determined in order to calculate the income tax expense. This involves extrapolating the interim earnings before tax (EBT) of these companies for the calendar year and then applying Hamburg’s tax rate of 32.28 %. The effective tax rate of the entire Group for the interim reporting period to 30 June 2023 was 39.1 % (30 June 2022: 31.4 %).

As of 30 June 2023, € 7,837 thousand (31 December 2022: € 0 thousand) is recognised in current assets as non-current assets held for sale and liabilities directly associated with them as current liabilities in the amount of € 7,861 thousand (31 December 2022: € 0 thousand) due to the purchase agreement not yet being legally concluded. The purchase is expected to close in the third quarter of 2023 and therefore within the next twelve months. The change in recognition was associated with the transaction sought in relation to a property in Hamburg Altenwerder wholly owned by a subsidiary of the Holding/Other segment and comprises commercial properties which were constructed on third-party land as well as the associated liabilities. Each of these was measured at the lower of carrying amount and fair value less selling costs.

Based on the current degree of implementation for the organisational restructuring in the Container segment, HHLA remeasured the restructuring provision as of 30 June 2023. As a result of this remeasurement, the provision decreased by around € 10.9 million compared with 31 December 2022.

HHLA started applying the following new standards on 1 January 2023:

• IFRS 17 Insurance Contracts including Amendments to IFRS 17
• Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates
• Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting Policies
• Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12)
• Amendments to IFRS 17 Insurance Contracts: First-time Application of IFRS 17 and IFRS 9 – Comparative Information

No effects on the Interim Consolidated Financial Statements arose from the application of these new provisions.

Impairment of assets

As of the measurement date of 31 December 2022, a recoverable amount for the cash-generating unit HHLA PLT Italy S.r.l., Trieste, Italy (PLT CGU) was calculated as part of the annual testing of goodwill. This amount was approximately € 9.1 million higher than the carrying amount for valuation purposes. As the recoverable amount was close to the carrying amount, the management considered it possible as of the measurement date of 31 December 2022 that there could be a change in material assumptions which would lead to the carrying amount exceeding the recoverable amount.

The management regarded the fact that the recoverable amount was close to the carrying amount as indicative of the need to conduct another impairment test for the PLT CGU as of the measurement date of 30 June 2023. The estimate of cash flows in the detailed planning period was updated on the basis of new information. With a discount rate of 8.5 % and an unchanged growth factor of 1.0 %, the recoverable amount as of 30 June 2023 was still approximately € 7.7 million higher than the carrying amount for valuation purposes. The management therefore still considers it possible that there could be a change in material assumptions which would lead to the carrying amount exceeding the recoverable amount.

The overview below shows the necessary change in the various material valuation parameters which would lead to the recoverable amount being the same as the carrying amount:

Due to the ongoing Russia-Ukraine war, the management conducted another impairment test of the assets of SC Container Terminal Odessa in Odessa, Ukraine. For this purpose, the management developed updated scenarios. These scenarios continue to assume the continued existence of the container terminal. For both scenarios, it is assumed that seaborne container handling will not resume in 2023. As for the subsequent years, one scenario envisages a medium-term recovery and a return to the original volumes planned before the Russia-Ukraine war; the other scenario envisages a recovery in the short term. Both scenarios envisage the upper and lower points of possible developments based on current information; for this reason, they were taken as equally probable for the impairment test. The weighted cash flows were discounted at a rate of 13.6 %, while a growth factor of 1.0 % was applied. Based on the assumptions described, there is no need to recognise an impairment loss; the recoverable amount is sufficiently higher than the carrying amount for valuation purposes.

Material risks (expropriation, destruction, breach of contract) continue to be largely hedged by German government guarantees. It has been possible to expand hedging to include shareholder loans additionally granted in the meantime.

In the case of other cash-generating units, there are no indications for an impairment of assets, with the result that the Executive Board did not update the respective impairment calculations.

3.3 Changes in the group of consolidated companies

As of 31 March 2023, HHLA’s group of consolidated companies was expanded to include Survey Compass GmbH, Treben, Germany, which was acquired in January 2023 and has been assigned to the Logistics segment, and Adria Rail d.o.o., Rijeka, Croatia, which was acquired in March 2023 and has been assigned to the Intermodal segment. Further information about the acquisitions of the companies can be found under Note 4.

Likewise, as of 31 March 2023, Metrans Rail sp. z.o.o., Gadki, Poland, which was newly established in the 2022 financial year, was incorporated into HHLA’s group of consolidated companies for the first time and allocated to the Intermodal segment.

All of the companies mentioned are fully consolidated.

No other changes in the group of consolidated companies took place during the reporting period.