ZIM Reports Financial Results for the First Quarter of 2024; Raising Full Year 2024 Guidance
ZIM Integrated Shipping Services reported strong financial results for Q1 2024, with revenues of $1.56 billion, a 14% increase year-over-year. Net income was $92 million, reversing a net loss of $58 million from Q1 2023. Adjusted EBITDA rose 14% to $427 million, and operating income (EBIT) reached $167 million, significantly improving from a $14 million loss in the prior year. The company carried 846k TEUs, a 10% increase, with an average freight rate of $1,452 per TEU. ZIM raised its full-year 2024 guidance to an Adjusted EBITDA of $1.15-1.55 billion and Adjusted EBIT of $0 to $400 million. A dividend of $0.23 per share was declared, representing 30% of quarterly net income. However, net debt rose to $3.11 billion by March 31, 2024, compared to $2.31 billion at the end of 2023.
- Revenues increased by 14% year-over-year to $1.56 billion.
- Net income was $92 million, reversing a $58 million loss from Q1 2023.
- Adjusted EBITDA rose by 14% to $427 million.
- Operating income (EBIT) improved to $167 million from a $14 million loss.
- Carried volume increased by 10% to 846k TEUs.
- Average freight rate per TEU increased by 4% to $1,452.
- Declared a $0.23 per share dividend, totaling $28 million.
- Raised full-year 2024 guidance to Adjusted EBITDA of $1.15-1.55 billion and Adjusted EBIT of $0 to $400 million.
- Net debt increased to $3.11 billion by March 31, 2024, from $2.31 billion at the end of 2023.
- Net leverage ratio increased from 2.2x to 2.8x.
- Total cash position decreased by $442 million to $2.25 billion.
Insights
ZIM Integrated Shipping Services reported a significant turnaround in its financial performance for Q1 2024 compared to the same quarter in 2023. Key highlights include a
The increase in freight rates and carried volume are positive indicators for the company's core operations. With a 14% year-over-year revenue growth and a notable improvement in operating income (from a loss of
The company's decision to raise its full-year guidance for 2024 suggests confidence in sustained performance improvements. The guidance projects an Adjusted EBITDA between
However, it's important to note the increase in net debt from
ZIM's performance in Q1 2024 reflects broader trends in the global shipping industry. The 10% increase in carried volume to 846 thousand TEUs (twenty-foot equivalent units) aligns with the industry-wide uptick in demand amidst recovering global trade activities. The average freight rate increase to $1,452 per TEU further underscores favorable pricing dynamics in the shipping sector.
Importantly, ZIM's enhanced fleet, including the addition of LNG-powered vessels, positions the company well to meet future environmental regulations and reduce fuel costs. This strategic move could lead to long-term operational efficiencies, making ZIM more competitive in a market that increasingly values sustainability.
However, the company’s liquidity has decreased, with cash positions dropping by
Reported Revenues of
Increased Full Year 2024 Guidance to Adjusted EBITDA of
Declared Dividend of
First Quarter 2024 Highlights
- Net income for the first quarter was
$92 million $58 million $0.75 $0.50 - Adjusted EBITDA1 for the first quarter was
$427 million 14% . - Operating income (EBIT) for the first quarter was
$167 million $14 million - Revenues for the first quarter were
$1.56 billion 14% . - Carried volume in the first quarter was 846 thousand TEUs, a year-over-year increase of
10% . - Average freight rate per TEU in the first quarter was
$1,452 4% . - Net debt1 of
$3.11 billion $2.31 billion
Eli Glickman, ZIM President & CEO, stated, "We are pleased with the current positive momentum in our business. ZIM's solid first quarter results illustrate the incremental benefits from our strategic transformation and the outstanding execution of the ZIM team worldwide, as well as a significant improvement in global freight rates. Having taken important steps to revamp our fleet and enhance our cost structure, which exceeded our expectations, we delivered profitable growth in Q1 2024, as ZIM generated net income of
Mr. Glickman added, "Given the recent improved freight rate environment currently impacting more trades, we have increased our full year 2024 guidance and today forecast full year Adjusted EBITDA between
Mr. Glickman concluded, "We look forward to further implementing our differentiated strategy to create a best-in-class experience for customers and generate sustainable value for shareholders. By year's end, we expect the delivery of the final 16 out of 46 newbuild containerships that we secured, which include 28 LNG-powered vessels. With a fleet optimally suited to the trades in which we operate, together with declining unit costs, we are well positioned to achieve our volume growth targets and deliver on our commitment to profitability over the long term."
Summary of Key Financial and Operational Results | ||
Q1.24 | Q1.23 | |
Carried volume (K-TEUs).................................................... | 846 | 769 |
Average freight rate ($/TEU)............................................... | 1,452 | 1,390 |
Total Revenues ($ in millions)............................................. | 1,562 | 1,374 |
Operating income (loss) (EBIT) ($ in millions).................... | 167 | (14) |
Profit (loss) before income tax ($ in millions)...................... | 96 | (65) |
Net income (loss) ($ in millions).......................................... | 92 | (58) |
Adjusted EBITDA1 ($ in millions)........................................ | 427 | 373 |
Adjusted EBIT1 ($ in millions)............................................. | 167 | (14) |
Net income (loss) margin (%)............................................. | 6 % | (4) % |
Adjusted EBITDA margin (%)............................................. | 27 % | 27 % |
Adjusted EBIT margin (%).................................................. | 11 % | (1) % |
Diluted earnings (loss) per share ($).................................. | 0.75 | (0.50) |
Net cash generated from operating activities ($ in millions) | 326 | 174 |
Free cash flow1 ($ in millions)............................................ | 303 | 142 |
MAR 31, 2024 | DEC 31, 2023 | |
Net debt1 ($ in millions)...................................................... | 3,110 | 2,309 |
Financial and Operating Results for the First Quarter Ended March 31, 2024
Total revenues were
ZIM carried 846 thousand TEUs in the first quarter of 2024, compared to 769 thousand TEUs in the first quarter of 2023. The average freight rate per TEU was
Operating income (EBIT) for the first quarter of 2024 was
Net income for the first quarter of 2024 was
Adjusted EBITDA for the first quarter of 2024 was
Net cash generated from operating activities was
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
First Quarter 2024 Dividend and Dividend Policy
In accordance with the Company's dividend policy, the Company's Board of Directors declared a cash dividend of approximately
All future dividends are subject to the discretion of Company's Board of Directors and to the restrictions provided by Israeli law.
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.
Updated Full-Year 2024 Guidance
The Company increased its guidance for the full year of 2024 and now expects to generate Adjusted EBITDA between
Conference Call Details
Management will host a conference call and webcast (along with a slide presentation) to review the results and provide a corporate update today at 8:00 AM ET.
To access the live conference call by telephone, please dial the following numbers:
About ZIM
Founded in
Forward-Looking Statements
The following information contains, or may be deemed to contain forward-looking statements (as defined in the
Although the Company believes the expectations reflected in the forward-looking statements contained herein are reasonable, it cannot guarantee future results, level of activity, performance or achievements. Moreover, neither the Company nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. The Company assumes no duty to update any of these forward-looking statements after the date hereof to conform its prior statements to actual results or revised expectations, except as otherwise required by law.
The Company prepares its financial statements in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB).
Use of Non-IFRS Financial Measures
The Company presents non-IFRS measures as additional performance measures as the Company believes that it enables the comparison of operating performance between periods on a consistent basis. These measures should not be considered in isolation, or as a substitute for operating income, any other performance measures, or cash flow data, which were prepared in accordance with Generally Accepted Accounting Principles as measures of profitability or liquidity. Please note that Adjusted EBITDA does not take into account debt service requirements or other commitments, including capital expenditures, and therefore, does not necessarily indicate the amounts that may be available for the Company's use. In addition, the non-IFRS financial measures presented by the Company may not be comparable to similarly titled measures reported by other companies due to differences in the way these measures are calculated.
Adjusted EBITDA is a non-IFRS financial measure which we define as net income (loss) adjusted to exclude financial expenses (income), net, income taxes, depreciation and amortization in order to reach EBITDA, and further adjusted, as applicable, to exclude impairment of assets, non-cash charter hire expenses, capital gains (losses) beyond the ordinary course of business and expenses related to legal contingencies.
Adjusted EBIT is a non-IFRS financial measure which we define as net income (loss) adjusted to exclude financial expenses (income), net and income taxes, in order to reach our results from operating activities, or EBIT, and further adjusted, as applicable, to exclude impairment of assets, non-cash charter hire expenses, capital gains (losses) beyond the ordinary course of business and expenses related to legal contingencies.
Free cash flow is a non-IFRS financial measure which we define as net cash generated from operating activities minus capital expenditures, net.
Net debt is a non-IFRS financial measure which we define as face value of short- and long-term debt, minus cash and cash equivalents, bank deposits and other investment instruments. We refer to this measure as net cash when cash and cash equivalents, bank deposits and other investment instruments exceed the face value of short- and long-term debt.
Net leverage ratio is a non-IFRS financial measure which we define as net debt (see above) divided by Adjusted EBITDA for the last twelve-month period. When our net debt is less than zero, we report the net leverage ratio as zero.
See the reconciliation of net income to Adjusted EBIT and Adjusted EBITDA and net cash generated from operating activities to free cash flow in the tables provided below.
Investor Relations:
Elana Holzman
ZIM Integrated Shipping Services Ltd.
+972-4-865-2300
holzman.elana@zim.com
Leon Berman
The IGB Group
212-477-8438
lberman@igbir.com
Media:
Avner Shats
ZIM Integrated Shipping Services Ltd.
+972-4-865-2520
shats.avner@zim.com
CONSOLIDATED BALANCE SHEET (Unaudited) | |||
March 31 | December 31 | ||
2024 | 2023 | 2023 | |
Assets | |||
Vessels | 4,488.7 | 4,784.3 | 3,758.9 |
Containers and handling equipment | 822.9 | 1,233.1 | 792.9 |
Other tangible assets | 87.7 | 98.2 | 85.2 |
Intangible assets | 104.8 | 95.1 | 102.0 |
Investments in associates | 30.3 | 22.6 | 26.4 |
Other investments | 814.0 | 1,344.7 | 908.7 |
Other receivables | 82.7 | 113.9 | 97.9 |
Deferred tax assets | 2.5 | 2.9 | 2.6 |
Total non-current assets | 6,433.6 | 7,694.8 | 5,774.6 |
Inventories | 197.3 | 189.1 | 179.3 |
Trade and other receivables | 868.0 | 695.3 | 596.5 |
Other investments | 744.8 | 1,060.2 | 874.1 |
Cash and cash equivalents | 687.9 | 1,892.6 | 921.5 |
Total current assets | 2,498.0 | 3,837.2 | 2,571.4 |
Total assets | 8,931.6 | 11,532.0 | 8,346.0 |
Equity | |||
Share capital and reserves | 2,013.9 | 2,007.9 | 2,017.5 |
Retained earnings | 527.4 | 3,073.8 | 437.2 |
Equity attributable to owners of the Company | 2,541.3 | 5,081.7 | 2,454.7 |
Non-controlling interests | 4.1 | 1.1 | 3.3 |
Total equity | 2,545.4 | 5,082.8 | 2,458.0 |
Liabilities | |||
Lease liabilities | 3,716.8 | 2,993.6 | 3,244.1 |
Loans and other liabilities | 66.6 | 87.6 | 73.6 |
Employee benefits | 45.4 | 42.8 | 46.1 |
Deferred tax liabilities | 5.8 | 145.4 | 6.1 |
Total non-current liabilities | 3,834.6 | 3,269.4 | 3,369.9 |
Trade and other payables | 612.2 | 1,359.8 | 566.4 |
Provisions | 63.6 | 51.6 | 60.7 |
Contract liabilities | 292.9 | 195.7 | 198.1 |
Lease liabilities | 1,534.7 | 1,499.0 | 1,644.7 |
Loans and other liabilities | 48.2 | 73.7 | 48.2 |
Total current liabilities | 2,551.6 | 3,179.8 | 2,518.1 |
Total liabilities | 6,386.2 | 6,449.2 | 5,888.0 |
Total equity and liabilities | 8,931.6 | 11,532.0 | 8,346.0 |
CONSOLIDATED INCOME STATEMENTS (Unaudited) | ||||
Three months ended | Year ended | |||
March 31 | December 31 | |||
2024 | 2023 | 2023 | ||
Income from voyages and related services | 1,562.0 | 1,374.3 | 5,162.2 | |
Cost of voyages and related services | ||||
Operating expenses and cost of services | (1,080.8) | (939.7) | (3,885.1) | |
Depreciation | (257.7) | (380.5) | (1,449.8) | |
Impairment of assets | (2,034.9) | |||
Gross profit (loss) | 223.5 | 54.1 | (2,207.6) | |
Other operating income | 6.0 | 10.1 | 14.4 | |
Other operating expenses | (3.6) | (29.3) | ||
General and administrative expenses | (60.8) | (74.1) | (280.7) | |
Share in loss of associates | (2.1) | (0.4) | (7.8) | |
Results from operating activities | 166.6 | (13.9) | (2,511.0) | |
Finance income | 38.7 | 44.4 | 142.2 | |
Finance expenses | (109.0) | (95.2) | (446.7) | |
Net finance expenses | (70.3) | (50.8) | (304.5) | |
Profit (loss) before income taxes | 96.3 | (64.7) | (2,815.5) | |
Income taxes | (4.2) | 6.6 | 127.6 | |
Profit (loss) for the period | 92.1 | (58.1) | (2,687.9) | |
Attributable to: | ||||
Owners of the Company | 90.3 | (59.5) | (2,695.6) | |
Non-controlling interests | 1.8 | 1.4 | 7.7 | |
Profit (loss) for the period | 92.1 | (58.1) | (2,687.9) | |
Earnings (loss) per share (US$) | ||||
Basic earnings (loss) per 1 ordinary share | 0.75 | (0.50) | (22.42) | |
Diluted earnings (loss) per 1 ordinary share | 0.75 | (0.50) | (22.42) | |
Weighted average number of shares for | ||||
Basic | 120,307,283 | 120,169,288 | 120,213,031 | |
Diluted | 120,450,586 | 120,169,288 | 120,213,031 | |
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | |||
Three months ended | Year ended | ||
March 31 | December 31 | ||
2024 | 2023 | 2023 | |
Cash flows from operating activities | |||
Profit (loss) for the period | 92.1 | (58.1) | (2,687.9) |
Adjustments for: | |||
Depreciation and amortization | 260.6 | 387.2 | 1,471.8 |
Impairment loss | 2,063.4 | ||
Net finance expenses | 70.3 | 50.8 | 304.5 |
Share of losses and change in fair value of investees | 2.1 | 0.4 | 6.5 |
Capital gain, net | (6.0) | (9.8) | (10.9) |
Income taxes | 4.2 | (6.6) | (127.6) |
Other non-cash items | 1.5 | 6.3 | 18.9 |
424.8 | 370.2 | 1,038.7 | |
Change in inventories | (18.0) | 1.6 | 11.4 |
Change in trade and other receivables | (236.2) | 143.2 | 242.7 |
Change in trade and other payables, including contract liabilities | 133.3 | (91.7) | (95.1) |
Change in provisions and employee benefits | 3.2 | 1.4 | 15.9 |
(117.7) | 54.5 | 174.9 | |
Dividends received from associates | 1.2 | 0.1 | 2.3 |
Interest received | 22.0 | 49.5 | 133.8 |
Income taxes paid | (4.2) | (300.7) | (329.7) |
Net cash generated from operating activities | 326.1 | 173.6 | 1,020.0 |
Cash flows from investing activities | |||
Proceeds from sale of tangible assets, intangible | 1.5 | 12.2 | 27.4 |
Acquisition and capitalized expenditures of tangible | (24.4) | (35.9) | (115.7) |
Proceeds from sale (acquisition) of investment instruments, net | 199.0 | (161.1) | (138.2) |
Loans granted to investees | (1.2) | (1.7) | (5.4) |
Change in other receivables | 7.7 | (8.2) | 3.2 |
Change in other investments (mainly deposits), net | 1.1 | 1,400.9 | 2,005.2 |
Net cash generated from investing activities | 183.7 | 1,206.2 | 1,776.5 |
Cash flows from financing activities | |||
Repayment of lease liabilities and borrowings | (636.7) | (395.0) | (1,713.1) |
Change in short term loans | (21.0) | (21.0) | |
Dividend paid to non-controlling interests | (0.4) | (6.9) | (8.9) |
Dividend paid to owners of the Company | (769.2) | ||
Interest paid | (103.7) | (86.8) | (380.7) |
Net cash used in financing activities | (740.8) | (509.7) | (2,892.9) |
Net change in cash and cash equivalents | (231.0) | 870.1 | (96.4) |
Cash and cash equivalents at beginning of the period | 921.5 | 1,022.1 | 1,022.1 |
Effect of exchange rate fluctuation on cash held | (2.6) | 0.4 | (4.2) |
Cash and cash equivalents at the end of the period | 687.9 | 1,892.6 | 921.5 |
RECONCILIATION OF NET INCOME TO ADJUSTED EBIT* | ||
( | ||
Three months ended | ||
March 31 | ||
2024 | 2023 | |
Net income (loss) | 92 | (58) |
Financial expenses, net | 70 | 51 |
Income taxes | 4 | (7) |
Operating income (loss) (EBIT) | 167 | (14) |
Adjusted EBIT | 167 | (14) |
Adjusted EBIT margin | 11 % | (1) % |
* The table above may contain slight summation differences due to rounding. | ||
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA* | ||
( | ||
Three months ended | ||
March 31 | ||
2024 | 2023 | |
Net income (loss) | 92 | (58) |
Financial expenses, net | 70 | 51 |
Income taxes | 4 | (7) |
Depreciation and amortization | 261 | 387 |
EBITDA | 427 | 373 |
Adjusted EBITDA | 427 | 373 |
Net income (loss) margin | 6 % | (4) % |
Adjusted EBITDA margin | 27 % | 27 % |
* The table above may contain slight summation differences due to rounding. | ||
RECONCILIATION OF NET CASH GENERATED FROM OPERATING ACTIVITIES TO FREE CASH FLOW | ||
( | ||
Three months ended | ||
March 31 | ||
2024 | 2023 | |
Net cash generated from operating activities | 326 | 174 |
Capital expenditures, net | (23) | (32) |
Free cash flow | 303 | 142 |
1 See disclosure regarding "Use of Non-IFRS Financial Measures."
2 The Company does not provide IFRS guidance because it cannot be determined without unreasonable effort. See disclosure regarding "Use of Non-IFRS Measures in the Company's 2024 Guidance."
3 The number of shares used to calculate the diluted earnings per share is 120,450,586. The number of outstanding shares as of March 31, 2024 was 120,320,804.
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SOURCE Zim Integrated Shipping Services Ltd.
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