ZIM Integrated Shipping Services Ltd. (NYSE: ZIM), which has been reporting extremely high profits in the past few years, due to the boom in shipping prices, and even record the biggest-ever profit by an Israeli company, has slipped to a loss. In the first quarter of 2023, ZIM reported revenue of $1.37 billion and a net loss of $58 million ($0.50) per share.
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ZIM’s results were below the analysts’ consensus. They had predicted revenue of $1.57 billion and earnings per share of $0.
ZIM’s recent fortunes began to turn towards the end of 2022 when shipping prices began to fall sharply, after soaring to record heights in recent years. Shipping prices have been hit by changing macroeconomic conditions including rising interest rates and an economic slowdown in many countries worldwide.
ZIM’s share price is down 2% in premarket trading on Wall Street. Zim’s share price has lost half of its value over the past year (adjusted to dividends paid out by the company) and its market cap is currently $2.1 billion.
This is the first quarterly loss reported by ZIM since its IPO at the beginning of 2021.
ZIM President & CEO Eli Glickman said, “Following a record year of adjusted EBITDA and EBIT generation, ZIM’s first quarter results reflected the significant decline in freight rates and weak demand, particularly in the Transpacific trade, that began last year. While the near-term outlook for container shipping remains challenging, the proactive steps we took during the preceding highly lucrative market period better position us now to meet these challenges and we believe our differentiated strategy will ultimately deliver sustainable value for shareholders over the long term.”
He added, “We continue to anticipate positive EBIT in 2023 despite macro and industry headwinds. Our expectation is for recovery in demand with inventory restocking to begin in the second half of this year, resulting in an improvement in freight rates. As such, for 2023, we have re-affirmed the guidance we shared earlier in the year of Adjusted EBITDA of between $1.8 billion and $2.2 billion and Adjusted EBIT of between $100 million and $500 million.”
Published by Globes, Israel business news – en.globes.co.il – on May 22, 2023.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.
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