Hamburg Stevedore Volume, Profit Plunge

HHLA, Hamburg's biggest container stevedore, reported operating profit in the first quarter plunged 45 percent as box traffic slumped 32 percent from a year ago.

Earnings before interest and tax fell to $69.4 million in the three months to March 31 from $126 million in the year-earlier period on revenue down twenty percent at $349 million.

Container traffic at HHLA's terminals in Hamburg and Odessa, Ukraine, was a third lower at 1.25 million TEUs. The intermodal division saw rail and truck traffic decline 16.6 percent to 366,439 TEUs.

HHLA said the markets that had largely contributed to its "disproportionate" growth in recent years -- the Europe-Asia deep-sea trade, feeder services in the Baltic region and hinterland traffic to Central and Eastern Europe -- are now reporting above-average downturns.

With no sign yet of economic recovery, HHLA "is … continuing to assume a pronounced double digit decline in volumes handled and transported as well as significant reductions in revenues and earnings " for the full year, Chief Executive Klaus-Dieter Peters said.

But HHLA will achieve a "clearly positive operating result," thanks to its cost cutting measures and its spread of investments, Peters said.

The port-owned company, which floated on the Frankfurt stock exchange in November, 2007, posted record operating profit of $472 million on revenue of $1.8 billion in 2008 when traffic hit an all-time high of 7.3 million TEUs.

HHLA deferred half of $1.6 billion in investments originally earmarked for 2009-2012 that would have boosted its capacity. The company said it will seek further cost cuts through short time working for its employees.

The company is reportedly under pressure from ocean carriers, led by local lines Hapag-Lloyd and Hamburg-Süd, to cut handling rates.

Contact Bruce Barnard at brucebarnard47@hotmail.com.