Home / Shipping News / International Shipping News / ZIM Reports Financial Results for the Third Quarter and the First Nine Months of 2023

ZIM Reports Financial Results for the Third Quarter and the First Nine Months of 2023

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.

Third Quarter 2023 Highlights

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.”

Financial and Operating Results for the Third Quarter Ended September 30, 2023

Total revenues were $1,273 million for the third quarter of 2023, compared to $3,228 million for the third quarter of 2022, driven by the decrease in freight rates, partially offset by a slight increase in carried volume.

ZIM carried 867 thousand TEUs in the third quarter of 2023, compared to 842 thousand TEUs in the third quarter of 2022. The average freight rate per TEU was $1,139 for the third quarter of 2023, compared to $3,353 for the third quarter of 2022.

Operating loss (EBIT) for the third quarter of 2023 was $2,276 million, compared to operating income of $1,544 million for the third quarter of 2022. The third quarter of 2023 operating loss includes a non-cash impairment loss of $2,063 million. The decrease in operating income for the third quarter of 2023 was driven primarily by the impairment loss recorded in the current quarter and the above-mentioned decrease in revenues.

Net loss for the third quarter of 2023 was $2,270 million, compared to net income of $1,166 million for the third quarter of 2022.

Adjusted EBITDA was $211 million for the third quarter of 2023, compared to $1,934 million for the third quarter of 2022. Adjusted EBIT loss was $213 million for the third quarter of 2023, compared to adjusted EBIT of $1,554 million for the third quarter of 2022. Adjusted EBITDA and Adjusted EBIT margins for the third quarter of 2023 were 17% and -17%, respectively. This compares to 60% and 48% for the third quarter of 2022, respectively.

Net cash generated from operating activities was $338 million for the third quarter of 2023, compared to $1,672 million for the third quarter of 2022.

Financial and Operating Results for the Nine Months Ended September 30, 2023

Total revenues were $3,957 million for the first nine months of 2023, compared to $10,373 million for the first nine months of 2022, driven primarily by the decrease in freight rates.

ZIM carried 2,496 thousand TEUs in the first nine months of 2023, compared to 2,557 thousand TEUs in the first nine months of 2022. The average freight rate per TEU was $1,235 for the first nine months of 2023, compared to $3,600 for the first nine months of 2022.

Operating loss (EBIT) for the first nine months of 2023 was $2,457 million, compared to operating income of $5,551 million for the first nine months of 2022. Operating loss for this period includes a non-cash impairment loss of $2,063 million recorded in the third quarter of 2023. The decrease in operating income for the first nine months of 2023 was primarily driven by the impairment loss recorded in the third quarter of 2023 and the above-mentioned decrease in revenues.

Net loss for the first nine months of 2023 was $2,541 million, compared to net income of $4,212 million for the first nine months of 2022.

Adjusted EBITDA was $859 million for the first nine months of 2023, compared to $6,568 million for the first nine months of 2022. Adjusted EBIT loss was $373 million for the first nine months of 2023, compared to adjusted EBIT of $5,561 million for the first nine months of 2022. Adjusted EBITDA and Adjusted EBIT margins for the first nine months of 2023 were 22% and -9%, respectively. This compares to 63% and 54% for the first nine months of 2022, respectively.

Net cash generated from operating activities was $858 million for the first nine months of 2023, compared to $5,041 million for the first nine months of 2022.

Liquidity, Cash Flows and Capital Allocation

ZIM’s total cash position (which includes cash and cash equivalents and investments in bank deposits and other investment instruments) decreased by $1.5 billion from $4.6 billion as of December 31, 2022 to $3.1 billion as of September 30, 2023.5 Capital expenditures totaled $14 million for the third quarter of 2023, compared to $62 million for the third quarter of 2022. Net debt position as of September 30, 2023, was $1,619 million compared to net cash position of $279 million as of December 31, 2022, a change of $1,898 million. ZIM’s net leverage ratio as of September 30, 2023 was 0.9x, compared to 0.0x as of December 31, 2022.

Use of Non-IFRS Measures in the Company’s 2023 Guidance

A reconciliation of the Company’s non-IFRS financial measures included in its full-year 2023 guidance to corresponding IFRS measures is not available on a forward-looking basis. In particular, the Company has not reconciled its Adjusted EBITDA and Adjusted EBIT because the various reconciling items between such non-IFRS financial measures and the corresponding IFRS measures cannot be determined without unreasonable effort due to the uncertainty regarding, and the potential variability of, the future costs and expenses for which the Company adjusts, the effect of which may be significant, and all of which are difficult to predict and are subject to frequent change.

Updated Full-Year 2023 Guidance

The Company revised its guidance for the full-year 2023 and now expects to generate Adjusted EBITDA of between $900 million and $1,100 million and Adjusted EBIT loss of between $600 million and $400 million. Previously, the Company expected to generate Adjusted EBITDA of between $1.2 billion and $1.6 billion and Adjusted EBIT loss of between $500 to $100 million. This guidance reflects continued weakness in freight rates and soft demand across all of the Company’s trades.
Source: ZIM

Recent Videos

Hellenic Shipping News Worldwide Online Daily Newspaper on Hellenic and International Shipping