Zim went into a loss following a drop in demand and a spike in energy prices

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In the first quarter, Zim transported 866,000 containers, and the average transportation price was $1,310 per container – a decrease of 8.3% in volume and 26.2% in price compared to the corresponding quarter last year. In total, revenues totaled approximately $1.4 billion, compared to $2 billion in the corresponding quarter.

The company went from a profit to a net loss of 86 million dollars, which is 71 cents per share. Adjusted EBITDA (earnings excluding interest, tax, depreciation and amortization) remained positive, but shrank compared to the corresponding quarter by 59.8% to $313 million. The free flow amounted to 235 million dollars, and the net debt at the end of the quarter was about 2.9 billion dollars, almost unchanged compared to the corresponding quarter last year.

“Weak freight rates and moderate demand”

Eli Glickman, president and CEO of Zim, who recently announced his intention to retire, said: “The results of the first quarter were, in general, in line with our expectations, and reflected an environment of weaker freight rates alongside more moderate demand.” He added that Zim continues to focus on service reliability and meticulous execution.

According to him, “The conflict in the Persian Gulf led to a sharp increase and significant volatility in fuel prices. While the impact on the first quarter’s results was limited, we expect a more substantial impact in the second quarter, before the actions we took to offset these costs, including raising freight rates and imposing dedicated levies to cover fuel costs, begin to take effect.

“It is also important to note that Zim is expected to benefit from the early adoption of LNG technology and the long-term agreements with Shell that guarantee the supply of LNG under competitive conditions. With a fleet in which approximately 40% of the capacity is powered by LNG, Zim offers its customers a way to significantly reduce carbon emissions, while at the same time operating a fuel-efficient and cost-efficient fleet.”

Optimism despite everything

Glickman also added that although market conditions continue to be challenging, “in recent weeks we have witnessed a significant increase in demand and a corresponding increase in freight rates, especially in the trans-Pacific trade. If this positive trend continues, it is expected to support the company’s financial results, especially during the second half of the year.”

Zim recently signed two-year contracts with customers, but left 65% of the trans-Pacific volume of activity exposed to spot prices, and according to Glickman, this approach supports commercial flexibility and acting nimbly according to changes in demand patterns.

Glickman also noted that “Zim’s strength begins with our people, and I would like to thank Zim’s excellent team for their dedication and work, especially during this challenging time. Thanks to the improved cost structure and modern fleet, we believe we have built a company that is well positioned to face short-term challenges and support long-term profitable growth.”

Zim is traded in New York at a value of approximately $3.1 billion, and its share price is 27% lower than the share price in the purchase deal.