ZIM Reports Financial Results for the Fourth Quarter and the Full Year of 2023
- Total revenues for ZIM in 2023 were $5.16 billion, a 59% decrease from the previous year.
- Adjusted EBITDA for the full year 2023 was $1.05 billion, reflecting an 86% decline compared to 2022.
- ZIM's net loss for 2023 was $2.69 billion, significantly lower than the net profit of $4.63 billion in 2022.
- Operating loss (EBIT) for the full year 2023 was $2.51 billion, primarily due to a non-cash impairment loss of $2.06 billion.
- ZIM's strategic initiatives include fleet renewal with 46 newbuild containerships and a focus on cost efficiency and sustainability.
- The company aims to capitalize on growth opportunities and generate sustainable value for customers and shareholders amidst market volatility.
- None.
Insights
The reported financial results for ZIM Integrated Shipping Services Ltd. show a stark contrast between the fiscal years of 2022 and 2023. The company's transition from a net profit in 2022 to a significant net loss in 2023, including a substantial non-cash impairment loss, indicates a challenging year influenced by weakened market conditions and potentially overvalued assets.
From a financial perspective, the drastic decrease in EBITDA and EBIT margins reflects a challenging operating environment, with the shipping industry likely facing downward pressure on freight rates due to overcapacity, reduced demand, or increased competition. The reported net leverage ratio increase from 0.0x to 2.2x suggests a significant shift in the company's financial leverage, which could raise concerns about its ability to service debt and maintain liquidity in volatile market conditions.
ZIM's operational performance, as evidenced by the carried volume and average freight rate per TEU, reveals the broader industry trend of declining shipping rates and volume. This could be symptomatic of a global economic slowdown affecting trade volumes. Additionally, the company's strategic shift towards a fleet renewal program with a focus on LNG-powered vessels represents an adaptation to both environmental regulations and the need for cost efficiency in the face of a challenging market.
Their forward-looking statements regarding cost structure improvements and commercial resilience are critical as they suggest a strategic pivot towards operational efficiency and sustainability, which could be a differentiator in an industry facing increased regulatory scrutiny on emissions and environmental impact.
The financial results of ZIM signal potential macroeconomic headwinds, such as reduced global trade or economic downturns, which can have a ripple effect across the shipping industry and related sectors. The reported decrease in net cash generated from operating activities aligns with an overall decrease in profitability, which may reflect broader economic contractions that could affect stakeholder confidence and investment strategies.
The company's 2024 outlook, with an expected Adjusted EBITDA of $850 million to $1,450 million and an Adjusted EBIT ranging from a $300 million loss to $300 million earnings, underscores the uncertainty and volatility in the shipping sector. This guidance range indicates the company's cautious approach in an unpredictable market and highlights the importance of flexibility in corporate financial planning.
Full Year 2023 Revenue of
Adjusted EBITDA and Adjusted EBIT in Line with Guidance: Adjusted EBITDA2 of
Full Year 2024 Outlook: Adjusted EBITDA of
Fourth Quarter and Full Year 2023 Highlights
- Net loss for the fourth quarter was
$147 million $417 million $1.23 $3.44 $2.06 billion $2.69 billion $4.63 billion - Adjusted EBITDA for the fourth quarter was
$190 million 80% ; Adjusted EBITDA for the full year was$1.05 billion 86% . - Operating loss (EBIT) for the fourth quarter was
$54 million $585 million $2.51 billion $2.06 billion $6.14 billion - Adjusted EBIT loss for the fourth quarter was
$49 million $585 million $422 million $6.15 billion - Revenues for the fourth quarter were
$1.21 billion 45% ; revenues for the full year were$5.16 billion 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 of2.9% . - Average freight rate per TEU in the fourth quarter was
$1,102 48% ; average freight rate per TEU in the full year was$1,203 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 $279 million
Eli Glickman, ZIM President & CEO, stated, "Against a backdrop of weakened market conditions, industry disruptions and operational challenges in 2023, ZIM's exceptional team of professionals remained resilient and intently focused on achieving operational excellence and delivering the highest level of care for our valued customers. At the same time, we made significant progress advancing our strategic transformation and are pleased to have already started to realize the favorable outcomes we projected. Specifically, we are well on our way to markedly improving our cost structure, enhancing our commercial resilience, and enabling reduced carbon emissions for both ZIM and our customers moving forward."
Mr. Glickman added, "Our fleet renewal program, which includes 46 newbuild containerships, focuses on shifting ZIM's reliance on older, less fuel-efficient vessels to a cost and fuel-efficient, more sustainable and largely LNG-powered newbuild fleet, and is progressing as planned following the delivery of 24 new vessels to date. Our cost per TEU is declining and we anticipate additional improvements as our 22 outstanding newbuilds are delivered during the remainder of the year. We continue to review our services to best address customers' evolving needs and position ZIM to capitalize on attractive growth opportunities."
Mr. Glickman concluded, "During a time when the market remains volatile, our strong cash position will enable us to continue to maintain a long-term view as we focus on generating sustainable value for both customers and shareholders. Looking ahead, we intend to continue to take decisive steps to further benefit from our strategic transformation and expect ZIM to emerge in a stronger position than ever in 2025 and beyond."
Summary of Key Financial and Operational Results | ||||
Q4.23 | Q4.22 | FY.23 | FY.22 | |
Carried volume (K-TEUs).................................................... | 786 | 823 | 3,281 | 3,380 |
Average freight rate ($/TEU)............................................... | 1,102 | 2,122 | 1,203 | 3,240 |
Total Revenues ($ in millions)............................................. | 1,205 | 2,189 | 5,162 | 12,562 |
Operating income (loss) (EBIT) ($ in millions).................... | (54) | 585 | (2,511) | 6,136 |
Profit (loss) before income tax ($ in millions)...................... | (137) | 558 | (2,816) | 6,027 |
Net income (loss) ($ in millions).......................................... | (147) | 417 | (2,688) | 4,629 |
Adjusted EBITDA2 ($ in millions)........................................ | 190 | 973 | 1,049 | 7,541 |
Adjusted EBIT2 ($ in millions)............................................. | (49) | 585 | (422) | 6,145 |
Adjusted EBITDA margin (%)............................................. | 16 | 44 | 20 | 60 |
Adjusted EBIT margin (%).................................................. | (4) | 27 | (8) | 49 |
Diluted earnings (loss) per share ($).................................. | (1.23) | 3.44 | (22.42) | 38.35 |
Net cash generated from operating activities ($ in millions) | 162 | 1,069 | 1,020 | 6,110 |
Free cash flow2 ($ in millions)............................................ | 128 | 1,048 | 919 | 5,796 |
DEC.23 | DEC.22 | |||
Net debt (Net cash)2 ($ in millions).................................... | 2,309 | (279) | ||
Financial and Operating Results for the Fourth Quarter Ended December 31, 2023
Total revenues were
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
Operating loss (EBIT) for the fourth quarter of 2023 was
Net loss for the fourth quarter of 2023 was
Adjusted EBITDA for the fourth quarter of 2023 was
Net cash generated from operating activities was
Financial and Operating Results for the Full Year Ended December 31, 2023
Total revenues were
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
Operating loss (EBIT) for the full year of 2023 was
Net loss for the full year of 2023 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) decreased by
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
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:
Annual Report on Form 20-F for 2023
In accordance with Section 203.01 of the New York Stock Exchange Listed Company Manual, the Company's Annual Report filed with the
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 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 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) | ||||
( | ||||
December 31 | ||||
2023 | 2022 | |||
Assets | ||||
Vessels | 3,758.9 | 4,409.9 | ||
Containers and handling equipment | 792.9 | 1,242.8 | ||
Other tangible assets | 85.2 | 98.5 | ||
Intangible assets | 102.0 | 92.9 | ||
Investments in associates | 26.4 | 22.0 | ||
Other investments | 908.7 | 1,373.2 | ||
Other receivables | 97.9 | 112.1 | ||
Deferred tax assets | 2.6 | 2.3 | ||
Total non-current assets | 5,774.6 | 7,353.7 | ||
Inventories | 179.3 | 190.7 | ||
Trade and other receivables | 596.5 | 825.7 | ||
Other investments | 874.1 | 2,233.1 | ||
Cash and cash equivalents | 921.5 | 1,022.1 | ||
Total current assets | 2,571.4 | 4,271.6 | ||
Total assets | 8,346.0 | 11,625.3 | ||
Equity | ||||
Share capital and reserves | 2,017.5 | 1,987.7 | ||
Retained earnings | 437.2 | 3,901.9 | ||
Equity attributable to owners of the Company | 2,454.7 | 5,889.6 | ||
Non-controlling interests | 3.3 | 6.3 | ||
Total equity | 2,458.0 | 5,895.9 | ||
Liabilities | ||||
Lease liabilities | 3,244.1 | 2,778.7 | ||
Loans and other liabilities | 73.6 | 91.9 | ||
Employee benefits | 46.1 | 45.2 | ||
Deferred tax liabilities | 6.1 | 151.4 | ||
Total non-current liabilities | 3,369.9 | 3,067.2 | ||
Trade and other payables | 566.4 | 896.2 | ||
Provisions | 60.7 | 50.2 | ||
Contract liabilities | 198.1 | 238.9 | ||
Lease liabilities | 1,644.7 | 1,380.8 | ||
Loans and other liabilities | 48.2 | 96.1 | ||
Total current liabilities | 2,518.1 | 2,662.2 | ||
Total liabilities | 5,888.0 | 5,729.4 | ||
Total equity and liabilities | 8,346.0 | 11,625.3 | ||
CONSOLIDATED INCOME STATEMENTS (Unaudited) | ||||
( | ||||
Three Months Ended | Year Ended | |||
2023 | 2022 | 2023 | 2022 | |
Income from voyages and related services | 1,205.3 | 2,188.9 | 5,162.2 | 12,561.6 |
Cost of voyages and related services | ||||
Operating expenses and cost of services | (963.1) | (1,134.3) | (3,885.1) | (4,764.5) |
Depreciation | (237.0) | (380.6) | (1,449.8) | (1,370.3) |
Impairment of assets | (2,034.9) | |||
Gross profit (loss) | 5.2 | 674.0 | (2,207.6) | 6,426.8 |
Other operating income | 11.9 | 8.1 | 14.4 | 48.9 |
Other operating expenses | 3.2 | (0.5) | (29.3) | (0.9) |
General and administrative expenses | (71.3) | (94.3) | (280.7) | (338.3) |
Share of loss of associates | (2.6) | (2.6) | (7.8) | (0.7) |
Results from operating activities | (53.6) | 584.7 | (2,511.0) | 6,135.8 |
Finance income | 24.5 | 48.6 | 142.2 | 130.9 |
Finance expenses | (108.0) | (75.4) | (446.7) | (239.4) |
Net finance expenses | (83.5) | (26.8) | (304.5) | (108.5) |
Profit (loss) before income taxes | (137.1) | 557.9 | (2,815.5) | 6,027.3 |
Income taxes | (9.5) | (141.4) | 127.6 | (1,398.3) |
Profit (loss) for the period | (146.6) | 416.5 | (2,687.9) | 4,629.0 |
Attributable to: | ||||
Owners of the Company | (148.4) | 414.2 | (2,695.6) | 4,619.4 |
Non-controlling interests | 1.8 | 2.3 | 7.7 | 9.6 |
Profit (loss) for the period | (146.6) | 416.5 | (2,687.9) | 4,629.0 |
Earnings (loss) per share (US$) | ||||
Basic earnings (loss) per 1 ordinary share | (1.23) | 3.45 | (22.42) | 38.49 |
Diluted earnings (loss) per 1 ordinary share | (1.23) | 3.44 | (22.42) | 38.35 |
Weighted average number of shares for | ||||
Basic | 120,266,569 | 120,098,658 | 120,213,031 | 120,012,375 |
Diluted | 120,266,569 | 120,431,208 | 120,213,031 | 120,444,889 |
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | ||
( | ||
Year ended December 31 | ||
2023 | 2022 | |
Cash flows from operating activities | ||
Profit (loss) for the year | (2,687.9) | 4,629.0 |
Adjustments for: | ||
Depreciation and amortization | 1,471.8 | 1,396.3 |
Impairment loss | 2,063.4 | |
Net finance expenses | 304.5 | 108.5 |
Share of profits (losses) and change in fair value of investees | 6.5 | (2.1) |
Capital gains, net | (10.9) | (42.7) |
Income taxes | (127.6) | 1,398.3 |
Other non-cash items | 18.9 | 39.7 |
1,038.7 | 7,527.0 | |
Change in inventories | 11.4 | (71.7) |
Change in trade and other receivables | 242.7 | 496.6 |
Change in trade and other payables including contract liabilities | (95.1) | (325.7) |
Change in provisions and employee benefits | 15.9 | 15.9 |
174.9 | 115.1 | |
Dividends received from associates | 2.3 | 0.9 |
Interest received | 133.8 | 53.2 |
Income taxes paid | (329.7) | (1,586.1) |
Net cash generated from operating activities | 1,020.0 | 6,110.1 |
Cash flows from investing activities | ||
Proceeds from sale of tangible assets, intangible assets and interest in | 27.4 | 48.1 |
Acquisition and capitalized expenditures of tangible assets, intangible | (115.7) | (345.5) |
Acquisition of investment instruments, net | (138.2) | (1,433.1) |
Loans granted to investees | (5.4) | |
Change in other receivables | 3.2 | (20.2) |
Change in other investments (mainly deposits), net | 2,005.2 | 105.7 |
Net cash generated from (used in) investing activities | 1,776.5 | (1,645.0) |
Cash flows from financing activities | ||
Receipt of long-term loans and other long-term liabilities | 59.2 | |
Repayment of lease liabilities and borrowings | (1,713.1) | (1,449.4) |
Change in short-term loans | (21.0) | (53.5) |
Dividend paid to non-controlling interests | (8.9) | (8.4) |
Dividend paid to owners of the company | (769.2) | (3,303.3) |
Interest paid | (380.7) | (221.0) |
Net cash used in financing activities | (2,892.9) | (4,976.4) |
Net change in cash and cash equivalents | (96.4) | (511.3) |
Cash and cash equivalents at beginning of the year | 1,022.1 | 1,543.3 |
Effect of exchange rate fluctuation on cash held | (4.2) | (9.9) |
Cash and cash equivalents at the end of the year | 921.5 | 1,022.1 |
RECONCILIATION OF NET INCOME TO ADJUSTED EBIT* | ||||
( | ||||
Three months ended | Year ended | |||
2023 | 2022 | 2023 | 2022 | |
Net income (loss) | (147) | 417 | (2,688) | 4,629 |
Financial expenses, net | 84 | 27 | 305 | 109 |
Income taxes | 9 | 141 | (128) | 1,398 |
Operating income (loss) (EBIT) | (54) | 585 | (2,511) | 6,136 |
Capital gain (loss), beyond the ordinary course of business | (1) | 0 | 20 | (1) |
Impairment of assets | 0 | 0 | 2,063 | 0 |
Expenses related to legal contingencies | 5 | 0 | 5 | 10 |
Adjusted EBIT | (49) | 585 | (422) | 6,145 |
Adjusted EBIT margin | (4) % | 27 % | (8) % | 49 % |
* The table above may contain slight summation differences due to rounding. | ||||
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA* | |||||
( | |||||
Three months ended | Year ended | ||||
2023 | 2022 | 2023 | 2022 | ||
Net income (loss) | (147) | 417 | (2,688) | 4,629 | |
Financial expenses, net | 84 | 27 | 305 | 109 | |
Income taxes | 9 | 141 | (128) | 1,398 | |
Depreciation and amortization | 239 | 388 | 1,472 | 1,396 | |
EBITDA | 186 | 973 | (1,039) | 7,532 | |
Capital gain (loss), beyond the ordinary course of business | (1) | 0 | 20 | (1) | |
Impairment of assets | 0 | 0 | 2,063 | 0 | |
Expenses related to legal contingencies | 5 | 0 | 5 | 10 | |
Adjusted EBITDA | 190 | 973 | 1,049 | 7,541 | |
Adjusted EBITDA margin | 16 % | 44 % | 20 % | 60 % | |
* 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 | Year ended | |||
2023 | 2022 | 2023 | 2022 | |
Net cash generated from operating activities | 162 | 1,069 | 1,020 | 6,110 |
Capital expenditures, net | (34) | (21) | (101) | (314) |
Free cash flow | 128 | 1,048 | 919 | 5,796 |
1 See Note 7 to the Company's Financial Statements for the year ended December 31, 2023 for additional information regarding the impairment analysis and results.
2 See disclosure regarding "Use of Non-IFRS Financial Measures."
3 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."
4 The number of shares used to calculate the diluted loss per share is 120,266,569. The number of outstanding shares as of December 31, 2023 was 120,286,627.
5 On April 4, 2023, the Company distributed a dividend to shareholders of
Logo - https://mma.prnewswire.com/media/1933864/ZIM_Logo.jpg
View original content:https://www.prnewswire.com/news-releases/zim-reports-financial-results-for-the-fourth-quarter-and-the-full-year-of-2023-302087953.html
SOURCE Zim Integrated Shipping Services Ltd.
FAQ
What was ZIM's net loss for the full year 2023?
How much did ZIM's total revenues decrease year-over-year in 2023?
What was the percentage decrease in Adjusted EBITDA for ZIM in 2023?
What was the primary driver of ZIM's operating loss for the full year 2023?
How many newbuild containerships are included in ZIM's fleet renewal program?
What are ZIM's strategic focuses to enhance its market position?
