HHLA, the port of Hamburg’s largest container handler, warned the crisis in Ukraine threatens to slow its important Russian feeder traffic and impact this year’s financial performance.
The company said an 8.3 percent rise in Baltic Sea feeder traffic to neighboring East and Central European countries was the main driver of a 4.4 percent increase in total volume in 2013 to 7.5 million TEUs. The rise gave its Hamburg terminals an increased 20.4 percent share of shipments in the north European port range.
The Russian economy was already slowing — growing just 1.3 percent in 2013 — before Moscow’s annexation of Crimea triggered a massive capital outflow, expected to hit $100 billion this year, and threatened U.S. and EU trade sanctions.
With the World Bank forecasting Russia could tip into recession this year even without Western trade sanctions, the slowdown in container imports likely will accelerate through 2014.
HHLA said it was already facing a difficult market environment because of delays in dredging the river Elbe, Hamburg’s access to the open sea, and consolidation in the liner shipping industry that “will lead to increasingly volatile volumes.”
“The situation is made more complicated by the uncertainty surrounding events in Ukraine and potential negative impacts on trade with Russia,” said Klaus-Dieter Peters, chairman of HHLA’s executive board.
“In view of this, achieving a result in the 2014 financial year that is on par with that of the previous year remains an ambitious target,” he said at the presentation of HHLA’s 2013 financial results.
HHLA’s operating profit declined 15 percent in 2013 from the previous year to €158 million ($216.5 million) on a 2.4 percent increase in revenue to €1.15 billion ($1.56 billion). Pre-tax profit slumped nearly 25 percent to €54 million ($74 million).
The core Port Logistics unit, which is listed on the Frankfurt stock exchange, saw earnings before interest and tax shrink 16.5 percent to €144.3 million as revenue grew 2.4 percent to €1.13 billion.
HHLA’s share price fell 12 percent yesterday, to the lowest level since November 2008, following the company’s financial presentation.
HHLA operates three terminals in Hamburg, Europe’s second largest container port after Rotterdam, and one in Odessa, Ukraine.
Contact Bruce Barnard at email@example.com.