Foreword
Dear shareholders,
External conditions continued to severely hamper world trade in the first half of 2024: the marked slowdown in the Chinese economy, geopolitical tensions, military conflict in the Middle East and the ongoing war in Ukraine adversely impacted global economic growth. The situation was exacerbated by persistently high energy costs and mounting compliance requirements, which served to noticeably curb export-oriented industrial output in Germany. Whereas growth for the global economy is still expected to be moderate in the current year, forecasts for the German economy are already edging towards stagnation. Faced with these circumstances, a European logistics company like HHLA must constantly anticipate and deal with volatility. It is the new normal, and we have repeatedly had to rise to such challenges in recent years.
In the second quarter of 2024, the military conflict in the Red Sea region and the subsequent route adjustments once again led to numerous changes to the timetables of seaborne shipping lines. Despite the resulting need for adjustments, HHLA succeeded in raising the volume of containers handled by the Group in the first half of 2024. Both revenue and earnings of the Container segment were positively impacted by the temporary increase in terminal dwell times. The performance of hinterland traffic in the Intermodal segment recovered compared to the first quarter. Whereas traffic in the first quarter was down due to supply chain disruptions, it rose slightly year-on-year over the entire period from January to June. Revenue also made good progress. This was partly attributable to the fact that activities of the Austrian company Roland Spedition GmbH were consolidated as of June, following HHLA’s acquisition of a majority shareholding in April.
Despite all the operational challenges, we continued to press ahead with the modernisation of our terminals and the expansion of our network. At Container Terminal Burchardkai (CTB) in Hamburg, for example, we are currently in the process of switching to state-of-the-art technologies – such as automated container transporters, new container gantry cranes and cutting-edge storage cranes – while day-to-day operations continue as normal. This will not only make Burchardkai significantly more productive, but also more climate-friendly. Our IT systems are also being made ready for the future and the new terminal control software N4 was rolled out at CTB in May. Another important pillar of our strategy is the expansion of our European network. Our rail subsidiary Metrans has been making particularly strong progress in this regard for many years now. And in the second quarter, we also acquired a stake in the aforementioned Austrian intermodal service provider Roland Spedition. As well as being an excellent addition to our existing service portfolio, the acquisition highlights our commitment to developing and delivering holistic solutions for our customers – from the quayside, via rail and road to the end customer.
With regard to sustainability, we have put a further innovation into operation at Container Terminal Tollerort (CTT) in the Port of Hamburg: the first hydrogen filling station for port vehicles at a German seaport. Together with our partner companies in the “Clean Port & Logistics” cluster, we recently opened a testing ground at CTT to trial the use of hydrogen-powered vehicles in an operational environment. We also remain committed to the implementation of sustainable, future-oriented logistics solutions and processes at Container Terminal Altenwerder (CTA). After already electrifying the entire AGV fleet at CTA, we began the process of converting the terminal’s tractor units to electric drives last week. And last but not least, our freight forwarder CTD put its first electrically powered trucks into operation in June.
We remain committed to developing HHLA into a leading provider of sustainable, digitalised and networked logistics solutions in Europe.
We also made progress with regard to shipping company MSC’s planned investment in HHLA over the past six months. Since the transaction plans were announced in September 2023, we have actively pursued discussions with the City of Hamburg and MSC with the aim of structuring the planned transaction in such a way that it is in the best possible interests of HHLA and its stakeholders. This led to several rounds of intensive discussions and negotiations, resulting in a preliminary framework agreement for the Business Combination Agreement (BCA). In the meantime, we have also been able to successfully negotiate all points that were still outstanding. For example, HHLA has reached an agreement with MSC and the City of Hamburg regarding the terms of the BCA. It now contains significant provisions and commitments for the continued independent development of HHLA. These include, for example, the injection of 450 million euros of additional capital and firm commitments for our employees, as well as a pledge to safeguard the neutrality of the business model and to continue our strategy and investment planning. By successfully negotiating these far-reaching terms, we have been able to minimise the risks and secure new opportunities for HHLA. Subject to the fulfilment of conditions precedent, the transaction is expected to be closed in the current year. At the time of preparing this report, not all of the conditions had yet been met.
Based on our strategic alignment, HHLA is well positioned for the future. Even though this future appears challenging in view of the weak economic environment, the current crises and market changes, and although fundamental changes in the underlying conditions have forced us to adjust the time frame of our medium-term targets, we firmly believe in the opportunities that lie ahead for HHLA. We will therefore continue to work hard to make HHLA one of Europe’s leading providers of sustainable, digitalised and networked logistics solutions.
Yours,
Angela Titzrath
Chief Executive Officer