Hamburger Hafen & Logistik AG, the handler of about three in four containers at Hamburg’s port, dropped the most in five years after it warned that sanctions against Russia as a result of the Ukraine crisis may cause earnings to fall this year.
HHLA, which also runs a container terminal in the Ukrainian port of Odessa, forecast today that earnings before interest and taxes this year will be 138 million euros ($190 million) to 158 million euros, falling short of the 161 million-euro median estimate of four analysts in a Bloomberg survey.
“We had expected a cautious outlook, and due to 9 percent downside to the 2014 estimates we clearly expect pressure” on the stock, Johannes Braun, a Frankfurt-based analyst at Commerzbank AG, said in a research note.
Earnings at HHLA and other logistics companies may be hurt by economic measures against Russia following its annexation of the Crimea region, as the country is Hamburg’s most important trade partner after China. The sanctions may add to negative effects of container-industry consolidation and a delay in dredging the Elbe River at the port, Chief Executive Officer Klaus-Dieter Peters said at a news conference in Hamburg.
“Achieving a result in the 2014 financial year that is on a par with that of the previous year remains an ambitious target,” HHLA said in a statement. The company proposed a dividend of 45 euro cents a share, down 31 percent from a year earlier.
HHLA shares fell as much as 12 percent, the steepest intraday drop since Nov. 20, 2008, and were down 7.7 percent at 18.04 euros at 3:34 p.m. in Frankfurt. That pared the gain this year to 1.5 percent, valuing the company at 1.31 billion euros.
HHLA had not experienced “disturbances” related to the Russian-Ukrainian dispute at its Odessa terminal in recent weeks, but risks remain, Peters said.
Even so, the conflict might have a positive outcome for the company, according to the CEO. “A positive scenario would be that the EU supports Ukraine economically, which would certainly boost exports and which would be positive for us,” he said.
Ebit declined 15 percent last year to 158 million euros, the Hamburg-based terminal operator said, confirming preliminary figures published on Feb. 6. Net income dropped 25 percent to 54.3 million euros while revenue rose 2.4 percent to 1.16 billion euros.
The company plans “to strengthen its position in the handling of mega-ships and expects container handling volumes to increase slightly,” Hamburger Hafen said.
Container volume last year rose 4.4 percent to 7.5 million standard 20-foot boxes, or TEUs, as feeder traffic to the Baltic Sea and Russia grew, countering a contraction in the northern European market. Revenue this year will rise “slightly,” the company said.
Hamburg, Europe’s second-biggest container port, is competing with other north European ports such as Rotterdam and Antwerp, Belgium, for transshipment, or transferring containers from deep-sea ships from Asia to smaller feeder vessels destined mostly for the Baltic countries and Russia.
Hamburg also seeks to handle an increasing number of big ships. That has been hampered as a dredging project to deepen and widen the Elbe connecting the port and the North Sea has been suspended because of a lawsuit by environmentalists.
“To improve our handling of large vessels, we have pro-actively created capacity and productivity reserves, particularly at our Container Terminal Burchardkai, from which we will benefit as utilization continues to increase,” Peters said in the statement.
The CEO said he expects a court decision on the Elbe dredging in the second half of the year.