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ZIM Reports Financial Results for the Fourth Quarter and the Full Year of 2023

ZIM Integrated Shipping Services Ltd. (NYSE: ZIM), a global container liner shipping company, announced today its consolidated results for the three and twelve months ended December 31, 2023.

Fourth Quarter and Full Year 2023 Highlights

Net loss for the fourth quarter was $147 million (compared to a net profit of $417 million in the fourth quarter of 2022), or a diluted loss per share of $1.234 (compared to diluted earnings per share of $3.44 in the fourth quarter of 2022); net loss for the full year, including a $2.06 billion non-cash impairment loss, was $2.69 billion1 (compared to a net profit of $4.63 billion for the full year of 2022).

Adjusted EBITDA for the fourth quarter was $190 million, a year-over-year decrease of 80%; Adjusted EBITDA for the full year was $1.05 billion, a year-over-year decrease of 86%.

Operating loss (EBIT) for the fourth quarter was $54 million, compared to operating income of $585 million in the fourth quarter of 2022. Operating loss for the full year of 2023 was $2.51 billion (driven by a non-cash impairment loss of $2.06 billion recorded in the third quarter), compared to operating income of $6.14 billion for the full year of 2022.
Adjusted EBIT loss for the fourth quarter was $49 million, compared to Adjusted EBIT of $585 million in the fourth quarter of 2022. Adjusted EBIT loss for the full year of 2023 was $422 million, compared to Adjusted EBIT of $6.15 billion for the full year of 2022.

Revenues for the fourth quarter were $1.21 billion, a year-over-year decrease of 45%; revenues for the full year were $5.16 billion, a year-over-year decrease of 59%.

Carried volume in the fourth quarter was 786 thousand TEUs, a year-over-year decrease of 4.6%; carried volume in the full year was 3,281 thousand TEUs, a year-over-year decrease of 2.9%.

Average freight rate per TEU in the fourth quarter was $1,102, a year-over-year decrease of 48%; average freight rate per TEU in the full year was $1,203, a year-over-year decrease of 63%.

Net leverage ratio2 of 2.2x at December 31, 2023, compared to 0.0x as of December 31, 2022; net debt2 of $2.3 billion, compared to net cash of $279 million as of December 31, 2022.

Eli Glickman, ZIM President & CEO, stated, “Against a backdrop of weakened market conditions, industry disruptions and operational challenges in 2023, ZIM’s exceptional team of professionals remained resilient and intently focused on achieving operational excellence and delivering the highest level of care for our valued customers. At the same time, we made significant progress advancing our strategic transformation and are pleased to have already started to realize the favorable outcomes we projected. Specifically, we are well on our way to markedly improving our cost structure, enhancing our commercial resilience, and enabling reduced carbon emissions for both ZIM and our customers moving forward.”

Mr. Glickman added, “Our fleet renewal program, which includes 46 newbuild containerships, focuses on shifting ZIM’s reliance on older, less fuel-efficient vessels to a cost and fuel-efficient, more sustainable and largely LNG-powered newbuild fleet, and is progressing as planned following the delivery of 24 new vessels to date. Our cost per TEU is declining and we anticipate additional improvements as our 22 outstanding newbuilds are delivered during the remainder of the year. We continue to review our services to best address customers’ evolving needs and position ZIM to capitalize on attractive growth opportunities.”

Mr. Glickman concluded, “During a time when the market remains volatile, our strong cash position will enable us to continue to maintain a long-term view as we focus on generating sustainable value for both customers and shareholders. Looking ahead, we intend to continue to take decisive steps to further benefit from our strategic transformation and expect ZIM to emerge in a stronger position than ever in 2025 and beyond.”

Financial and Operating Results for the Fourth Quarter Ended December 31, 2023

Total revenues were $1,205 million for the fourth quarter of 2023, compared to $2,189 million for the fourth quarter of 2022, mainly driven by the decrease in freight rates.

ZIM carried 786 thousand TEUs in the fourth quarter of 2023, compared to 823 thousand TEUs in the fourth quarter of 2022. The average freight rate per TEU was $1,102 for the fourth quarter of 2023, compared to $2,122 for the fourth quarter of 2022.

Operating loss (EBIT) for the fourth quarter of 2023 was $54 million, compared to operating income of $585 million for the fourth quarter of 2022. The decrease was driven primarily by the above-mentioned decrease in revenues, partially offset by lower operating expenses.

Net loss for the fourth quarter of 2023 was $147 million, compared to net income of $417 million for the fourth quarter of 2022, driven primarily by the reduction in operating income.

Adjusted EBITDA for the fourth quarter of 2023 was $190 million, compared to $973 million for the fourth quarter of 2022. Adjusted EBIT loss was $49 million for the fourth quarter of 2023, compared to adjusted EBIT of $585 million for the fourth quarter of 2022. Adjusted EBITDA and Adjusted EBIT margins for the fourth quarter of 2023 were 16% and -4%, respectively. This compares to 44% and 27% for the fourth quarter of 2022, respectively.

Net cash generated from operating activities was $162 million for the fourth quarter of 2023, compared to $1,069 million for the fourth quarter of 2022.

Financial and Operating Results for the Full Year Ended December 31, 2023

Total revenues were $5,162 million for the full year of 2023, compared to $12,562 million for the full year of 2022, driven primarily by the decrease in freight rates.

ZIM carried 3,281 thousand TEUs in the full year of 2023, compared to 3,380 thousand TEUs in the full year of 2022. The average freight rate per TEU was $1,203 for the full year of 2023, compared to $3,240 for the full year of 2022.

Operating loss (EBIT) for the full year of 2023 was $2,511 million, compared to operating income of $6,136 million for the full year of 2022. The decrease was primarily driven by the above-mentioned decrease in revenues and an impairment loss of $2,063 million recorded in the third quarter of 2023.

Net loss for the full year of 2023 was $2,688 million, compared to net income of $4,629 million for the full year of 2022, driven mainly by the decrease in operating income (loss) and the $2,063 million impairment loss.

Adjusted EBITDA was $1,049 million for the full year of 2023, compared to $7,541 million for the full year of 2022. Adjusted EBIT loss was $422 million for the full year of 2023, compared to adjusted EBIT of $6,145 million for the full year of 2022. Adjusted EBITDA and Adjusted EBIT margins for the full year of 2023 were 20% and -8%, respectively. This compares to 60% and 49% for the full year of 2022, respectively.

Net cash generated from operating activities was $1,020 million for the full year of 2023, compared to $6,110 million for the full year 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 $1.92 billion from $4.61 billion as of December 31, 2022 to $2.69 billion as of December 31, 2023.5 Capital expenditures totaled $116 million for the year ended December 31, 2023, compared with $345 million for the year ended December 31, 2022. Net debt position as of December 31, 2023, was $2.31 billion compared to a net cash position of $279 million as of December 31, 2022, a decrease of $2.59 billion. ZIM’s net leverage ratio as of December 31, 2023, was 2.2x, compared to 0.0x as of December 31, 2022.

Use of Non-IFRS Measures in the Company’s 2024 Guidance

A reconciliation of the Company’s non-IFRS financial measures included in its full-year 2024 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.

Full-Year 2024 Guidance

In 2024, the Company expects to generate Adjusted EBITDA between $850 million and $1,450 million and Adjusted EBIT between a loss of $300 million and earnings of $300 million.

Full Report

Source: Zim Integrated Shipping Services


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