Financial Position

Balance Sheet Analysis

Compared with the end of 2014, the HHLA Group’s balance sheet total decreased only slightly as of the reporting date to € 1,775.7 million.

Balance Sheet Structure

At € 1,318.7 million, non-current assets were € 10.6 million higher than in the previous year (31 December 2014: € 1,308.1 million). This was mainly due to investments in property, plant and equipment during the reporting period. Depreciation of property, plant and equipment in particular, as well as currency translation adjustments for HHLA’s Ukrainian subsidiary, had the opposite effect. Deferred tax assets decreased due to changes in pension provisions caused by interest rates.

At € 457.0 million as of 30 September 2015, current assets were € 23.0 million below the corresponding figure on 31 December 2014 (€ 480.0 million). This decrease was mainly due to an € 84.9 million reduction in cash and cash equivalents. By contrast, receivables from related parties grew by € 41.5 million in connection with the cash clearing system.

Equity rose by € 37.9 million to € 584.6 million as of the reporting date (31 December 2014: € 546.7 million). This increase stemmed largely from profit after tax of € 77.4 million for the year to date. Losses from translation differences were roughly offset by the change in actuarial gains and losses less deferred taxes. Equity was reduced by the distribution of dividends totalling € 40.5 million. The equity ratio rose to 32.9 % (31 December 2014: 30.6 %).

The increase in non-current liabilities of € 73.1 million to € 992.0 million compared to the end of the year (31 December 2014: € 918.9 million) is due to the placement of promissory note loans with a volume of € 75.0 million in the third quarter. The funds were borrowed to take advantage of the current low interest rates and to minimise long-term interest rate risks in the Real Estate segment. The € 13.2 million reduction in pension provisions due to adjusted actuarial parameters had the opposite effect.

The decrease in current liabilities of € 123.4 million to € 199.1 million (31 December 2014: € 322.5 million) is mainly due to the repayment of current liabilities to related parties in the amount of € 65.0 million in the third quarter of 2015 following the placement of the above-mentioned promissory note loans. In addition, the payment of a profit share for 2014 to a non-controlling shareholder and loan redemptions reduced current financial liabilities by € 42.1 million.

Investment Analysis

In the reporting period, the investment volume amounted to € 111.8 million and was therefore significantly up on the previous year’s total of € 81.8 million. Property, plant and equipment accounted for € 104.9 million (previous year: € 75.5 million) of capital expenditure, while intangible assets accounted for € 6.9 million (previous year: € 6.4 million). The majority of the investments were for expansion work.

A large proportion of the capital expenditure in the first nine months of 2015 was for the purchase of new locomotives, the continued expansion of the Container Terminal Burchardkai and the acquisition of a new terminal site in Budapest.

For the remainder of the 2015 financial year, capital expenditure will continue to focus on increasing productivity in the existing terminal areas and expanding the high-performance hinterland connections in line with market demands.

Liquidity Analysis

The cash inflow from operating activities (operating cash flow) fell by € 44.7 million to € 139.8 million as of 30 September 2015 (previous year: € 184.5 million). This was due among other things to the lower operating result (EBIT), a slight increase in trade liabilities and a higher income tax payment.

Liquidity Analysis

Investing activities led to cash outflows of € 88.6 million (previous year: € 86.5 million). This increase of € 2.1 million was mainly due to higher capital expenditure on property, plant and equipment as against the previous year, which rose by € 37.7 million as a result of further investments in the Intermodal segment in particular. The € 30 million decrease in short-term bank deposits had the opposite effect.

Free cash flow, defined as the total of cash flow from operating activities plus the cash flow from investing activities, amounted to € 51.2 million at the end of the reporting period (previous year: € 98.0 million). It was therefore down € 46.8 million on the same period of 2014.

The cash outflow for financing activities amounted to € 71.8 million as of 30 September 2015 and was thus € 0.6 million higher than in the previous year (€ 71.2 million). The repayment of loans, including to a related party, the placement of promissory note loans and the redemption of lease liabilities meant that net cash outflow was € 5.0 million lower than in the prior-year period. This was offset by the € 5.6 million year-on-year increase in cash outflow from the higher dividend payment.

As of the reporting date, the changes described above resulted in financial funds of € 163.0 million (previous year: € 174.2 million), which were therefore below the figure at the beginning of the year (31 December 2014: € 185.6 million). Including short-term deposits, the Group’s available liquidity as of 30 September 2015 totalled € 233.0 million (previous year: € 254.2 million).