Israeli Company ZIM Integrated Shipping Posts Huge Q3 Loss, Slashes FY23 Outlook Again

ZIM Integrated Shipping Services Ltd ZIM reported a Q3 FY23 sales decline of 61% Y/Y to $1.27 billion, missing the consensus of $1.32 billion.

The Haifa, Israel-based company generated an EPS loss of $(18.90), vs. an EPS of $9.66 a year ago. Adjusted EPS loss of $(1.71) missed the consensus of $(1.30).

Carried volume in Q3 was 867 thousand TEUs, vs. 842 thousand TEUs a year ago. The average freight rate per TEU was $1,139 (-66% Y/Y).

Adjusted EBITDA fell 89% Y/Y to $211 million, with margins of 17% vs 60% a year ago.  

ZIM's total cash position stood at $3.1 billion as of September 30, 2023. Operating cash flow was $858 million at the end of Q3, compared to $5.04 billion a year ago.

Capital expenditures came in at $14 million in Q3 FY23 vs $62 million in Q3 FY22.

Eli Glickman President & CEO said, "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."

"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."

FY23 Outlook: ZIM lowered its adjusted EBITDA outlook to $900 million-$1.10 billion from $1.2 billion- $1.6 billion.

The company also revised its adjusted EBIT loss guidance to $(400) million-$(600) million from a loss of $(500) million-$(100) million.

Price Action: ZIM shares are trading lower by 9.94% at $7.03 on the last check Wednesday.