2.2 Economic and financial situation

In a context of Spanish GDP growth of 2.5% marked by a situation that is still inflationary, although more moderate than in 2022 due to successive rises in interest rates, the activity of the Huelva Port in 2023 has been marked mainly by major advance and growth in its Public Domain management activity, reaching the record figure of 4.1 million square metres of public port space granted and authorised to a total of approximately 300 companies.

The total amount invoiced was EUR 46.23 million at the end of the year, thus decreasing by -9% compared to the amount invoiced in 2022. However, it should be clarified that this percentage is distorted due to the extraordinary land sale operation of the Aqualón shopping centre to the company IBEMETEX, which took place between April and December 2022. The exceptional amount invoiced for the disposal of this important asset amounted to 4.60 million euros, which, subtracted from the final turnover figure for that year, gives an almost negligible decrease in the amounts invoiced in 2023, of around -0.01%.

We can therefore say that the revenue figure for 2023, once the effect of the sale of Aqualón has been cancelled out, is practically identical to the amounts in the financial year 2022.

Although in the total calculation there was hardly any variation between the amounts invoiced in 2022 and those in 2023, there were significant variations in some types of income.

In particular, the Occupancy Rate from concessions had a positive evolution with respect to the previous year, which grew by 2.33% with respect to 2022 due to the major increase in concession management, thanks to which record figures have been achieved in terms of granted/licensed surface area.

The ship tax (T1) associated with vessel calls and stays in port also reported a higher income for the port than the previous year. Despite the fact that the number of vessels calling at the Huelva Port was 2.7% lower, as was the size of the vessels, which was reduced by 7.14%, the revenue per T1 grew by 5%, thus reporting a higher revenue in absolute value of more than 500,000 euros. This growth is mainly due to the increase in the dwell times of vessels at some quays such as the Petroleros or DECAL quays, as well as the long periods of anchorage in zone II of large vessels that were detected during the first half of the year.

Directly associated with the increase in the price of the F106 tariff for Environmental Management of Operations (former Dock Cleaning), this item also grew in 2023 by up to 40.6%, providing a higher income in absolute value of more than 200,000 euros. This new tariff was approved and applied to the loading and unloading of goods only during the second half of 2022 and therefore its application in the full financial year 2023 has incorporated a higher revenue for HPA.

Given that during 2023 the levels of tendering and certification of works were higher than in previous years, the amounts invoiced for “Construction Management” have also contributed to a higher income with a growth of 38% and a higher amount of up to 255,000 euros.

Finally, the income corresponding to “Legal interest on tariffs” increased in 2023, incorporating almost 245,000 euros more in the invoicing. Again, the sale to IBEMETEX of the Aqualón shopping centre, and the payment by the buyer of the total interest accrued for the multiple non-payments generated prior to this sale, have caused this figure to be so high, and its comparison with 2022 to be really insignificant.

In contrast, other revenue items showed decreases in amount compared to 2022, thus reducing the positive effect of the previous rates. This is the case of the “Activity rate” for concessions, which shows a drop of 7.74%, with a loss of more than 440,000 euros in income compared to the previous year. This decrease is due to the lower movement of goods at some of the particular facilities located in the service area at the end of the 2022 financial year. Since the activity tax is settled on the basis of the tonnes moved in the previous year, this decrease in tonnes at facilities such as the DECAL wharf (848,000 tonnes less in 2022) or the Reina Sofía wharf (326,500 tonnes less in 2022) has led to a lower income from this item.

At the end of the year, revenue from T6 “Transit zone usage fee” was equally negative, falling in absolute value by almost 46,000 euros in 2023, as did revenue from the “F101 Dock surface usage fee”.

The latter dropped by 23% when compared to 2022, resulting in a lower income of approximately -187,000 euros in absolute value. In both cases the origin of the decrease is to be found in settlements drawn for very long occupations of pipelines on the first and second quay lines at the beginning of the financial year 2022, which were subsequently cancelled in February 2023. This exceptional impact on quay occupancies resulted in high amounts invoiced during 2022 that were cancelled after one year, so this revenue comparison between years is distorted.

Dredging-related services in general also saw lower demand in 2023 and therefore the revenues they generate were also reduced when compared to 2022. Both the tariff “F119 Dredging Service”, which did not produce any income last year, and “F111 Use of dredging areas”, with a decrease of 82%, represented a loss of income for the HPA of around 276,000 euros in 2023.

Within the non-tariff revenues generated by items other than the fees and tariffs themselves, “Miscellaneous services” and “Occupations outside the service area” also fell by 53.4% and 27.4% respectively, which has led to a reduction in turnover of more than 380,000 euros. This significant drop in revenue is due, in the case of miscellaneous services, to the high amounts invoiced in 2022 corresponding to IBI arrears that were already up to date in 2023.

The decrease in “occupations outside the service area” is also due to exceptional circumstances, which is none other than the sale of the land of the Aqualón shopping centre in 2022 and therefore the definitive disappearance of the amounts paid for this item until then.

In addition to the aforementioned income, financial income includes income generated by treasury positions, although it also includes interest on arrears, deferred payments, deferrals and loans. With regard to the first item, the increase in interest rates on the markets and the liability war with financial institutions led to an average return on cash of 3.26%, with a total income of 4.33 million euros, compared to 0.18 million euros in 2022.

With regard to the budget, the net amount of turnover was -5.02% over the planned amount, with a decrease in port dues of -2.80%.

Operating expenses, including depreciation and amortisation, amounted to 45.95 million euros, compared to 42.80 million euros in 2022, representing an increase of 7.35%, due to both the 5.04% increase in personnel expenses due to salary reviews and the incorporation of new staff, 9.71% in other operating expenses, mainly due to the recovery of insolvencies that were collected in 2022 and 6.27% in depreciation and amortisation expenses due to the incorporation of new assets from the execution of the investment plan.

During 2023, the levels of bidding and work certification were higher than in previous years.

The items in other operating expenses, alongside the effect of “losses, impairment and variation of provisions for commercial operations” caused by to the recovery of a major debt from the sale of the land of the Aqualon shopping centre in 2022 mentioned above, included an increase in expenditure on repairs and conservation of 364,692.97 euros, or 6.26%, caused by emergency actions to attend to the damage caused by the storm Bernard in the service area of the port. However technical assistance expenses were significantly reduced by219,459.79 euros, and supplies and consumption by -766,663.68 euros, due to a drop in the price of electricity.

With respect to the approved budget, the personnel expenses item was -2.99% lower than planned, representing a decreased expenditure of -319,059.79 euros, while the other operating expenses item was -20.39% lower, with a lower expenditure of -4,591,079.84 euros, due to the non-execution of maintenance works such as the repair of the South wharf, the repair of the Tinto bridge joints and the absence of dredging caused by a lack of administrative authorisation.

It is important to note that the inter-port compensation fund contributed 1,382,000.00 euros, while the fund received was 286,000.00 euros, resulting in a net contribution of 1,096,000.00 euros, which is added to the operating expenses section.

Profit before tax amounted to EUR 10.15 million in 2023, compared to EUR 14.57 million in 2022. The effect of corporate income tax was positive due to the activation of deduction rights, increasing the final result for the year by 1.7 million euros, resulting in a final profit for the year of 11.93 million euros, compared to 14.38 million euros in the previous year, where no rights were recorded for non-applied deductions.

The target annual return, which excludes income and expenses that distort the result, including corporate income tax, is 2.50%, higher than the previous year, which was 2.33%, with the average asset having increased due to the incorporation of the works carried out under the Investment Plan.

In particular, the immediate cash ratio to cover current liabilities is 1.81, with a recommended range of 0.5 to 1, where available cash is sufficient to cover short-term liabilities, but no more than is necessary to avoid idle resources. This ratio was higher in 2023, as more of the available cash was held in current account due to higher remuneration, although the available cash was placed in more profitable financial products, requiring somewhat less availability, which is valued on the cash forecasts.

The usual cash ratios show that there is ample capacity to meet debts.

In 2023, when resources from operations amounted to EUR 25.00 million and the applications were reduced by the lower acquisition of long-term financial products compared to 2022, there was an increase in the Working Capital Fund of EUR 21.43 million, giving a total of EUR 135.54 million.

The ratio of operating expenses to operating income in 2023 was 88.76%. This value tends towards high values in the coming years from the need to amortise new investments, and so we refer to the fact that the EBITA will maintain similar levels throughout the years included in the Business Plan, guaranteeing financial stability.

On the other hand, the balance sheet offers a very solid picture in financial and equity terms. Fixed assets are financed entirely from equity and there is no long or short-term debt other than that deriving from the normal operation of the Entity.

On the liabilities side, equity represents 95.86% of the total, and given that the working capital is very comfortable, the entity is meeting its payment commitments without any problems. In this respect, it should be remembered that the average payment period to suppliers of 30 days established in the Law against late payment is complied with, having stood at 14.12 days in 2023.