ZIM Reports Financial Results for the Fourth Quarter and Full Year of 2022
ZIM Integrated Shipping Services Ltd. reported strong financial results for 2022, with full-year revenue of $12.56 billion and net income of $4.63 billion. Adjusted EBITDA reached $7.54 billion, reflecting a 14% year-over-year growth. However, Q4 2022 results showed a significant decline in net income to $417 million, down from $1.71 billion in Q4 2021. The company declared a $769 million dividend, equating to $6.40 per share, representing 44% of total 2022 net income. For 2023, ZIM anticipates Adjusted EBITDA of $1.8-$2.2 billion amid challenging market conditions.
- Full-year 2022 revenue increased by 17% to $12.56 billion.
- Net income for 2022 remained stable at $4.63 billion compared to $4.65 billion in 2021.
- Declared dividend of approximately $769 million for Q4 2022, representing 44% of net income.
- Q4 2022 net income fell significantly by 76% year-over-year to $417 million.
- Adjusted EBITDA in Q4 decreased by 59% to $973 million.
- Average freight rates per TEU declined by 42% in Q4 compared to Q4 2021.
Generates Strong Full Year Results: Revenue of
Full Year 2023 Guidance: Expect to Generate Adjusted EBITDA of
Declared Q4 2022 Dividend of Approximately
HAIFA, Israel, March 13, 2023 /PRNewswire/ -- 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, 2022.
Fourth Quarter and Full Year 2022 Highlights
- Net income for the fourth quarter was
$417 million (compared to$1.71 billion in the fourth quarter of 2021), or$3.44 per diluted share3 (compared to$14.17 in the fourth quarter of 2021); net income for the full year was$4.63 billion (compared to$4.65 billion for the full year of 2021) - Adjusted EBITDA for the fourth quarter was
$973 million , a year-over-year decrease of59% ; Adjusted EBITDA for the full year was$7.54 billion , a year-over-year increase of14% - Operating income (EBIT) for the fourth quarter was
$585 million , a year-over-year decrease of72% ; operating income (EBIT) for the full year was$6.14 billion , a year-over-year increase of5% . Reconciliation items between operating income and Adjusted EBIT in the fourth quarter and full year were minor - Revenues for the fourth quarter were
$2.19 billion , a year-over-year decrease of37% ; revenues for the full year were$12.56 billion , a year-over-year increase of17% - Carried volume in the fourth quarter was 823 thousand TEUs, a year-over-year decrease of
4% ; carried volume in the full year was 3,380 thousand TEUs, a year-over-year decrease of3% - Average freight rate per TEU in the fourth quarter was
$2,122 , a year-over-year decrease of42% ; average freight rate per TEU in the full year was$3,240 , a year-over-year increase of16% - Net leverage ratio1 of 0.0x at December 31, 2022, similar to December 31, 2021; reached positive net cash position of
$279 million as of December 31, 2022 - Declared dividend of approximately
$769 million , or$6.40 per share, representing, together with previous distributions made on account of 2022, approximately44% of the full year 2022 net income
Eli Glickman, ZIM President & CEO, stated, "2022 was an exceptional year for ZIM, as we capitalized on both our differentiated strategy and the attractive market, driving record full year Adjusted EBITDA and EBIT results. Returning cash to shareholders remains a priority for our company, and we are pleased to have drawn on our strong performance to declare a fourth quarter dividend of approximately
Mr. Glickman added, "Over the past two years we have taken important steps amidst a highly lucrative market to best position ZIM to execute in a more normalized trading environment. Specifically, we enhanced our vessel sourcing strategy to secure attractive newbuild capacity and improve our cost structure. We have also diversified our commercial presence to ensure ZIM is optimizing its performance to create long-term sustainable shareholder value. Our chartered LNG-powered newbuild capacity is expected to significantly improve our cost structure throughout 2023 and beyond, strengthen our commercial prospects and advance our ESG objectives for ZIM and our customers. Consistent with our global niche strategy, we continuously review and adapt our network to swiftly respond to customers' changing needs, capitalize on shifting market dynamics and new growth opportunities and maximize profitability."
Mr. Glickman concluded, "While macroeconomic uncertainties, the precipitous decline in freight rates over the past few months and the supply-demand imbalance continue to drive a challenging near-term outlook for container shipping, we are confident in ZIM's strategy and believe we will generate positive EBIT in 2023. For the full year, we expect to generate Adjusted EBITDA between
Summary of Key Financial and Operational Results
Q4.22 | Q4.21 | 2022 | 2021 | |
Carried volume (K-TEUs) | 823 | 858 | 3,380 | 3,481 |
Average freight rate ($/TEU) | 2,122 | 3,630 | 3,240 | 2,786 |
Revenue ($ in millions) | 2,189 | 3,466 | 12,562 | 10,729 |
Operating income (EBIT) ($ in millions) | 585 | 2,116 | 6,136 | 5,816 |
Profit before income tax ($ in millions) | 558 | 2,083 | 6,027 | 5,660 |
Net income ($ in millions) | 417 | 1,708 | 4,629 | 4,649 |
Adjusted EBITDA1 ($ in millions) | 973 | 2,362 | 7,541 | 6,597 |
Adjusted EBIT1 ($ in millions) | 585 | 2,114 | 6,145 | 5,820 |
Adjusted EBITDA margin | 44 % | 68 % | 60 % | 61 % |
Adjusted EBIT margin | 27 % | 61 % | 49 % | 54 % |
Diluted EPS ($) | 3.44 | 14.17 | 38.35 | 39.02 |
Net cash generated from operating activities | 1,069 | 2,005 | 6,110 | 5,971 |
Free cash flow1 ($ in millions) | 1,048 | 1,661 | 5,796 | 4,877 |
DEC.22 | DEC.21 | |||
Net debt (Net cash)1 ($ in millions) | (279) | (509) |
Financial and Operating Results for the Fourth Quarter Ended December 31, 2022
Total revenues were
ZIM carried 823 thousand TEUs in the fourth quarter of 2022, compared to 858 thousand TEUs in the fourth quarter of 2021. The average freight rate per TEU was
Operating income (EBIT) for the fourth quarter of 2022 was
Net income for the fourth quarter of 2022 was
Adjusted EBITDA was
Net cash generated from operating activities was
Financial and Operating Results for the Full Year Ended December 31, 2022
Total revenues were
ZIM carried 3,380 thousand TEUs in the full year of 2022, compared to 3,481 thousand TEUs in the full year of 2021. The average freight rate per TEU was
Operating income (EBIT) for the full year of 2022 was
Net income for the full year of 2022 was
Adjusted EBITDA 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) increased by
2022 Dividends
In accordance with the Company's dividend policy, ZIM's Board of Directors declared a cash dividend of approximately
Use of Non-IFRS Measures in the Company's 2023 Guidance
A reconciliation of the Company's non-IFRS financial measures included in its full-year 2023 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 2023 Guidance
In 2023, the Company expects to generate Adjusted EBITDA of 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: United States +1-855-265-6958 or +1-718-705-8796; Israel +972-3-721-9662 or UK/international +44-1-212-818-004. The call (and slide presentation) will be available via live webcast through ZIM's website, located at the following link. Following the conclusion of the call, a replay of the conference call will be available on the Company's website.
Annual Report on Form 20-F for 2022
In accordance with rule 203.01 of the NYSE, the Company's Annual Report filed with the Securities and Exchange Commission on March 13, 2023, on Form 20-F is available on the Company's website. Hard copies of the Annual Report will be provided free of charge upon request from the Company.
About ZIM
Founded in Israel in 1945, ZIM (NYSE: ZIM) is a leading global container liner shipping company with established operations in more than 90 countries serving approximately 34,000 customers in over 300 ports worldwide. ZIM leverages digital strategies and a commitment to ESG values to provide customers innovative seaborne transportation and logistics services and exceptional customer experience. ZIM's differentiated global-niche strategy, based on agile fleet management and deployment, covers major trade routes with a focus on select markets where the company holds competitive advantages. Additional information about ZIM is available at www.ZIM.com.
Forward-Looking Statements
The following information contains, or may be deemed to contain forward-looking statements (as defined in the U.S. Private Securities Litigation Reform Act of 1995). In some cases, you can identify these statements by forward-looking words such as "may," "might," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions about the Company, may include projections of the Company's future financial results, its anticipated growth strategies and anticipated trends in its business. These statements are only predictions based on the Company's current expectations and projections about future events or results. There are important factors that could cause the Company's actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause such differences include, but are not limited to: market changes in freight, bunker, charter and other rates or prices, supply-demand fluctuations in the containerized shipping market, new legislation or regulation affecting the Company's operations, new competition and changes in the competitive environment, the outcome of legal proceedings to which the Company is a party, global, regional and/or local political instability, inflation rate fluctuations, capital markets fluctuations and other risks and uncertainties detailed from time to time in the Company's filings with the U.S. Securities and Exchange Commission (SEC), including under the caption "Risk Factors" in its 2022 Annual Report filed with the SEC on March 13, 2023.
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 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 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 EBITDA and Adjusted EBIT 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 | ||
(U.S. dollars in millions) | ||
December 31 | ||
2022 | 2021 | |
(Audited) | (Audited) | |
Assets | ||
Vessels | 4,409.9 | 2,957.8 |
Containers and handling equipment | 1,242.8 | 1,365.8 |
Other tangible assets | 98.5 | 68.9 |
Intangible assets | 92.9 | 73.8 |
Investments in associates | 22.0 | 12.2 |
Other investments | 1,373.2 | 169.2 |
Other receivables | 112.1 | 107.2 |
Deferred tax assets | 2.3 | 2.1 |
Total non-current assets | 7,353.7 | 4,757.0 |
Inventories | 190.7 | 119.0 |
Trade and other receivables | 825.7 | 1,278.0 |
Other investments | 2,233.1 | 2,144.5 |
Cash and cash equivalents | 1,022.1 | 1,543.3 |
Total current assets | 4,271.6 | 5,084.8 |
Total assets | 11,625.3 | 9,841.8 |
Equity | ||
Share Capital and reserves | 1,987.7 | 2,011.4 |
Retained earnings | 3,901.9 | 2,580.6 |
Equity attributable to owners of the Company | 5,889.6 | 4,592.0 |
Non-controlling interests | 6.3 | 7.5 |
Total equity | 5,895.9 | 4,599.5 |
Liabilities | ||
Lease liabilities | 2,778.7 | 2,178.7 |
Loans and other liabilities | 91.9 | 120.8 |
Employee benefits | 45.2 | 65.6 |
Deferred tax liabilities | 151.4 | 120.6 |
Total non-current liabilities | 3,067.2 | 2,485.7 |
Trade and other payables | 896.2 | 1,086.3 |
Provisions | 50.2 | 28.3 |
Contract liabilities | 238.9 | 618.3 |
Lease liabilities | 1,380.8 | 893.0 |
Loans and other liabilities | 96.1 | 130.7 |
Total current liabilities | 2,662.2 | 2,756.6 |
Total liabilities | 5,729.4 | 5,242.3 |
Total equity and liabilities | 11,625.3 | 9,841.8 |
CONSOLIDATED INCOME STATEMENTS | ||||
(U.S. dollars in millions, except per share data) | ||||
Three months ended | Year ended | |||
2022 | 2021 | 2022 | 2021 | |
(Unaudited) | (Unaudited) | (Audited) | (Audited) | |
Income from voyages and related services | 2,188.9 | 3,466.4 | 12,561.6 | 10,728.7 |
Cost of voyages and related services | ||||
Operating expenses and cost of services | (1,134.3) | (1,029.0) | (4,764.5) | (3,905.9) |
Depreciation | (380.6) | (242.4) | (1,370.3) | (756.3) |
Gross profit | 674.0 | 2,195.0 | 6,426.8 | 6,066.5 |
Other operating income | 8.1 | 5.0 | 48.9 | 14.5 |
Other operating expenses | (0.5) | (0.3) | (0.9) | (1.0) |
General and administrative expenses | (94.3) | (83.8) | (338.3) | (267.7) |
Share of profits (loss) of associates | (2.6) | 0.9 | (0.7) | 4.0 |
Results from operating activities | 584.7 | 2,116.8 | 6,135.8 | 5,816.3 |
Finance income | 48.6 | 9.7 | 130.9 | 18.8 |
Finance expenses | (75.4) | (43.9) | (239.4) | (175.6) |
Net finance expenses | (26.8) | (34.2) | (108.5) | (156.8) |
Profit before income taxes | 557.9 | 2,082.5 | 6,027.3 | 5,659.5 |
Income taxes | (141.4) | (374.1) | (1,398.3) | (1,010.4) |
Profit for the period | 416.5 | 1,708.4 | 4,629.0 | 4,649.1 |
Attributable to: | ||||
Owners of the Company | 414.2 | 1,705.1 | 4,619.4 | 4,640.3 |
Non-controlling interests | 2.3 | 3.3 | 9.6 | 8.8 |
Profit for the period | 416.5 | 1,708.4 | 4,629.0 | 4,649.1 |
Earnings per share (US$) | ||||
Basic earnings per 1 ordinary share | 3.45 | 14.34 | 38.49 | 40.31 |
Diluted earnings per 1 ordinary share | 3.44 | 14.17 | 38.35 | 39.02 |
Weighted average number of shares for | ||||
Basic | 120,098,658 | 118,908,731 | 120,012,375 | 115,105,504 |
Diluted | 120,431,208 | 120,332,347 | 120,444,889 | 118,933,723 |
CONSOLIDATED STATEMENTS OF CASH FLOW | ||
(U.S. dollars in millions) | ||
Year ended December 31, | ||
2022 | 2021 | |
(Audited) | (Audited) | |
Cash flows from operating activities | ||
Profit for the year | 4,629.0 | 4,649.1 |
Adjustments for: | ||
Depreciation and amortization | 1,396.3 | 779.2 |
Net finance expenses | 108.5 | 156.8 |
Share of profits and change in fair value of investees | (2.1) | (4.7) |
Capital gains, net | (42.7) | (8.7) |
Income taxes | 1,398.3 | 1,010.4 |
Other non-cash items | 39.7 | 20.8 |
7,527.0 | 6,602.9 | |
Change in inventories | (71.7) | (66.8) |
Change in trade and other receivables | 496.6 | (766.5) |
Change in trade and other payables including contract liabilities | (325.7) | 555.9 |
Change in provisions and employee benefits | 15.9 | 6.6 |
115.1 | (270.8) | |
Dividends received | 0.9 | 4.4 |
Interest received | 53.2 | 3.5 |
Income taxes paid | (1,586.1) | (369.1) |
Net cash generated from operating activities | 6,110.1 | 5,970.9 |
Cash flows from investing activities | ||
Proceeds from sale of tangible assets, intangible assets and interest in | 48.1 | 10.9 |
Acquisition and capitalized expenditures of tangible assets, intangible | (345.5) | (1,005.0) |
Acquisition of investment instruments, net | (1,433.1) | (182.5) |
Change in other receivables | (20.2) | (101.8) |
Change in other investments (mainly deposits), net | 105.7 | (2,064.7) |
Net cash used in investing activities | (1,645.0) | (3,343.1) |
Cash flows from financing activities | ||
Receipt of long-term loans and other long-term liabilities | 59.2 | 50.0 |
Issuance of share capital, net of issuance costs | 205.4 | |
Repayment of lease liabilities and borrowings | (1,449.4) | (1,191.3) |
Change in short-term loans | (53.5) | (16.0) |
Dividend paid to non-controlling interests | (8.4) | (4.7) |
Dividend paid to owners of the Company | (3,303.3) | (536.4) |
Interest paid | (221.0) | (160.0) |
Net cash used in financing activities | (4,976.4) | (1,653.0) |
Net change in cash and cash equivalents | (511.3) | 974.8 |
Cash and cash equivalents at beginning of the year | 1,543.3 | 570.4 |
Effect of exchange rate fluctuation on cash held | (9.9) | (1.9) |
Cash and cash equivalents at the end of the year | 1,022.1 | 1,543.3 |
RECONCILIATION OF NET INCOME TO ADJUSTED EBIT | ||||
(U.S. dollars in millions) | ||||
Three months ended | Year ended | |||
2022 | 2021 | 2022 | 2021 | |
Net income | 417 | 1,708 | 4,629 | 4,649 |
Financial expenses (income), net | 27 | 34 | 109 | 157 |
Income taxes | 141 | 374 | 1,398 | 1,010 |
Operating income (EBIT) | 585 | 2,116 | 6,136 | 5,816 |
Non-cash charter hire expenses | - | 1 | - | 2 |
Capital gain, beyond the ordinary course of | - | - | (1) | - |
Expenses related to legal contingencies | - | (3) | 10 | 2 |
Adjusted EBIT | 585 | 2,114 | 6,145 | 5,820 |
Adjusted EBIT margin | 27 % | 61 % | 49 % | 54 % |
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA | ||||
(U.S. dollars in millions) | ||||
Three months ended | Year ended | |||
2022 | 2021 | 2022 | 2021 | |
Net income | 417 | 1,708 | 4,629 | 4,649 |
Financial expenses (income), net | 27 | 34 | 109 | 157 |
Income taxes | 141 | 374 | 1,398 | 1,010 |
Depreciation and amortization | 388 | 249 | 1,396 | 780 |
EBITDA | 973 | 2,365 | 7,532 | 6,596 |
Non-cash charter hire expenses | - | - | - | (1) |
Capital gain, beyond the ordinary course of | - | - | (1) | - |
Expenses related to legal contingencies | - | (3) | 10 | 2 |
Adjusted EBITDA | 973 | 2,362 | 7,541 | 6,597 |
Adjusted EBITDA margin | 44 % | 68 % | 60 % | 61 % |
RECONCILIATION OF NET CASH GENERATED FROM OPERATING ACTIVITES TO FREE CASH | ||||
FLOW | ||||
(U.S. dollars in millions) | ||||
Three months ended | Year ended | |||
2022 | 2021 | 2022 | 2021 | |
Net cash generated from operating activities | 1,069 | 2,005 | 6,110 | 5,971 |
Capital expenditures, net | (21) | (344) | (314) | (1,094) |
Free cash flow | 1,048 | 1,661 | 5,796 | 4,877 |
[1] See disclosure regarding "Use of Non-IFRS Financial Measures."
[2] The Company does not provide IFRS guidance because it is not readily available. See disclosure regarding "Use of Non-IFRS Measures in the Company's 2023 Guidance."
[3] The number of shares used to calculate the diluted earnings per share is 120,431,208. The number of outstanding shares as of December 31, 2022, was 120,149,921.
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