“After the IPO, I said that in the past, Idan Ofer was the only one who believed inZim And did not let her go bankrupt. “Today I can say that even the era of Ofer does not believe in Zim’s results,” he said Eli Glickman, CEO of the marine transportation company Zim, after the company published particularly strong reports for the third quarter of the year, the amount of which is not mentioned by an Israeli company, against the background of the continuing tide in the shipping business due to excess demand for containers.

ZIM’s net profit for shareholders amounted to $ 1.46 billion in the quarter, compared to a profit of only $ 144 million in the corresponding quarter and a profit of $ 886 million attributed to shareholders in the previous quarter. Since the beginning of the year (January-September), Zim’s profit has been almost $ 3 billion.

Idan Ofer / Photo: Sivan Farage

Glickman hung on tall trees talking about profit: “Tesla Recorded a profit of $ 1.6 billion in the quarter, ZIM – close to $ 1.5 billion. Tesla is worth $ 1 trillion, and Zim is traded at $ 5-6 billion. “Make the calculation of where Zim can grow,” he says.

Are these profits and market power something sustainable?
“I am very careful about the future, and can not share too much. Our forecast in the foreseeable future is that the results will be strong, because the market is strong. I can not be specific, but when asked how it happens “I say that Zim is a smart player in the global market, which operates the smartest digital tools among shipping companies and exploits the market to develop growth engines.”

ZIM results beat analysts’ forecasts for revenue of $ 2.77 billion for the quarter and net income of $ 9.25 per share. The company posted revenue of over $ 3.1 billion and net income of $ 12.16 per share. In light of the strong results, Zim’s share soared in pre-trade and it now reflects a value of about $ 6 billion for the company. The main shareholder in Zim is a company canon Of Idan Ofer, which holds about 28% of the capital.

 

With the record results that made ZIM the most profitable company in Israel today, it’s a little hard to remember that only a few years ago the company needed two huge debt arrangements to continue surviving due to a crisis in its business: in 2009 it redeployed $ 7 billion, and in 2014 it made a haircut. Of about 50% to a debt of $ 3.4 billion, its share to the company’s bondholders in Tel Aviv.

The freight rate jumped by 174%

Zim’s revenue for the quarter more than tripled compared to the same quarter last year, and in the first three quarters of the year revenue amounted to $ 7.26 billion, up from $ 2.6 billion in the same period in 2020. Net income attributable to shareholders has accumulated since the beginning of the year to about $ 2.94 billion, compared to $ 153 million in the corresponding period.

EBITDA (profit excluding interest, tax, depreciation and amortization) amounted to $ 4.2 billion since the beginning of 2021. Zim generated almost $ 4 billion from current operations since the beginning of the year, of which $ 2 billion in the third quarter alone, compared to $ 881 million each year 2020.

The volume of containers that Zim transferred in the third quarter (TEU) amounted to 884,000, compared with 762,000 in the corresponding quarter. At the same time, the average freight rate rose by 174% to $ 3,226 – compared to $ 1,176 in the same quarter last year. Since the beginning of the year, the average rate has been $ 2,510, an increase of more than twice as much as in the same period in 2020.

Raising a third forecast since the IPO

ZIM was first listed on the New York Stock Exchange at the end of January at a price of $ 15 per share, and on the first trading day it lost almost a quarter of its value, but has since recovered and soared to a high of over $ 60 in September. It then weakened and is currently trading at $ 50 levels (234% yield).

ZIM again raises its annual forecast and expects adjusted EBITDA of $ 6.2-6.4 billion and EBIT of $ 5.4-5.6 billion, compared to the forecast given in the previous quarter and had EBITDA of $ 4.8-5.2 billion.

“This is the third time we have raised forecasts since the IPO,” Glickman notes. “Every quarter we give a stronger forecast alongside record results.”

Maybe the market surprises you too?
“We are taking advantage of the development of our digital engines and the market situation. The shipping market is definitely strong. There is a supply chain disorder due to pressures and bottlenecks, especially in US ports, specifically on the West Coast and more specifically in Los Angeles, due to congestion of ships. Currently, 86 ships are waiting to enter ports in Los Angeles, and the average waiting time is 25-30 days. What this causes is a shortage of ships and a shortage of containers that do not return to Asia, and the supply chain is unorganized. “It creates an effect of pressure on other lines, including Israel, by the way, and it creates a pressure component that creates excess demand and leads to prices that we do not know.”

The delays you talked about in the US not affecting you?
“We are there with fast services that are part of our growth, dedicated e-commerce services that guarantee customers service relatively quickly, that’s one of our advantages. From the pressures, we also have delays that were not there before. “

Will this be reflected in the fourth quarter reports?
“No, it’s not substantial, and I expect that in two or three weeks we will be able to fix it.”

ZIM will distribute a dividend of $ 2.5 per share, which is $ 296 million (about 20% of quarterly earnings) on December 27th. The main beneficiary of the dividend is Canon of Idan Ofer, which holds about 28% of the company’s shares. Glickman notes in the context of the dividend that “the company raised $ 204 million net in the IPO just 10 months ago. Since then we have returned over $ 234 million in dividends and today we announced another dividend of almost $ 300 million. “It is stated today that from now on a quarterly dividend of 20% of the quarter will be distributed, and in the fourth quarter 30% -50% of the annual profit will be distributed. There are not many companies with such a dividend yield.”

By Editor

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