Edited Transcript of HHFGn.DE earnings conference call or presentation 10-Aug-22 10:59am GMT

Q2 2022 Hamburger Hafen und Logistik AG Earnings Call Hamburg Dec 7, 2022 (Thomson StreetEvents) -- Edited Transcript of Hamburger Hafen und Logistik AG earnings conference call or presentation Wednesday, August 10, 2022 at 10:59:00am GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Angela Titzrath Hamburger Hafen und Logistik Aktiengesellschaft - Chairwoman of the Executive Board & CEO * Roland Lappin Hamburger Hafen und Logistik Aktiengesellschaft - CFO & Member of Executive Board ================================================================================ Conference Call Participants ================================================================================ * Marc Zeck Stifel, Nicolaus & Company, Incorporated, Research Division - Research Analyst * Nikolas Mauder Kepler Cheuvreux, Research Division - Junior Equity Research Analyst * Peter Hyde ================================================================================ Presentation -------------------------------------------------------------------------------- Angela Titzrath, Hamburger Hafen und Logistik Aktiengesellschaft - Chairwoman of the Executive Board & CEO [1] -------------------------------------------------------------------------------- Good afternoon, ladies and gentlemen, and a warm welcome to our conference call presenting our financial results for the first half of 2022. Before our CFO and my colleague, Roland will lead you through the financials in detail, let me comment on the market environment in which we currently operate and highlight our major achievements in the first half. For more than 2 years, we have been experiencing how volatile logistics can be. Restrictions to combat to corona pandemic, especially in China, weather-related effects, construction work on rail and on road and the war in the Ukraine with its direct and indirect implications have further aggravated the situation on global trade routes. All these events did not happen at the same time, but they have reinforced each other. Each individual challenge is manageable, but the combination amplifies the effects and makes the situation incalculable. After a good start in the first quarter, volume development was weaker in the second quarter, since our quayside capacities were limited due to highly utilized storage systems here in Hamburg. Persisting supply chain disruption led to significantly increased dwell times of import and export containers in the Port of Hamburg in the first half of 2022. Whereas in the first quarter, we had to cope mainly with long dwell times of export containers due to ongoing ship delays. The situation also got worse in the second quarter with regard to import container. We therefore implemented several measures in first -- in the first half of the year to manage the high storage utilization that was restricting our quayside handling capacity. We have rented additional space in the Port of Hamburg for container storage. And we are trying to gain additional capacity through more flexibility in our operations. At the same time, we are in close exchange with all participants in the supply chain in order to better manage exports and imports together whether by water, road or rail, it's the whole system overall. At the international container terminals, Tallinn recorded strong volume growth due to the increased use of the terminal as an alternative to Russian ports. Our Odessa terminal has been closed since Russia invaded Ukraine, on the 24th of February, but remains operational. Despite encouraging volume growth however, the terminals in Tallinn and Trieste were only able to partially offset the volume decrease at the Odessa terminal. That said, container throughput in the first 6 months was on par with the previous year at 3,368,000 TEUs. Container transport rose by 2.2% to 151,000 TEUs and in the first half year, in particular, due to growth in rail transport despite challenging weather-related and construction work related circumstance. The operating result of the Port Logistics subgroup rose in the first half of the year by 9.4% compared to the same period last year to EUR 90.7 million (sic) [EUR 91.7 million] mainly driven by further increased storage fee income and higher transport volumes. Ladies and gentlemen, let me now hand over to Roland, who will give you the financial figures in more detail. -------------------------------------------------------------------------------- Roland Lappin, Hamburger Hafen und Logistik Aktiengesellschaft - CFO & Member of Executive Board [2] -------------------------------------------------------------------------------- Yes. Thank you, Angela, and good afternoon, everyone, also from me. I would like to start with the development of the Container segment, national and international. In the first half of 2022 container throughput at all HHLA container terminals remained stable, as mentioned before, approximately 3.4 million TEU. Let us have a quick look at the breakdown to get a better understanding of different dynamics, national and international. The terminals in Hamburg -- starting with the first national development, the terminals in Hamburg achieved growth of 3.1% to 3.2 million TEU. This was mainly driven by an increase in Chinese volumes and the successful acquisition of feeder services in the third quarter 2021 and in the first quarter of the current year. On the other hand, against the backdrop of the closure of quayside container handling at the container terminal in Odessa, as Angela outlined before, international terminals recorded a significant decline. Nevertheless, our operations in Tallinn were used as a popular alternative to Russian ports, achieved strong volume growth of more than 30% in the first half. And with regard to the successful ramp-up of PLT in Italy and Trieste, volumes with regard to this operation contributed to the international development as well. All in all, as mentioned before, not capable to fully offset the stop of operations in CTO for evident reasons. Segment revenue increased strongly by 8.4% to EUR 438.8 million year-on-year. This was due to the strong increase in storage fees at our container terminals, as well as additional revenue, as mentioned before, from our new operation in Trieste. EBIT costs increased by 5% compared to the first half last year due to a higher personnel deployment needed to cope with volume growth, I outlined the 3.1% in Hamburg before and high utilization of the yard dwell time was mentioned before as well, and this affected efficiency negative on our operations in Hamburg, as well as a strong increase of cost of materials. The increase in the cost of materials resulted primarily from rising prices for electricity and fuel as well as additional expenses from increased handling volumes and higher services and consulting costs. The interest related reduction of restructuring provisions accounted for approximately EUR 7 million. EBIT costs at our terminal in Trieste also rose significantly compared to the first half of the previous year. Nevertheless, EBIT increased by 26.6% to EUR 80.2 million with a double-digit margin of more than 18% in the first half of 2022. Now let's have a look at the development of our Intermodal segment. Despite a challenging market environment, all intermodal companies recorded a slight overall increase of 2.2% in transport volumes. Again, it makes sense to have a closer look at the different developments of rail bound and road transportation. While road transport continued to decline sharply, rail transportation loss growth momentum in the second quarter but grew moderately by 4.6% year-on-year in H1. The growth was mainly driven by traffic from the North German seaports, strong Polish traffic and the German-speaking region in a whole. Traffic with the Adriatic ports remained at prior year level. Revenue increased by 11.4% to EUR 281.6 million mainly due to a higher rail share of HHLA's total intermodal transport volume, accounting for 83.3% as well as a temporary -- as temporary surcharges, which were needed to partly offset the sharp rise in energy costs. However, EBIT development was harmed by operational interruptions due to strong damage in February, construction work on German rail infrastructure as well as ongoing disruptions to international transport chain and the strong rise in energy costs, which could only be passed on to the market after some delay. Consequently, the operating result decreased by 7.1% to almost EUR 43 million in the reporting period and the EBIT margin fell by 3 percentage points to 15.2%. Let's now turn briefly to the smaller segment, the Logistics segment. In the first half of 2022, the consolidated companies reported revenue of EUR 37 million and that exceeded the prior year figure by 4.6%. Consulting activities and vehicle logistics, in particular, contributed to the positive development. However, there was an EBIT loss of EUR 6.5 million, mainly due to an impairment of around EUR 4 million in the field of new activities. At earnings -- at-equity earnings, sorry, remained positive at EUR 1.7 million. The prior year figure was burdened by impairment at an equity investment of around EUR 1 million. Coming back to the Port Logistics subgroup as a whole. Let's have a look at the cash flow development. Cash flow from operating activities decreased by approximately EUR 28 million to EUR 114.1 million as of June 30, 2022. The main driver was a higher increase in trade receivables and other assets compared to the same period last year as a lower increase in trade payables and other liabilities and the decrease in provisions, where we saw a rise in the previous year. The higher EBIT compared to the same period of the previous year had an opposite effect. Investment activities resulted in a net cash outflow of approximately EUR 42 million. The development was mainly due to higher proceeds from short-term deposits and lower payments for investments in property, plant and equipment compared to the same period last year. Free cash flow stood at EUR 72.3 million. The net -- cash outflow from financing activities was EUR 55.9 million, higher than previous year's figure at EUR 81.3 million, mainly due to the payment of increased cash dividends to shareholders. Overall, our available liquidity as of June 30 decreased to EUR 195.7 million. Let me now hand back to Angela to comment on the outlook for 2022. -------------------------------------------------------------------------------- Angela Titzrath, Hamburger Hafen und Logistik Aktiengesellschaft - Chairwoman of the Executive Board & CEO [3] -------------------------------------------------------------------------------- Yes. Thank you, Roland. Ladies and gentlemen, although we achieved good results in the first half of the year, we expect the difficult market conditions to worsen in the second half. We have, therefore, gradually lowered our forecast for container throughput and assume that volumes at the end of the year will be at the prior year level. For container transport, we still expect a moderate increase compared to the previous year. Our expectations for revenue and EBIT also remain unchanged. For revenue, a moderate year-on-year increase is expected for the Port Logistics subgroup and an EBIT of between EUR 160 million and EUR 195 million is still regarded as possible for the Port Logistics subgroup in the current financial year. At segment level, we kept our EBIT expectation for the Container segment unchanged. We still assume that the EBIT contribution of the Container segment will decrease strongly compared to last year. However, we have adjusted our expectation for the EBIT contribution of the Intermodal segment given the current challenging situation for hinterland transport. We now assume an operating result of the Intermodal segment at the prior year level. At the beginning of the year, we expected it to increase moderately. This adjustment shows that it is not only our container terminals that are stressed by disrupted transport chains but also how badly all German hinterland systems, including ours, are affected. We are doing our utmost to fulfill our supply mandate for Germany, communication and cooperation are more important than ever in these troubling times. To further increase productivity and capacity in the container intermodal segment, capital expenditure at the Port Logistics subgroup level is still expected to be in the range of EUR 270 million to EUR 320 million. However, we are still in a pandemic situation and Russia's war of aggression in Ukraine has further complicated the predictability of the economic development. No one can currently foresee what consequences the crisis will have for the economy and society, but only an innovative and sustainable logistics network like HHLA can meet the growing demands. That is why even in these challenging times, we will continue to focus on resultantly implementing our strategy geared to growth and geared towards sustainability. And with this information on our forecast and closing remarks, I would like to conclude our presentation of the interim results. And Roland and myself, we will now be happy to answer any questions if you have one. Thank you. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) First question comes from the line of Marc Zeck of Stifel. -------------------------------------------------------------------------------- Marc Zeck, Stifel, Nicolaus & Company, Incorporated, Research Division - Research Analyst [2] -------------------------------------------------------------------------------- I will ask them one by one, I guess. And the first one would be we are currently reading quite a lot about low water levels at certain German rivers, especially the Rhine. Could you tell us if you see that there's a risk to the Elbe River from the water levels and that your -- yes, the Port of Hamburg might not -- reach (inaudible), big vessels might not be able to reach the Port of Hamburg. That would be the first question. -------------------------------------------------------------------------------- Angela Titzrath, Hamburger Hafen und Logistik Aktiengesellschaft - Chairwoman of the Executive Board & CEO [3] -------------------------------------------------------------------------------- Okay. I'll take the first question. The low water levels of the Rhine actually is outlining that in particular, the close connection from the Rhine and Ruhr area to Rotterdam is at stake if you have to count on volumes. So they have already some logistic chain disruptions coming from this again. This is actually rather an opportunity than a challenge for us. That holds true as well for the Elbe River as not only we have already the digging that something actually is now asked for the Rhine as well. The digging has happened here and we will have nothing compared in terms of problems on the water level. We still have wind basically pushing water on the sea, the river up. So no, no problems from our side, regarding the water level. -------------------------------------------------------------------------------- Marc Zeck, Stifel, Nicolaus & Company, Incorporated, Research Division - Research Analyst [4] -------------------------------------------------------------------------------- Okay. That's good to hear. Second question would be on working capital or let's say, the balance sheet. I noticed that the receivables from related parties line showed quite a significant drop this quarter from roughly EUR 80 million to roughly EUR 60 million. Could you comment on what has driven this drop? And if this is expected to rebound in the next quarter? -------------------------------------------------------------------------------- Roland Lappin, Hamburger Hafen und Logistik Aktiengesellschaft - CFO & Member of Executive Board [5] -------------------------------------------------------------------------------- You're referring to the working capital. If you look at the trade receivables, so they have gone up in line with the revenue developments, i.e., in the 2 big segments. Of course, DSO remained almost stable. So it is clear if we grow on top line, this is reflected in the trade receivable development, this affects working capital accordingly. So whether it will bound or rebound, to be frank, I think in principle, it's good news. Because if revenue grows, this is reflected in increase in trade receivables. The question is whether the receivables are at risk or not. And with regard to the all-time high results posted by the big shipping lines, I'm quite reluctant regarding the outstanding payments of our clients. -------------------------------------------------------------------------------- Marc Zeck, Stifel, Nicolaus & Company, Incorporated, Research Division - Research Analyst [6] -------------------------------------------------------------------------------- I was referring to the receivables from related parties line in the balance sheet. And here I see actually a drop from roughly EUR 80 million in the second quarter -- in the first quarter, I'm sorry, to roughly EUR 60 million in the second quarter. And I was wondering where this drop in the receivables from related parties line actually came from? -------------------------------------------------------------------------------- Roland Lappin, Hamburger Hafen und Logistik Aktiengesellschaft - CFO & Member of Executive Board [7] -------------------------------------------------------------------------------- Impact with regard to group financing. And of course, [they turn] volatility because we -- we did a lot to cover the interest risk and fixed positions in different entities, and this is reflected in the alteration. -------------------------------------------------------------------------------- Marc Zeck, Stifel, Nicolaus & Company, Incorporated, Research Division - Research Analyst [8] -------------------------------------------------------------------------------- Okay. Then last question would actually be on Odessa. I understand that the terminal is still operational. And there was some news that at least grain shipments from Odessa have started again. Is this something that affects your terminal? Or do these grain shipments originate from other terminals in Odessa that are not operated by you? -------------------------------------------------------------------------------- Angela Titzrath, Hamburger Hafen und Logistik Aktiengesellschaft - Chairwoman of the Executive Board & CEO [9] -------------------------------------------------------------------------------- Well, first of all, I think that is the huge upside that we always try to underline and we are very grateful. And you can see now in the reporting of the media that the Port of Odessa has no -- highly destroyed infrastructure. The infrastructure is destroyed in the Ukraine, but not in the port and not at our terminal that many faced. The terminal Odessa will be a key in terms of building up the country after the war or even during the war. This may lead to a blow in cargo flows going forward. So far, it has left Odessa 1 vessel. It's a very, very small one. We are prepared to handle the Panamax sizes, so the big ones. We are in preparation. We can start basically any minute. But the very first one did go away from a very, very small terminal. It was like -- if I may phrase this, it was the first try out and they wanted to use a vessel, which is very small. And basically, it was not filled with grain, but it was filled with mice. So we see that this could be potentially for us a business, which you don't really see reflected yet in our numbers because it's still to come, and it's depending on the development of further opening up the water roads up -- through the Bosphorus and Trata. But if this is developed in a stable way, you can calculate 300 to 500 vessels in the size of Panamax, which will be needed to get the grain out of the Ukraine. And obviously, Odessa would be then of essential interest and would play a significant role. But the first one was a test and did not go from our but from the very small case in the harbor. -------------------------------------------------------------------------------- Marc Zeck, Stifel, Nicolaus & Company, Incorporated, Research Division - Research Analyst [10] -------------------------------------------------------------------------------- Last question would be on the downgrade on the container throughput volume for the port. When you laid out the EUR 400 million EBIT scenario for 2025, you said that you expect pre-pandemic volumes by 2023. I guess this might be quite hard to achieve. Would you then consider revising or, let's say, adjusting those 2025 EUR 400 million EBIT scenario? Or is it still a valid assumption? -------------------------------------------------------------------------------- Roland Lappin, Hamburger Hafen und Logistik Aktiengesellschaft - CFO & Member of Executive Board [11] -------------------------------------------------------------------------------- First of all, if you look in the results posted so far, we have caught up with a level of pre-pandemic. As I outlined, the positive development still in Hamburg plus 3.1% against the market environment that is declining and Angela outlined that we gained market share in this development. So it's just for your orientation where we are. The other thing is how does it fit to ambition for 2025 compared to where we are apparently. And if we guide you on segmental level, to end up at previous year's level, we factor in, and this is why I outlined [incremental a bit] on the breakdown of the 2 opposing effects. Of course, so far, Odessa is at risk. On the other hand, there's a potential that was outlined before. And Angela commented on that. But it's difficult to properly forecast. But on segmental level, the figures are impacted and depend on a normalization recovery, i.e. But with regard to our cost efficiency program, this has to do with national development in the Port of Hamburg, mainly. And the starting point is not flattish, [it is] plus 3.1%, I repeat it, according to the development in the first 6 months. And now coming back to what is our view on the bridge to the ambition, I think it's too early to comment on 2023. But with regard to the guidance for -- on segmental level, you have to factor in the international development, and we clearly stated that, of course, the positive development in Tallinn partly offset the decline of volumes as a consequence of the invasion so far, but is not appropriate to offset it in full. So this means the other way around, we are not in negative territory in Germany. And this gives you a little bit orientation of whether it is achievable still, if we progress with the efficiency program to meet our targets and ambition midterm. But with the clear indication that the number of impacts that need to be factored in might this way or the other led us to an update, but it's not the issue for today. We will come back to this if we are through with the planning -- internal planning procedure this year. -------------------------------------------------------------------------------- Angela Titzrath, Hamburger Hafen und Logistik Aktiengesellschaft - Chairwoman of the Executive Board & CEO [12] -------------------------------------------------------------------------------- Let me just add because I think it's important to always compare to developments in the north range. If you factor in the Port of Rotterdam has lost in the first 6 months compared to 2021, same 6 months minus 4.4%, Port of Hamburg minus 6.2% compared to the same period the year before. So basically -- I mean, we feel that under the very, very difficult circumstances and under the unpredictability, not only of the pandemic situation, but basically, the war and the subvention situation, we feel the company is very stable. -------------------------------------------------------------------------------- Operator [13] -------------------------------------------------------------------------------- The next question comes from the line of Nikolas Mauder from Kepler Cheuvreux. -------------------------------------------------------------------------------- Nikolas Mauder, Kepler Cheuvreux, Research Division - Junior Equity Research Analyst [14] -------------------------------------------------------------------------------- I have 4 questions, and I'll also go one by one. The first one is, I guess, the backdrop of the collective labor negotiations. Can you remind us what kind of wage inflation is baked into your EBIT guidance? -------------------------------------------------------------------------------- Roland Lappin, Hamburger Hafen und Logistik Aktiengesellschaft - CFO & Member of Executive Board [15] -------------------------------------------------------------------------------- As we have the situation where negotiations continue, I would answer in a qualitative way and not disclose the details. But take for granted that on management level, we try to assess a potential outcome and factor it in the range that we just confirmed to the market. -------------------------------------------------------------------------------- Nikolas Mauder, Kepler Cheuvreux, Research Division - Junior Equity Research Analyst [16] -------------------------------------------------------------------------------- Okay. Fully understood. Second question would be what share of container EBIT is attributable to storage fees at the moment? And what part of this would you expect to vanish in normalized, whatever situation? -------------------------------------------------------------------------------- Angela Titzrath, Hamburger Hafen und Logistik Aktiengesellschaft - Chairwoman of the Executive Board & CEO [17] -------------------------------------------------------------------------------- I would challenge you with the world of normalized. If I look back in the past 5 years, every single year, I could not say which year would be a normal one or a normalized one. And I think that it's important as well to understand that in the volatile circumstances that we are facing since 3 years basically now, that volatility and managing volatility, that means as well to have different levels of inventory will be maybe possibly in the future the new normal. -------------------------------------------------------------------------------- Nikolas Mauder, Kepler Cheuvreux, Research Division - Junior Equity Research Analyst [18] -------------------------------------------------------------------------------- Fair enough. Third question would then be, you called the Port of Tallinn, a popular alternative to Russian ports. I'm struggling a bit with understanding how that squares with sanctions that we have on trade with Russia, what amount of TEU is still attributable to Russia in the second quarter? And why is it a popular alternative? What does that mean? -------------------------------------------------------------------------------- Angela Titzrath, Hamburger Hafen und Logistik Aktiengesellschaft - Chairwoman of the Executive Board & CEO [19] -------------------------------------------------------------------------------- Well, the first part is, if you don't want to go to Tallinn -- to Russia and you have trade and containers with you, then you leave it at the port closest to Russia. -------------------------------------------------------------------------------- Nikolas Mauder, Kepler Cheuvreux, Research Division - Junior Equity Research Analyst [20] -------------------------------------------------------------------------------- Okay. So -- yes. -------------------------------------------------------------------------------- Roland Lappin, Hamburger Hafen und Logistik Aktiengesellschaft - CFO & Member of Executive Board [21] -------------------------------------------------------------------------------- Yes. (inaudible) a bit more what we mean is, don't forget, this is the last European port adjacent to the Russian border, where if you are forced to stop cargo that is banned due to the sanctions, you try to buffer it in Tallinn. -------------------------------------------------------------------------------- Angela Titzrath, Hamburger Hafen und Logistik Aktiengesellschaft - Chairwoman of the Executive Board & CEO [22] -------------------------------------------------------------------------------- The closest port to Russia. -------------------------------------------------------------------------------- Roland Lappin, Hamburger Hafen und Logistik Aktiengesellschaft - CFO & Member of Executive Board [23] -------------------------------------------------------------------------------- So yes. And then it's the question. But we offer the services to the market and the services are highly welcome. And as we outlined, container volume has gone up by more than 30%. And this is one of the reasons. Of course you can use this port and you are in full compliance with the sanctions. On the other hand, you need space and thermal capacity adjacent to the -- but not allow to use and continue your trade flows by using Russian ports. And this is where we benefit to a certain extent and where we are happy to offer services to the market that help them to fix the problem. -------------------------------------------------------------------------------- Nikolas Mauder, Kepler Cheuvreux, Research Division - Junior Equity Research Analyst [24] -------------------------------------------------------------------------------- Okay. So what I understand is that you have -- like you get storage fees there. And like the owners of that cargo will eventually have to decide whether they leave it with you and continue to pay or whether they collect it and bring it back to where it came from? -------------------------------------------------------------------------------- Angela Titzrath, Hamburger Hafen und Logistik Aktiengesellschaft - Chairwoman of the Executive Board & CEO [25] -------------------------------------------------------------------------------- It's -- I offer you a different view on this. You need to understand that the cargo flow is changing as well. You have, in addition to this steel and wood and everything else, which would might come from Russia is now coming from different areas, in particular, the Baltic areas. And you have obviously as well a small -- a portion of containers, container storage, which gets redirected, maybe inside of the container goods, which is supposed to go to Russia, but no longer going to Russia, it is now going to be sold to other customers and get redirected and so on. So you have a total change in the trade flows where Tallinn plays a significant role of basically circulating, as Russia is no longer a market to go to. -------------------------------------------------------------------------------- Nikolas Mauder, Kepler Cheuvreux, Research Division - Junior Equity Research Analyst [26] -------------------------------------------------------------------------------- Okay. Then final question from my side is, can you tell us what activity was impaired in the Logistics segment. As I remember, you presented a couple of (inaudible) we might be able to remember which one. -------------------------------------------------------------------------------- Angela Titzrath, Hamburger Hafen und Logistik Aktiengesellschaft - Chairwoman of the Executive Board & CEO [27] -------------------------------------------------------------------------------- It was the additive manufacturing activity that we have established under the name of Bionic. -------------------------------------------------------------------------------- Nikolas Mauder, Kepler Cheuvreux, Research Division - Junior Equity Research Analyst [28] -------------------------------------------------------------------------------- Okay. And any detail what triggered the impairment? -------------------------------------------------------------------------------- Angela Titzrath, Hamburger Hafen und Logistik Aktiengesellschaft - Chairwoman of the Executive Board & CEO [29] -------------------------------------------------------------------------------- Well, you have a very difficult market environment, additive manufacturing is still to be developed. And if you have a market which is very difficult for innovative goods, the first thing in terms of a difficult environment, pandemic and war environment was that the market was not receptive. And therefore, we have taken the cautious conservative way on evaluating this business. We still believe it's a strategic -- good idea to develop it, but we do it very cautiously. -------------------------------------------------------------------------------- Operator [30] -------------------------------------------------------------------------------- Next question comes from the line of Peter Hyde from Atlas. -------------------------------------------------------------------------------- Peter Hyde, [31] -------------------------------------------------------------------------------- Really, I wanted to focus on the intermodal business. And I've got 2 or 3 sort of related questions. The first one, could you explain in a bit more detail the reason for the EBIT decline and what you might think might be recovered. Because you're talking about increases in energy charges, which have been passed through as a surcharge on revenue, but there's a lag in the system, so you haven't fully recovered these. Obviously, I'm sort of referring to Slide 5. So perhaps you could just give us a bit more indication of whether you're actually going to recover those energy charges in, let's say, the second half of the year. And then secondly, again, on intermodal, I was quite keen to have a quick understanding of why rail transport was up 4.6% in compared to, let's say, volume throughput at Hamburg only up 3%. Does that mean you're taking that amount of market share at Hamburg? And then finally, I suppose on intermodal. Do you think there will be long-term consequences of the Russian-Ukraine situation on your ability to develop an intermodal rail network? Or how do you think it might go to your view on how you develop that intermodal rail network? -------------------------------------------------------------------------------- Angela Titzrath, Hamburger Hafen und Logistik Aktiengesellschaft - Chairwoman of the Executive Board & CEO [32] -------------------------------------------------------------------------------- Okay. We -- I start. We just try one on one. We didn't have a very good line. So we just start to see whether we have understood your questions in the right way. So I'll start with your last one with regard to the development, strategically on the intermodal side, whether the Ukraine and Russia conflict is opposing or would be a stumble stone. Definitely, we would not see this as a hindering point. Actually, as you can see this year in the first half year in terms of volumes, we did grow significantly. And this is basically based on the continuation of our very consequent investment and development strategy. We invest in people. We are basically developing people. I mean, the scarcity of labor force in specialized areas like locomotive and others, we do it ourselves. We develop further in the rolling stock. We are developing further in relationships in -- the last acquisition that we just made in Poland, beginning -- until the end of last year. So we are consequently developing further our intermodal business, and we don't see any [upcycle] coming now from the war. Even we see that the silk road development is continuing. And if I may recall, even now the good relationship that we have built up the partnership with the Ukranian railway system is allowing us to have a land bridge built, which is still working and basically fueling that you get still goods in and out of the Ukraine. In terms of the -- your question with regard to the energy surcharges, we are able to increase our prices and give those surcharges to the market successfully, and that's why we have given as well the outlook as it is. You had a third question? -------------------------------------------------------------------------------- Roland Lappin, Hamburger Hafen und Logistik Aktiengesellschaft - CFO & Member of Executive Board [33] -------------------------------------------------------------------------------- Yes, I would give you the answer. And surely repeat whether I got the point. You mentioned 4.6% that I outlined was the dynamic year-on-year with regard to volumes handled in our intermodal rail bond systems. And you asked the question, if you compare it to the 3.1% in Hamburg, what the explanation might be, was that your point? -------------------------------------------------------------------------------- Peter Hyde, [34] -------------------------------------------------------------------------------- (technical difficulty). -------------------------------------------------------------------------------- Angela Titzrath, Hamburger Hafen und Logistik Aktiengesellschaft - Chairwoman of the Executive Board & CEO [35] -------------------------------------------------------------------------------- We have lost the market share, I think you wanted to.. -------------------------------------------------------------------------------- Roland Lappin, Hamburger Hafen und Logistik Aktiengesellschaft - CFO & Member of Executive Board [36] -------------------------------------------------------------------------------- Okay. So of course, we gained market share. It is a little bit complicated because -- they have not -- all figures been released so far to the market. But if I would, as a best guess at max, expect the development at the German coastline, flattish. And on the other hand, as Angela shared Benelux is declining. It is clear with growth of 4.6%. This way or the other, we must have gained market share. And with regard to the high increase of gasoline prices, it -- we might have affected the modal split as well with regard to truck and rail bond business, but there are no statistics on hand so far, but in any case, positive last 4.6%. -------------------------------------------------------------------------------- Operator [37] -------------------------------------------------------------------------------- (Operator Instructions) There are no more questions at this time. I hand back to Angela to -- for closing comments. -------------------------------------------------------------------------------- Angela Titzrath, Hamburger Hafen und Logistik Aktiengesellschaft - Chairwoman of the Executive Board & CEO [38] -------------------------------------------------------------------------------- Thank you very much. And ladies and gentlemen, thank you very much for your interest and your ongoing support for HHLA. Although we are living in difficult and really unsettling times, we will continue to decisively and consistently take advantage of the opportunities provided by the digital transformation and the drive towards climate neutrality in order to lead HHLA into a sustainable and economically successful future. Please stay healthy and take care. Goodbye.