ZIM Q2 net loss at $213mn, revenue drops 62%

NYSE-listed ZIM Integrated Shipping Services (ZIM) reported a loss of $213 million for the second quarter of 2023 compared to a profit of $1.3 billion in Q22022 on 67 percent decline in average freight rate.

While revenue declined 62 percent to $1.3 billion from $3.4 billion in Q22022, carried volume was marginally higher at 860,000 TEUs. Average freight rate was $1,193/TEU as against $3,596/TEU in the second quarter of last year, says an official release.

"Adjusted EBITDA for the second quarter was $275 million, a year-over-year decrease of 87 percent, and operating loss (EBIT) for the second quarter was $168 million compared to operating income of $1.8 billion in the second quarter of 2022."

Eli Glickman, President & CEO, ZIM says: "We continue to take proactive steps to respond to current market realities with a focus on minimising costs while optimising our commercial strategy. We have taken action to rationalise 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."

"Although our second quarter results reflected continued near-term challenges in the container shipping market, our total cash position of $3.2 billion at quarter's end remains strong. We believe our ample liquidity and solid balance sheet will enable ZIM to operate from a position of strength and maintain a long-term view even during a prolonged period of market weakness.

"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 $1.2 billion to $1.6 billion and adjusted EBIT loss of $500 million to $100 million in 2023."

The guidance reflects continued weakness in freight rates across trades, particularly in the Transpacific, which ZIM expects to continue during the second half of 2023, the release added. Volume growth is also expected to be lower than originally forecast as demand continues to be subdued.

H12023 revenue down 62%
Total revenue was down 62 percent to $2.7 billion for the first half of 2023 compared to $7.1 billion for the first half of 2022, "primarily driven by the decrease in freight rates."

ZIM carried 1.6 million TEUs in the first half of 2023 compared to 1.7 million TEUs in the first half of 2022. The average freight rate per TEU was $1,286 for the first half of 2023 compared to $3,722 for the first half of 2022, a decline of 65 percent.

Net loss for the first half of 2023 was $271 million compared to a net income of $3 billion for the first half of 2022.

ZIM's total cash position (including cash and cash equivalents and investments in bank deposits and other investment instruments) declined by $1.4 billion from $4.6 billion as of December 31, 2022 to $3.2 billion as of June 30, 2023, the release added.