14. Leases

BLG as lessee

Leases

Leases maintained by BLG LOGISTICS primarily cover land, buildings and wharfs. They relate mainly to heritable building rights in the ports of Bremen and Bremerhaven and have remaining terms of up to 24 years. With this, the Group secures long-term rights of use to the land required for operations. Beyond this, there are mainly leases for industrial trucks, conveyor systems, HGVs, trucks, passenger cars and tractor units, which have mostly terms between three and ten years.

A number of property leases contain renewal or termination options. All facts and circumstances that offer an economic incentive to exercise renewal options or not to exercise termination options are taken into account when determining the term of leases. Changes in the term of a lease as a result of exercising or not exercising options are taken into account only when they are deemed reasonably certain. As renewal or termination options are often agreed in line with corresponding clauses in contracts with customers, the exercise of these options is reviewed in parallel with the contract negotiations with customers. At the same time, potential future cash outflows that are not currently recognized under lease liabilities are offset by a similar amount of potential future cash inflows from contracts with customers. The amended lease payments are to be discounted at the interest rate applicable on the date of the lease modification.

In addition, the heritable building right contracts in particular provide for an adjustment of the ground rent on the basis of the consumer price index every five years. The lease payments are stated at the index level applicable on the respective measurement date. These are index-based variable payments, which are accounted for from the date the adjustment of the lease payments takes effect and under application of an unchanged discount rate. The next adjustment is planned for the 2025 financial year.

Recognition and measurement

In its role as a lessee, BLG LOGISTICS recognizes assets for the right to use leased assets and liabilities for the payment obligations entered into. They are recognized at the date from which the underlying asset is available for the Group’s use.

IFRS 16 is not applied to leases for intangible assets. BLG LOGISTICS exercises the option to participation in short-term leases and leases of low-value assets and recognizes payments for these leases on a straight-line basis as expenses in the statement of profit or loss. For contracts that contain other components beyond lease components, the corresponding components are not separated.

The right-of-use assets are measured at cost, comprising the present value of the outstanding lease payments and lease payments made to the lessor on or before commencement of the lease, less lease incentives received, initial direct costs and, if applicable, the estimated costs required to dismantle the underlying assets.

The right-of-use assets are then depreciated over the shorter of the term of the lease and the useful life in line with the rules for similar own assets and, if necessary, impaired (see also note 12 under “Impairment”).

These assets are grouped with acquired assets for reporting purposes, taking into account the asset class.

Lease liabilities are measured at the present value of the outstanding lease payments. They are discounted on the basis of the interest rate inherent to the lease, if that rate can be determined. Alternatively, they are discounted at the incremental borrowing rate.

Lease payments include fixed lease payments, less lease incentives to be received from the lessor, variable lease payments linked to an index or interest rate, expected payments resulting from residual value guarantees, the exercise price of a purchase option if its exercise is reasonably certain, and penalties payable if termination options are exercised, if their exercise is reasonably certain.

Following initial recognition, lease liabilities are measured at amort ized cost according to the effective interest method. Interest cost is therefore calculated for lease liabilities on the basis of an amount resulting in a constant periodic discount rate for the remaining liabilities. This corresponds to the discount rate determined on the commencement date of the lease, unless a reassessment requires a change in the discount rate. This applies if changes in the estimate regarding the exercise or non-exercise of purchase, renewal or termination options arise, or changes to the scope, amount of contractual payments or the term of the lease are agreed. Remeasurements calculated on the basis of an unchanged discount rate must take place in the event of changes in variable payments linked to an index or interest rate or changes in the estimate of the payments expected to be made under residual value guarantees. Amounts from a remeasurement of the lease liability are recognized in parallel with an adjustment to the right-of-use asset. If the value of the right to use the leased asset falls to zero, the remaining adjustment amount is to be recognized in the statement of profit or loss. Lease payments made less the interest expenses included therein reduce the carrying amount of the lease liabilities.

Right-of-use assets

The following table shows the separate carrying amounts for rights to use leased assets that were included in property, plant and equipment.

The additions to right-of-use assets in the 2024 financial year amounted to EUR 39,556 thousand (previous year: EUR 43,308 thousand).

The corresponding lease liabilities are recognized under financial liabilities. Please refer to note 24.

Statement of profit or loss

The following amounts have been recognized in the statement of profit or loss in connection with leases where BLG LOGISTICS is the lessee.

Total payments for leases in the financial year came to EUR 89,320 thousand (previous year: EUR 92,485 thousand).

BLG as lessor

Leases

The Group maintains subleases for land, buildings, wharfs and operating equipment. The terms of these subleases generally correspond to those of the head leases. In certain cases, BLG LOGISTICS is also a lessor under customer contracts.

The subleases mainly relate to the rights and obligations transferred under usage transfer agreements arising from the heritable building rights granted by the Free Hanseatic City of Bremen (municipality) for land required for the business of the EUROGATE Group. Further information can be found in note 15 under “Joint ventures”.

Recognition and measurement

As a lessor, BLG LOGISTICS classifies leases upon commencement as operating leases or finance leases.

If the lease transfers all the risks and rewards of ownership, the lease is classified as a finance lease. If this is not the case, the lease is an operating lease.

As an intermediate lessor, the Group recognizes the head lease and the sublease separately. If the head lease is a short-term lease for which the recognition option is exercised, the sublease must be classified as an operating lease. In all other cases, the sublease is classified on the basis of the right-of-use asset from the head lease in place of the underlying asset.

In the case of operating leases, the lease payments received are recognized through profit or loss in revenue or other operating income, depending on the items to which they relate.

In the case of finance leases, the leased asset or right-of-use asset from the head lease is derecognized and a lease receivable is recognized in the amount of the net investment in the lease. Interest income is recognized over the term of the leases in the amount that results in a constant periodic rate of return on the remaining lease receivables. Following initial recognition, lease receivables are reduced by the lease payments received less the interest income included therein. An allowance account for lease receivables is recognized in profit or loss on the basis of expected credit losses according to the general approach. Please also refer to note 16.

Lease receivables

The undiscounted future lease payments from finance leases are presented in the table below according to due date and reconciled with the recognized lease receivables.

Statement of profit or loss

The following amounts have been recognized in the statement of profit or loss in connection with leases where BLG LOGISTICS is the lessor.

The table below shows the undiscounted future lease payments from operating leases according to due date.