ZIM Integrated Shipping Misses Q2 Earnings Estimates, Cites 'Current Market Realities'

ZIM Integrated Shipping Services Ltd ZIM reported a sales decline of 62% Y/Y to $1.31 billion, missing the consensus of $1.35 billion for the second quarter (Q2).

The Haifa, Israel-based company generated an EPS loss of $(1.79), vs. consensus of $(0.88). 

Carried volume in Q2 was 860 thousand TEUs, vs. 856 thousand TEUs a year ago. The average freight rate per TEU was $1,193 (-67% Y/Y).

Adjusted EBITDA fell 87% Y/Y to $275 million, with margins of 21% vs 61% a year ago.  

ZIM's total cash position stood at $3.2 billion as of June 30.

Operating cash flow was $520 million at the end of Q2, compared to $3.37 billion a year ago.

Capital expenditures came in at $26 million in Q2 2023 vs $82 million in Q2 2022.

"We continue to take proactive steps to respond to current market realities, with a focus on minimizing costs while optimizing our commercial strategy," said ZIM chief Eli Glickman.

"We have taken action to rationalize our existing capacity and routinely review our services to adapt our network to customer preferences and identify new commercial opportunities," he added. "We also explore opportunities to leverage operational collaborations to improve efficiencies."

By 2024, the company expects the cost structure to improve in tandem with the delivery of its 28 "LNG-powered vessels."

FY23 Outlook: As announced on July 12, ZIM lowered its adjusted EBITDA outlook to $1.2 billion to $1.6 billion from $1.8 billion - $2.2 billion.

It also slashed its adjusted EBIT guidance from $100 million - $500 million to a loss of $(500) million - $(100) million.

Price Action: ZIM shares are trading lower by 5.51% at $12.70 premarket on the last check Wednesday.

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