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Shipping

ZIM Q3 net income drops 20% on lower volume

Average freight rate was up 3% to $3,353/TEU, carried volume declined to 842,000 TEUs, down 5%

ZIM Q3 net income drops 20% on lower volume
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NYSE-listed Israeli carrier ZIM reported a 20 percent decline in net income at $1.2 billion for Q32022 compared to $1.5 billion in Q32021 on lower volume.

While average freight rate was up 3 percent to $3,353/TEU, carried volume declined to 842,000 TEUs, down 5 percent, according to an official release.

Revenue was up 3 percent at $3.2 billion and EBITDA margin dropped to 60 percent from 66 percent in Q32021.

Eli Glickman, President & CEO, ZIM

"Our third quarter and nine-month 2022 results reflect outstanding execution and elevated profitability," says Eli Glickman, President & CEO, ZIM. "While market conditions remained volatile, we delivered strong EBITDA and EBIT margins and generated net income of $1.17 billion in the third quarter. Given our significant cash generation, and consistent with our prioritisation of returning capital to shareholders, we have declared this year over $1.26 billion, or $10.55 per share, in dividends on account of 2022 results including a Q3 dividend of approximately $354 million, or $2.95 per share.

"Driven by macroeconomic and geopolitical uncertainties, the near-term outlook for container shipping has shifted and the normalisation in freight rates has begun. Based on our current market expectations, we now forecast 2022 adjusted EBITDA of between $7.4 billion to $7.7 billion and adjusted EBIT of between $6 billion to $6.3 billion."

ZIM had earlier expected to generate adjusted EBITDA of between $7.8 billion and $8.2 billion and adjusted EBIT of between $6.3 billion and $6.7 billion in 2022.

In August 2022, ZIM had announced the signing of a ten-year LNG purchase agreement with Shell NA LNG, LLC to supply ten LNG-fueled vessels that will be deployed on ZIM's flagship ZIM Container Service Pacific (ZCP) on the Asia to USEC trade. "These ten 15,000 TEU vessels are expected to enter into service during 2023-2024 and will be transporting goods from China and South Korea to the U.S. East Coast and the Caribbean."

9-month revenue up 42%
Revenue for nine months of 2022 increased 42 percent to $10.4 billion compared to $7.3 billion for the first nine months of 2021, primarily driven by elevated freight rates.

ZIM carried 2.5 million TEUs in the first nine months of 2022 compared to 2.6 million TEUs in the first nine months of 2021. The average freight rate per TEU was $3,600 compared to $2,510 for the first nine months of 2021, an increase of 43 percent.

Net income for the first nine months was up 45 percent at $4.21 billion compared to $2.9 billion for the first nine months of 2021.

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