15 May (Lloyd's List) - FALLING demand amid a weak economic environment dragged on performance at Hamburger Hafen und Logistik, known as HHLA, in the first quarter of this year, slashing revenues and profits.
“A significant weakening in the demand for logistical services was already evident at the end of 2022,” said HHLA chief executive Angela Titzrath.
“Geopolitical tensions, the Russian war of aggression against Ukraine, high inflation and the corresponding reduction in consumption in Europe are reflected in an economically weak start to the year worldwide. As we expected, container throughput and transport in the first quarter of the year were weak at HHLA as well.”
Group revenues were down 5.6% to €364.7m ($396.1m) in the first quarter, while earnings before interest and tax fell by almost 60% to €22.9m.
HHLA put the declines down to the reduced demand for container throughput, the decrease in storage fees at the Hamburg container terminals and the suspension of seaborne handling at the Odesa container terminal, which was closed due to the war in Ukraine.
In the container segment, throughput at HHLA’s container terminals decreased by 18.6% to 1.4m teu. Volumes at Hamburg fell 15.9% to 1.3m teu.
“The main driver of this development was the strong decline in volumes in the Far East shipping region, particularly China,” HHLA said. “The positive momentum from North American cargo volumes was unable to compensate for this.”
Feeder volumes were also significantly down from the previous year, with Russian volumes in particular sharply down year on year as a result of EU sanctions.
Revenues were down nearly a fifth in this segment as lower volumes and an easing of congestion led to shorter container dwell times at the group’s Hamburg container terminals.
Throughput at its international terminals was down by over half following the suspension of services at Odesa following the Russian incursion into Ukraine last February.
Despite the weak performance, HHLA said it would maintain its guidance for the year. “The economic development of HHLA in the first quarter of 2023 was largely in line with expectations,” it said.
But it warned that the situation in Ukraine and other geopolitical tensions, alongside rising inflation, meant the outlook was subject to “considerable uncertainty”.
“We expect to see a market recovery in the second quarter,” Titzrath said.
“Overall, HHLA’s strategy of positioning itself broadly along the logistical value chain and continuously expanding its network has proven its worth. Despite the challenging times, HHLA continues to implement its strategy based on sustainability and profitable growth.”
