EUROGATE with a sound balance sheet in 2018

At today’s Annual Press Conference, the EUROGATE Group presented its business figures for the financial year 2018. The Group generated a net profit for the year of EUR 67.3 million (2017: EUR 85.2 million). The 20.9 per cent decline in earnings compared with the previous year’s level is principally due to non-recurring effects, which had significantly contributed to the operating result in 2017. At EUR 604.0 million, revenue was only slightly below the previous year (2017: EUR 607.9 million / -0.6 per cent). In summary, the year was characterised by the impacts of the wave of consolidation that have taken place within the shipping line industry in recent years. A development which has also brought positive impact on EUROGATE. In the second half-year, for example, EUROGATE Container Terminal Hamburg reported a considerable increase in volumes, thus reversing the negative trend of the previous two years. EUROGATE Container Terminal Wilhelmshaven benefits from the increasing deployment of mega container ships with transport capacities of up to 23,000 TEUs and for the third year in sequence reported double-digit volume growth. However, the steadily increasing cost pressure from the shipping lines and the ongoing trend towards ever larger container vessels continue to present big challenges for the ports and their operators.

Michael Blach, Chairman of the EUROGATE Group Management Board: “For EUROGATE, 2018 was both an exciting and a challenging financial year, which we were ultimately able to close with an acceptable result. We chose to view the extensive changes brought about by the restructuring of the alliances as an opportunity to be harnessed as best we could. The positive trend that we saw in Hamburg from May 2018 and in Wilhelmshaven throughout the year shows that our efforts have paid off. While we can be satisfied with our earnings result for 2018, we surely cannot afford to rest on our laurels. Competitive pressure among the shipping lines will continue to increase and present us with significant challenges going forward. We must therefore further enhance our performance and competitiveness and continue to concentrate on optimising our processes. Issues such as standardisation as well as an accelerated implementation of digitalisation and automation technologies will play a key role in the future.”

At a good 5.47 million TEUs, the Bremerhaven container terminals recorded a throughput almost on a par with 2017 (–1.3 per cent, 2017: 5.54 million TEUs). In connection with the annual implementation of new schedules by the shipping line alliances in April/May 2018 there had been no significant impact on this location. The future prospects are somewhat clouded by the withdrawal of four Transatlantic services operated by THE Alliance in favour of Hamburg-Altenwerder with effect from the beginning of 2019; however, developments at NTB North Sea Terminal Bremerhaven and at MSC Gate are promising and will hopefully allow us to largely compensate for the mentioned volume losses in the medium term.

At EUROGATE Container Terminal Hamburg by contrast, handling volumes decreased slightly by 3 per cent overall to just below 1.64 million TEUs (2017: 1.69 million TEUs); however, the integration of Hamburg Süd into the Maersk Group and the successful acquisition of new customer Hyundai Merchant Marine halted the negative trend of the past two years brought about by the restructuring of the alliances. Thus, following a weak first six months with a decline of around 16 per cent, capacity utilisation at the terminal recovered significantly in the second half-year. Furthermore, since January 2019 the EUROGATE terminal has been included on the itinerary of a major Asia service operated by OCEAN Alliance, significantly improving capacity utilisation.

With an increase of 18.3 per cent in 2018, EUROGATE Container Terminal Wilhelmshaven recorded double-digit growth for the third consecutive year. In 2018, in excess of 655,000 TEUs were transhipped here for the first time. The regular port call by a Maersk West Africa service, the new role as last port of call on a Far East route operated by 2M Alliance and the full-year effect of an OCEAN Alliance Far East service acquired during the course of 2017 were key factors in the renewed increase in the total handling volume. Due to its nautical conditions and efficiency, the shipping line alliances are showing increased interest in EUROGATE Container Terminal Wilhelmshaven, particularly for deployment of their ultra large container vessels (>18,000 TEUs). Opportunities for further growth in the double-digit percentage range remain positive.

EUROGATE Intermodal

The quality of the seaport hinterland connections to the big European economic centres has a decisive influence on the competitiveness of the port locations. With EUROGATE Intermodal, the EUROGATE Group provides its own transport links to inland Europe. The EUROGATE subsidiary was able to keep the volumes of freight transported by truck and rail at the previous year’s level with 654,560 TEUs (2017: 657,969 TEUs / –0.5 per cent). A new direct link operating between the Port of Hamburg and the rail terminal in Singen (Baden-Württemberg) since January 2019 expands EUROGATE Intermodal’s network.

Including international container transports, EUROGATE increased volumes handled by the intermodal network by 2.8 per cent to 1.05 million TEUs.

EUROGATE International

Significant declines at the transhipment terminals in Italy impacted negatively on handling volumes. Cagliari in particular has been very hard hit by the transfer of scheduled services to other terminals and lost almost 50 per cent of its handling volumes. Gioia Tauro recorded a decline of 4.5 per cent, but remains at a high level (2.29 million TEUs).

Against this trend, the terminals in La Spezia (1.35 million TEUs / +0.8 per cent) and Salerno (332,000 TEUs / +5.6 per cent) developed positively.

CONTSHIP Italia Group’s intermodal business segment also developed positively. Volumes transported by rail in 2018 increased by 3.3 per cent to 311,049 TEUs (2017: 301,009 TEUs).

The other terminals in the EUROGATE Group also reported stable handling volumes year-on-year overall. The strike-related decline in volumes in Lisbon, Portugal, of around 30 per cent to 137,000 TEUs was offset by the positive development of the location in Limassol, Cyprus, with around 14 per cent growth to almost 394,000 TEUs. The delivery and commissioning of two new container gantries in the first quarter of 2019 have created the prerequisites for further growth of the Limassol terminal.

The transhipment volume in Ust-Luga, Russia, was 69,000 TEUs (2017: 74,000 TEUs / –7.1 per cent) due to sanctions.

In Tangier, Morocco, the handling volume remained at the same high level as the previous year with 1.38 million TEUs (2017: 1.38 million TEUs / –0.5 per cent). The excellent geographical location of the port directly on the Strait of Gibraltar, and thus serving the major East–West container shipping trade lanes, has prompted EUROGATE to continue investing in the location by participating in a joint venture for the construction and operation of Container Terminal 3 (TC3). TC3 is located in the enlargement area of TangerMed, to the west of EUROGATE Tanger’s present location. EUROGATE’s partners in the project are the Moroccan port operator Marsa Maroc and CONTSHIP Italia. This latest terminal in the EUROGATE network is scheduled to go into operation in mid-2020.

Outlook for 2019

The general conditions for EUROGATE are likely to remain unchanged from 2018. While in all likeliness not yet fully completed, the consolidation movements among the shipping lines are not expected to lead to any significant changes in the current financial year. The already high market concentration among the shipping line alliances and the unabated trend towards ever larger container ships continue to increase the cost and performance pressure on terminal operators. As a result, EUROGATE must and will continue to make every effort to remain competitive. Overall, the company believes it is well positioned for continued success. Numerous projects aimed at process optimisation have already been initiated in order to offer customers improved and more efficient handling operations. Here, the company will focus on increasing the level of automation in container handling operations over the medium to long term and on continuously introducing modern, digital methods that will help to further optimise the management of its various facilities.