ZIM Reports Financial Results for the Second Quarter of 2023
- ZIM's revenues for the second quarter of 2023 decreased by 62% compared to the same period in 2022.
- The company's net loss for the second quarter of 2023 was $213 million, compared to net income of $1,336 million in the second quarter of 2022.
- ZIM's adjusted EBITDA for the second quarter of 2023 was $275 million, a year-over-year decrease of 87%.
- The average freight rate per TEU in the second quarter of 2023 was $1,193, a year-over-year decrease of 67%.
- ZIM expects to generate adjusted EBITDA of $1.2 billion to $1.6 billion and adjusted EBIT loss of $500 million to $100 million for the full year 2023.
- None.
Reported Revenues of
Second Quarter 2023 Highlights
- Net loss for the second quarter was
(compared to net income of$213 million in the second quarter of 2022), or a diluted loss per share of$1,336 million 2 (compared to diluted earnings per share of$1.79 in the second quarter of 2022). Net loss for the quarter was negatively impacted by a non-cash after tax item of$11.07 related to the redelivery of certain vessels.$51 million - Adjusted EBITDA for the second quarter was
, a year-over-year decrease of$275 million 87% - Operating loss (EBIT) for the second quarter was
, compared to operating income of$168 million in the second quarter of 2022$1,764 million - Adjusted EBIT loss for the second quarter was
, compared to Adjusted EBIT of$147 million in the second quarter of 2022$1,764 million - Revenues for the second quarter were
, a year-over-year decrease of$1,310 million 62% - Carried volume in the second quarter was 860 thousand TEUs, a slight year-over-year increase
- Average freight rate per TEU in the second quarter was
, a year-over-year decrease of$1,193 67% - Net leverage ratio1 of 0.5x at June 30, 2023, compared to 0.0x as of December 31, 2022; net debt of
, compared to net cash of$1,633 million as of December 31, 2022$279 million - Full year 2023 guidance: the Company expects to generate Adjusted EBITDA of
to$1.2 billion and Adjusted EBIT loss of$1.6 billion to$500 3$100 million
Eli Glickman, ZIM President & CEO, stated, "We continue to take proactive steps to respond to current market realities, with a focus on minimizing costs while optimizing our commercial strategy. We have taken action to rationalize our existing capacity and routinely review our services to adapt our network to customer preferences and identify new commercial opportunities. We also explore opportunities to leverage operational collaborations to improve efficiencies. At the same time, as the year progresses, and into 2024, we expect our cost structure to improve in tandem with the delivery of our highly competitive, fuel-efficient, newbuild tonnage, including 28 LNG-powered vessels."
Mr. Glickman added, "Although our second quarter results reflected continued near-term challenges in the container shipping market, our total cash position of
Mr. Glickman concluded, "Based on a soft peak season and demand that is expected to remain subdued for the remainder of the year, ZIM forecasts full year Adjusted EBITDA of
Summary of Key Financial and Operational Results
Q2.23 | Q2.22 | 1H.23 | 1H.22 | |
Carried volume (K-TEUs).................................. | 860 | 856 | 1,629 | 1,715 |
Average freight rate ($/TEU)............................. | 1,193 | 3,596 | 1,286 | 3,722 |
Total Revenues ($ in millions)........................... | 1,310 | 3,429 | 2,684 | 7,145 |
Operating income (loss) (EBIT) ($ in millions) | (168) | 1,764 | (182) | 4,007 |
Profit (loss) before income tax ($ in millions).... | (272) | 1,736 | (337) | 3,955 |
Net income (loss) ($ in millions)........................ | (213) | 1,336 | (271) | 3,047 |
Adjusted EBITDA1 ($ in millions)...................... | 275 | 2,101 | 648 | 4,634 |
Adjusted EBIT1 ($ in millions)........................... | (147) | 1,764 | (160) | 4,006 |
Adjusted EBITDA margin (%)............................ | 21 | 61 | 24 | 65 |
Adjusted EBIT margin (%)................................. | (11) | 51 | (6) | 56 |
Diluted earnings (loss) per share ($)................. | (1.79) | 11.07 | (2.29) | 25.26 |
Net cash generated from operating | 347 | 1,710 | 520 | 3,370 |
Free cash flow1 ($ in millions)........................... | 321 | 1,639 | 463 | 3,122 |
JUN.23 | DEC.22 | |||
Net debt (Net cash)1 ($ in millions)................... | 1,633 | (279) |
Financial and Operating Results for the Second Quarter Ended June 30, 2023
Total revenues were
ZIM carried 860 thousand TEUs in the second quarter of 2023, compared to 856 thousand TEUs in the second quarter of 2022. The average freight rate per TEU was
Operating loss (EBIT) for the second quarter of 2023 was
Net loss for the second quarter of 2023 was
Adjusted EBITDA was
Net cash generated from operating activities was
Financial and Operating Results for the Six Months Ended June 30, 2023
Total revenues were
ZIM carried 1,629 thousand TEUs in the first half of 2023, compared to 1,715 thousand TEUs in the first half of 2022. The average freight rate per TEU was
Operating loss (EBIT) for the first half of 2023 was
Net loss for the first half 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 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
As previously announced on July 12, 2023, the Company expects to generate Adjusted EBITDA of between
Dividend Policy and Second Quarter 2023 Dividend
ZIM's dividend policy remains unchanged, according to which the Company intends to distribute 30
In accordance with its dividend policy and in light of the net loss recorded in the second quarter of 2023, the Company will not distribute a dividend to shareholders on account of its second quarter results.
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 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
(
Jun-30 | Dec-31 | ||
2023 | 2022 | 2022 | |
(Unaudited) | (Unaudited) | (Audited) | |
Assets | |||
Vessels | 5,005.4 | 4,405.3 | 4,409.9 |
Containers and handling equipment | 1,209.8 | 1,281.4 | 1,242.8 |
Other tangible assets | 124.3 | 77.7 | 98.5 |
Intangible assets | 98.1 | 79.4 | 92.9 |
Investments in associates | 29.3 | 17.8 | 22.0 |
Other investments | 1,354.2 | 651.0 | 1,373.2 |
Other receivables | 111.6 | 109.5 | 112.1 |
Deferred tax assets | 2.5 | 2.3 | 2.3 |
Total non-current assets | 7,935.2 | 6,624.4 | 7,353.7 |
Inventories | 174.1 | 216.2 | 190.7 |
Trade and other receivables | 671.0 | 1,346.2 | 825.7 |
Other investments | 863.0 | 2,358.9 | 2,233.1 |
Cash and cash equivalents | 1,040.3 | 946.8 | 1,022.1 |
Total current assets | 2,748.4 | 4,868.1 | 4,271.6 |
Total assets | 10,683.6 | 11,492.5 | 11,625.3 |
Equity | |||
Share capital and reserves | 1,994.8 | 2,010.6 | 1,987.7 |
Retained earnings | 2,858.3 | 3,231.4 | 3,901.9 |
Equity attributable to owners of the Company | 4,853.1 | 5,242.0 | 5,889.6 |
Non-controlling interests | 2.0 | 6.2 | 6.3 |
Total equity | 4,855.1 | 5,248.2 | 5,895.9 |
Liabilities | |||
Lease liabilities | 3,230.4 | 2,929.0 | 2,778.7 |
Loans and other liabilities | 83.0 | 164.8 | 91.9 |
Employee benefits | 42.4 | 50.0 | 45.2 |
Deferred tax liabilities | 79.0 | 133.8 | 151.4 |
Total non-current liabilities | 3,434.8 | 3,277.6 | 3,067.2 |
Trade and other payables | 561.8 | 901.3 | 896.2 |
Provisions | 53.4 | 30.8 | 50.2 |
Contract liabilities | 208.4 | 577.5 | 238.9 |
Lease liabilities | 1,522.1 | 1,377.2 | 1,380.8 |
Loans and other liabilities | 48.0 | 79.9 | 96.1 |
Total current liabilities | 2,393.7 | 2,966.7 | 2,662.2 |
Total liabilities | 5,828.5 | 6,244.3 | 5,729.4 |
Total equity and liabilities | 10,683.6 | 11,492.5 | 11,625.3 |
CONSOLIDATED INCOME STATEMENTS
(
Six Months Ended | Three Months Ended | Year Ended | |||
2023 | 2022 | 2023 | 2022 | 2022 | |
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Audited) | |
Income from voyages and related services | 2,683.9 | 7,145.2 | 1,309.6 | 3,428.8 | 12,561.6 |
Cost of voyages and related services | |||||
Operating expenses and cost of services | (1,913.6) | (2,380.6) | (973.9) | (1,262.3) | (4,764.5) |
Depreciation | (795.4) | (616.0) | (414.9) | (331.6) | (1,370.3) |
Gross profit (loss) | (25.1) | 4,148.6 | (79.2) | 1,834.9 | 6,426.8 |
Other operating income | 1.9 | 19.3 | (8.2) | 14.7 | 48.9 |
Other operating expenses | (10.1) | (0.2) | (6.5) | (0.1) | (0.9) |
General and administrative expenses | (145.5) | (162.0) | (71.4) | (84.9) | (338.3) |
Share of profit (loss) of associates | (2.9) | 1.1 | (2.5) | (0.3) | (0.7) |
Results from operating activities | (181.7) | 4,006.8 | (167.8) | 1,764.3 | 6,135.8 |
Finance income | 82.1 | 47.4 | 37.7 | 26.0 | 130.9 |
Finance expenses | (237.2) | (99.2) | (142.0) | (53.9) | (239.4) |
Net finance expenses | (155.1) | (51.8) | (104.3) | (27.9) | (108.5) |
Profit (loss) before income taxes | (336.8) | 3,955.0 | (272.1) | 1,736.4 | 6,027.3 |
Income taxes | 66.0 | (908.2) | 59.4 | (400.6) | (1,398.3) |
Profit (loss) for the period | (270.8) | 3,046.8 | (212.7) | 1,335.8 | 4,629.0 |
Attributable to: | |||||
Owners of the Company | (274.6) | 3,041.9 | (215.1) | 1,333.1 | 4,619.4 |
Non-controlling interests | 3.8 | 4.9 | 2.4 | 2.7 | 9.6 |
Profit (loss) for the period | (270.8) | 3,046.8 | (212.7) | 1,335.8 | 4,629.0 |
Earnings (loss) per share (US$) | |||||
Basic earnings (loss) per 1 ordinary share | (2.29) | 25.36 | (1.79) | 11.11 | 38.49 |
Diluted earnings (loss) per 1 ordinary share | (2.29) | 25.26 | (1.79) | 11.07 | 38.35 |
Weighted average number of shares for earnings (loss) per share calculation: | |||||
Basic | 120,182,399 | 119,950,718 | 120,195,365 | 119,990,308 | 120,012,375 |
Diluted | 120,182,399 | 120,441,961 | 120,195,365 | 120,442,213 | 120,444,889 |
CONSOLIDATED STATEMENTS OF CASH FLOWS
(
Six Months Ended | Three Months Ended | Year Ended | |||
2023 | 2022 | 2023 | 2022 | 2022 | |
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (audited) | |
Cash flows from operating activities | |||||
Profit (loss) for the period | (270.8) | 3,046.8 | (212.7) | 1,335.8 | 4,629.0 |
Adjustments for: | |||||
Depreciation and amortization | 808.7 | 627.5 | 421.5 | 337.3 | 1,396.3 |
Net finance expenses | 155.1 | 51.8 | 104.3 | 27.9 | 108.5 |
Share of profits and change in fair value of investees | 2.2 | (3.7) | 1.8 | (2.2) | (2.1) |
Capital loss (gain), net | 7.4 | (15.8) | 17.2 | (11.8) | (42.7) |
Income taxes | (66.0) | 908.2 | (59.4) | 400.6 | 1,398.3 |
Other non-cash items | 9.7 | 10.0 | 3.4 | 7.5 | 39.7 |
646.3 | 4,624.8 | 276.1 | 2,095.1 | 7,527.0 | |
Change in inventories | 16.6 | (97.2) | 15.0 | (42.4) | (71.7) |
Change in trade and other receivables | 176.9 | (61.8) | 33.7 | 34.5 | 496.6 |
Change in trade and other payables including contract liabilities | (95.9) | 30.9 | (4.2) | (5.1) | (325.7) |
Change in provisions and employee benefits | 2.9 | (2.2) | 1.5 | (0.1) | 15.9 |
100.5 | (130.3) | 46.0 | (13.1) | 115.1 | |
Dividends received | 1.5 | 1.4 | 0.9 | ||
Interest received | 88.0 | 7.4 | 38.5 | 4.2 | 53.2 |
Income taxes paid | (316.1) | (1,132.0) | (15.4) | (376.3) | (1,586.1) |
Net cash generated from operating activities | 520.2 | 3,369.9 | 346.6 | 1,709.9 | 6,110.1 |
Cash flows from investing activities | |||||
Proceeds from sale of tangible assets, intangible assets, and interest in investees | 17.7 | 16.9 | 5.5 | 11.6 | 48.1 |
Acquisition and capitalized expenditures of tangible assets, intangible assets and interest in investees | (61.5) | (263.1) | (25.6) | (80.6) | (345.5) |
Acquisition of investment instruments, net | (583.4) | (515.9) | (422.3) | (333.0) | (1,433.1) |
Loans granted to investees | (1.7) | 0.0 | |||
Change in other receivables | (14.0) | (2.6) | (5.8) | (2.3) | (20.2) |
Change in other investments (mainly deposits), net | 1,982.7 | (189.1) | 581.8 | (288.9) | 105.7 |
Net cash generated from (used in) investing activities | 1,339.8 | (953.8) | 133.6 | (693.2) | (1,645.0) |
Cash flows from financing activities | |||||
Receipt of long-term loans and other long-term liabilities | 59.2 | 59.2 | |||
Repayment of lease liabilities and borrowings | (861.4) | (532.5) | (466.4) | (323.6) | (1,449.4) |
Change in short term loans | (21.0) | (53.5) | (33.5) | (53.5) | |
Dividend paid to non-controlling interests | (7.5) | (4.6) | (0.6) | (0.1) | (8.4) |
Dividend paid to owners of the Company | (769.2) | (2,378.6) | (769.2) | (2,378.6) | (3,303.3) |
Interest paid | (182.7) | (94.7) | (95.9) | (54.2) | (221.0) |
Net cash used in financing activities | (1,841.8) | (3,004.7) | (1,332.1) | (2,790.0) | (4,976.4) |
Net change in cash and cash equivalents | 18.2 | (588.6) | (851.9) | (1,773.3) | (511.3) |
Cash and cash equivalents at beginning of the period | 1,022.1 | 1,543.3 | 1,892.6 | 2,727.2 | 1,543.3 |
Effect of exchange rate fluctuation on cash held | 0.0 | (7.9) | (0.4) | (7.1) | (9.9) |
Cash and cash equivalents at the end of the period | 1,040.3 | 946.8 | 1,040.3 | 946.8 | 1,022.1 |
RECONCILIATION OF NET INCOME TO ADJUSTED EBIT | ||||
( | ||||
Six months ended | Three months ended | |||
2023 | 2022 | 2023 | 2022 | |
Net income (loss) | (271) | 3,047 | (213) | 1,336 |
Financial expenses, net | 155 | 52 | 104 | 28 |
Income taxes | (66) | 908 | (59) | 400 |
Operating income (EBIT) | (182) | 4,007 | (168) | 1,764 |
Non-cash charter hire expenses | 1 | 0 | 0 | 0 |
Capital loss (gain), beyond the ordinary course | 21 | (1) | 21 | 0 |
Adjusted EBIT | (160) | 4,006 | (147) | 1,764 |
Adjusted EBIT margin | (6) % | 56 % | (11) % | 51 % |
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA | ||||
( | ||||
Six months ended | Three months ended | |||
2023 | 2022 | 2023 | 2022 | |
Net income (loss) | (271) | 3,047 | (213) | 1,336 |
Financial expenses, net | 155 | 52 | 104 | 28 |
Income taxes | (66) | 908 | (59) | 400 |
Depreciation and amortization | 809 | 627 | 422 | 337 |
EBITDA | 627 | 4,634 | 254 | 2,101 |
Capital loss, beyond the ordinary course of business | 21 | 0 | 21 | 0 |
Adjusted EBITDA | 648 | 4,634 | 275 | 2,101 |
Adjusted EBITDA margin | 24 % | 65 % | 21 % | 61 % |
RECONCILIATION OF NET CASH GENERATED FROM OPERATING ACTIVITIES TO FREE CASH FLOW | ||||
( | ||||
Six months ended | Three months ended | |||
2023 | 2022 | 2023 | 2022 | |
Net cash generated from operating activities | 520 | 3,370 | 347 | 1,710 |
Capital expenditures, net | (57) | (248) | (26) | (71) |
Free cash flow | 463 | 3,122 | 321 | 1,639 |
1 See disclosure regarding "Use of Non-IFRS Financial Measures."
2 The number of shares used to calculate the diluted earnings per share is 120,195,365. The number of outstanding shares as of June 30, 2023 was 120,218,275.
3 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."
4 On April 4, 2023, the Company distributed a dividend to shareholders of
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SOURCE Zim Integrated Shipping Services Ltd.
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