ZIM reports financial results for the second quarter of 2023
Reported revenues of $1.3 billion, net loss of $213 million, adjusted EBITDA of $275 million and adjusted EBIT loss of $147 million
ZIM Integrated Shipping Services Ltd. (ZIM), a global container liner shipping company, announced August 16 its consolidated results for the three and six months ended June 30, 2023.
Total revenues were $1.31 billion for the second quarter of 2023, compared to $3.43 billion for the second quarter of 2022.
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 $1,193 for the second quarter of 2023, compared to $3,596 for the second quarter of 2022.
Operating loss (EBIT) for the second quarter of 2023 was $168 million, compared to operating income of $1,764 million for the second quarter of 2022, resulting mainly from the decrease in freight rates.
Net loss for the second quarter of 2023 was $213 million, compared to net income of $1,336 million for the second quarter of 2022. The expected redelivery of certain vessels sold and leased back by the Company in 2018 negatively impacted net loss by a non-cash after tax amount of $51 million.
Adjusted EBITDA was $275 million for the second quarter of 2023, compared to $2,101 million for the second quarter of 2022. Adjusted EBIT loss was $147 million for the second quarter of 2023, compared to Adjusted EBIT of $1,764 million for the second quarter of 2022. Adjusted EBITDA and Adjusted EBIT margins for the second quarter of 2023 were 21% and -11%, respectively. This compares to 61% and 51% for the second quarter of 2022, respectively.
Net cash generated from operating activities was $347 million for the second quarter of 2023, compared to $1,710 million for the second quarter of 2022.
Financial and Operating Results for the Six Months Ended June 30, 2023
Total revenues were $2.68 billion for the first half of 2023, compared to $7.15 billion for the first half of 2022, primarily driven by the decrease in freight rates.
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 $1,286 for the first half of 2023, compared to $3,722 for the first half of 2022.
Operating loss (EBIT) for the first half of 2023 was $182 million, compared to operating income of $4,007 million for the first half of 2022. The decrease in operating income for the first half of 2023 was primarily driven by the above-mentioned decrease in revenues.
Net loss for the first half of 2023 was $271 million, compared to net income of $3,047 million for the first half of 2022. The expected redelivery of certain vessels sold and leased back by the Company in 2018 negatively impacted second quarter net loss by a non-cash after tax amount of $51 million.
Adjusted EBITDA was $648 million for the first half of 2023, compared to $4,634 million for the first half of 2022. Adjusted EBIT loss was $160 million for the first half of 2023, compared to $4,006 million for the first half of 2022. Adjusted EBITDA and Adjusted EBIT margins for the first half of 2023 were 24% and -6%, respectively. This compares to 65% and 56% for the first half of 2022.
Net cash generated from operating activities was $520 million for the first half of 2023, compared to $3,370 million for the first half of 2022.
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 $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. As we overhaul our fleet profile and advance ESG objectives, for both ZIM and customers, we remain confident in the Company's strategic positioning to drive profitable growth over the long term."
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 $1.2 billion to $1.6 billion and Adjusted EBIT loss of $500 million to $100 million in 2023. Moving ahead, we are committed to leveraging digital initiatives, enhancing our commercial and operational resilience, and further implementing our differentiated strategy to best serve our customers and generate sustainable value for shareholders."