ZIM Q2 net profit up 50% at $1.3bn on higher freight rates

NYSE-listed Israeli carrier ZIM Integrated Shipping Services Ltd reported a 50 percent increase in net profit at $1.34 billion for the second quarter of 2022 compared to $888 million in Q22021.

Revenues for the second quarter increased 44 percent to $3.43 billion, volume dropped 7 percent to 856,000 TEUs and average freight rate increased 54 percent to $3,596/TEU, according to an official statement.

"Adjusted EBITDA for the second quarter was $2.10 billion, a year-over-year increase of 57 percent and operating income (EBIT) was $1.76 billion, a year-over-year increase of 52 percent."

Net cash generated from operating activities was $1.71 billion for the second quarter of 2022 compared to $1.18 billion for the second quarter of 2021, the statement said.

"We reported today strong Q2 results, including net profit of $1.34 billion, as well as our best ever first half-year results with standout margins, among the highest of our liner peers," says Eli Glickman, President & CEO, ZIM. "Due to our conviction in ZIM's ability to earn sustainable long-term profits, we are increasing our quarterly dividend payout from 20 percent to 30 percent of quarterly net income, allowing shareholders to benefit from our strong results even more directly on a quarterly basis. Importantly, at the same time, we maintain our dividend policy, according to which shareholders may receive up to 50 percent of annual earnings.

"Over the past several weeks, we have seen a gradual decline in freight rates, including in the transpacific trades despite continued port congestion and resilient demand, driven by macroeconomic and geopolitical uncertainties. The dynamic nature of our industry illustrates the importance of staying focused on ZIM's core strategy and key strengths. Our global niche approach is centred on successfully identifying attractive growth opportunities and adjusting our fleet size dependent on changing market conditions. A prime example of this has been the growth in our car carriage activities, growing from one vessel operated two years ago to 10 car carriers operated today. We believe that this approach will continue to serve us well as the market is expected to normalise from peak levels.

"Despite the backdrop of various challenges, based on our strong performance in the year to date coupled with spot and contract rates that remain highly profitable, we are reaffirming our 2022 guidance, which would mark another year of record earnings and profitability."

While carried volume for H12022 was marginally lower at 1.7 million, average freight rate increased 73 percent to $3,722/TEU. Net income more than doubled to $3 billion on revenue increase of 73 percent to $7.1 billion.

ZIM reaffirmed its guidance for the full-year 2022, and expects to generate adjusted EBITDA of between $7.8 billion and $8.2 billion and adjusted EBIT of between $6.3 billion and $6.7 billion, the statement added.