Why Is ZIM Integrated Shipping Stock Falling Today?

ZIM Integrated Shipping Services Ltd ZIM shares are trading lower after it reported a first-quarter FY24 sales increase of 14% Y/Y to $1.56 billion, missing the consensus of $1.57 billion.

The Haifa, Israel-based company generated an EPS of $0.75, vs a loss of $0.50 last year and missing the consensus of $1.69.

Carried volume in the quarter was 846 thousand TEUs, up 10% Y/Y. The average freight rate per TEU was $1,452 (+4% Y/Y).

Adjusted EBITDA rose 14% Y/Y to $427 million, with margins of 27% same as the prior year quarter.  

ZIM’s total cash position decreased by $442 million from $2.69 billion as of December 2023-end to $2.25 billion as of March-end.

Operating cash flow for the quarter was $326 million, compared to $174 million a year ago. 

ZIM’s net leverage ratio was 2.8x as of March-end, compared to 2.2x as of December 31, 2023. Capital expenditures were $24 million during the quarter versus $36 million a year ago.

Dividend: The Board of Directors declared a cash dividend per share of $0.23, payable on June 11 to shareholders of record as of June 4.

Eli Glickman, ZIM President & CEO, said, “Looking ahead, we now expect freight rates to remain stronger for longer than initially anticipated due to a combination of continued pressure on supply and availability of equipment and a recent uptick in demand.” 

“While the rate environment during the latter part of 2024 remains unknown, we are confident in ZIM’s strategic positioning as an agile container shipping player with a competitive cost- and fuel-efficient, modern fleet.”

“By year’s end, we expect the delivery of the final 16 out of 46 newbuild containerships that we secured, which include 28 LNG-powered vessels.”

2024 Outlook: ZIM raised the adjusted EBITDA outlook to $1.15 billion-$1.55 billion (from $850 million-$1.450 billion) and adjusted EBIT to zero-$400 million (from a loss of $300 million-profit of $300 million).

Price Action: ZIM shares are down 3.75% at $18.46 at the last check Tuesday.