ZIM Integrated Shipping Services has enjoyed a strong first quarter, reversing results recorded in Q1 2023 and upgrading its full-year guidance for 2024. But net debt and net leverage ratio have increased.
Net income for the first quarter was US$92 million (compared to a net loss of $58 million in the first quarter of 2023), or a diluted earnings per share of $0.753 (compared to diluted loss per share of $0.50 in the first quarter of 2023).
Adjusted EBITDA for the first quarter was US$427 million, a year-on-year increase of 14%, while operating income (EBIT) for the first quarter was $167 million, compared to operating loss of $14 million in the first quarter of 2023. Reconciliation items between operating income and Adjusted EBIT in the first quarter of each year were negligible, ZIM said.
Revenues for the first quarter were US$1.56 billion, a year-on-year increase of 14%, earned on volume of 846,000 TEU, a year-over-year increase of 10%. Average freight rate per TEU in the first quarter was $1,452, a year-on-year increase of 4%.
Net debt1 of US$3.11 billion as of 31March 2024, compared to $2.31 billion as of 31December 2023; net leverage ratio1 of 2.8x at 31 March 2024, compared to 2.2x as of 31 December 2023.
Eli Glickman, ZIM President & CEO, said he was pleased with the current positive momentum in the business.
“ZIM’s solid first quarter results illustrate the incremental benefits from our strategic transformation and the outstanding execution of the ZIM team worldwide, as well as a significant improvement in global freight rates,” he said.
“Having taken important steps to revamp our fleet and enhance our cost structure, which exceeded our expectations, we delivered profitable growth in Q1 2024, as ZIM generated net income of US$92 million. Per our dividend policy, we declared a dividend of $0.23 per share, or $28 million, representing 30% of quarterly net income.
“Given the recent improved freight rate environment currently impacting more trades, we have increased our full year 2024 guidance and today forecast full year Adjusted EBITDA between US$1.15 billion and $1.55 billion and Adjusted EBIT between zero and $400 million.
“Looking ahead, we now expect freight rates to remain stronger for longer than initially anticipated due to a combination of continued pressure on supply and availability of equipment and a recent uptick in demand. While the rate environment during the latter part of 2024 remains unknown, we are confident in ZIM’s strategic positioning as an agile container shipping player with a competitive cost- and fuel-efficient, modern fleet.”
Mr. Glickman concluded, “We look forward to further implementing our differentiated strategy to create a best-in-class experience for customers and generate sustainable value for shareholders.
“By year’s end, we expect the delivery of the final 16 out of 46 newbuild containerships that we secured, which include 28 LNG-powered vessels. With a fleet optimally suited to the trades in which we operate, together with declining unit costs, we are well positioned to achieve our volume growth targets and deliver on our commitment to profitability over the long term.”
