ZIM Beats Estimates and Significantly Raises Full Year Guidance

Israeli liner company ZIM (NYSE: ZIM) on Wednesday reported second quarter net profit of $888 million, or $7.38 per diluted share, and significantly raised its full year guidance, sending its share price up over 5%.

Analysts expected earnings per share of just $5.22.

For comparison, ZIM reported net profit in the second quarter of 2020 of $25 million.

Adjusted EBITDA for the second quarter of 2021 was $1.34 billion, compared to $145 million in the second quarter of 2020, a year-over-year increase of 820%. Operating income came in at $1.16 billion for a year-over-year increase of 1,581%.

ZIM said its ships carried 921,000 TEUs in the second quarter of 2021, a year-over-year increase of 44%, generating $2.38 billion in revenues, up two-fold compared to the same period last year. The company said average freight rate per TEU increased 119% year-over-year to $2,341.

“We continue to execute at the highest level, resulting in another record quarter, including net income, EBITDA and operating cash flow, as well as significantly improved guidance for 2021,” Eli Glickman, ZIM President & CEO. “Driving our success, we have further leveraged digitalization initiatives and have drawn on our global-niche strategy to launch new lines to address profitable, underserved routes. This was instrumental in driving our all-time high results, as ZIM’s second quarter carried volume increased by 44% year-over-year, substantially higher than market growth.”

ZIM made it’s long-awaited initial public offering on the New York Stock Exchange back in January priced at $15.00 per ordinary share. Following today’s earnings announcement, shares of ZIM were up over 5% as of 11 a.m. EDT, to $47.91.

ZIM’s second quarter performance brings its first half 2021 adjusted EBITDA to 2.156 billion.

In anticipation of a strong second half, ZIM has now increased its full-year guidance and expects to generate in adjusted EBITDA of between $4.8 billion and $5.2 billion in FY2021 and adjusted EBIT of between $4.0 billion to $4.4 billion. This is a significant increase from its previous FY2021 guidance of $2.5 billion to $2.8 billion as of May 2021.

ZIM also declared a special cash dividend of approximately $238 million, or $2.00 per ordinary share, to be paid on September 15, 2021, to holders of the ordinary shares as of August 25, 2020, and reiterated plan to distribute annual dividend of 30-50% of 2021 net income in 2022.

“Looking ahead, based on our strong outlook and forward visibility, we are well positioned to return substantial capital to shareholders, with our expected 2022 dividend payout of 30%-50% of 2021 net income, on top of the $238 million, or $2.00 per share, special dividend payable in September 2021,” said Glickman. “Our outlook for the remainder of 2021 and into 2022 is very positive and we are excited about our strategy to further enhance our position as an innovative digital leader of seaborne transportation and logistics services.”

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