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ZIM reports financial results for Q3 2023

ISRAEL
Tuesday, November 21, 2023, 04:30 (GMT + 9)

ZIM Integrated Shipping Services Ltd., a global container liner shipping company, announced its consolidated results for the three and nine months ended September 30, 2023.

Net loss for the third quarter was $2,270 million (compared to net income of $1,166 million in the third quarter of 2022), or a diluted loss per share of $18.904 (compared to diluted earnings per share of $9.66 in the third quarter of 2022). Net loss for the quarter was primarily driven by a non-cash impairment loss of $2,063 million

• Adjusted EBITDA for the third quarter was $211 million, a year-over-year decrease of 89%
• Operating loss (EBIT) for the third quarter was $2,276 million, compared to operating income of $1,544 million in the third quarter of 2022
• Adjusted EBIT loss for the third quarter was $213 million, compared to Adjusted EBIT of $1,554 million in the third quarter of 2022
• Revenues for the third quarter were $1,273 million, a year-over-year decrease of 61%
• Carried volume in the third quarter was 867 thousand TEUs, a slight year-over-year increase
• Average freight rate per TEU in the third quarter was $1,139, a year-over-year decrease of 66%

Net leverage ratio2 of 0.9x as of September 30, 2023, compared to 0.0x as of December 31, 2022; net debt of $1,619 million, compared to net cash of $279 million as of December 31, 2022

Eli Glickman, ZIM President & CEO, stated, "ZIM's third quarter results reflected the current operating environment, as demand remained weak and freight rates continued to deteriorate. Given our negative outlook for freight rates in the near future, we recorded a non-cash impairment loss of approximately $2.1 billion which negatively impacted our net results, as well as revised our full year guidance. We now expect to generate Adjusted EBITDA of $900 million to $1,100 million and Adjusted EBIT loss of $600 million to $400 million in 2023." 

Mr. Glickman added, "We are currently in a transition period, which we expect will extend into 2024, during which we should gradually see the benefits of the decisive actions we have taken to enhance ZIM's commercial and operational resilience. Foremost, we embarked on a fleet renewal program, which included 46 newbuild containerships of which 28 are "green" LNG vessels, and that along with the redelivery of older, more expensive and less efficient vessels, we expect will improve our cost structure and drive long-term profitable growth. Our cost per TEU is declining and we expect to further reduce our cost base, as our chartered newbuilds, including a total of 28 dual-fuel LNG containerships, are added to our fleet through 2023-2024."

Mr. Glickman further added, "We believe our ample total liquidity of approximately $3.1 billion at quarter-end will enable ZIM to maintain a long-term view while we weather prolonged market weakness. Specifically, we have initiated significant cost control measures, rationalized our capacity and adapted our network, with a focus on both maximizing our cash position and delivering an exceptional customer experience. Additionally, we entered into an important new collaboration with MSC during the third quarter that enhances operational efficiencies and further elevates service levels."

Mr. Glickman concluded, "As we look towards the future, our focus is to emerge from the current downturn in a stronger position than ever. We intend to draw on our core values, leveraging data-driven strategies and the innovative spirit of our talented employees to create enduring value for both customers and shareholders. While market challenges may continue in the near term, we expect that the combination of the initiatives we have undertaken and our solid market position will drive profitable growth over the long term."

Founded in Israel in 1945, ZIM is a global container liner shipping company with established operations in more than 90 countries serving approximately 34,000 customers in over 300 terminals worldwide.

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