ZIM Stock Surges on Earnings Beat, Upgraded Guidance

Israeli container shipping company ZIM Integrated Shipping Services Ltd. (NYSE: ZIM) announced its consolidated results for the three and six months ended June 30, 2024.

The company reported earnings per share of $3.08, significantly exceeding analysts’ estimates of $1.79, which led to a more than 20% surge in its stock price on Monday morning.

ZIM has been one of the most closely watched stocks throughout the Red Sea crisis.

The company’s total revenues for Q2 2024 were $1.93 billion, up from $1.31 billion in Q2 2023, driven mainly by higher freight rates and increased volumes. ZIM transported 952,000 TEUs in Q2 2024, compared to 860,000 TEUs in Q2 2023, with the average freight rate per TEU rising to $1,674 from $1,193.

“We are pleased with our strong second quarter performance, highlighted by outstanding strategic execution that led to record high carried volume, representing 11% growth year-over-year. The steps we have taken to upscale our capacity and enhance our cost structure continued to drive strong financial results,” said Eli Glickman, ZIM President & CEO.

Glickman added that ZIM’s strategic increase in spot market exposure in the Transpacific trade has allowed the company to benefit from sustained high rates.

ZIM reported an operating income of $468 million for Q2 2024, a significant improvement from a $168 million loss in Q2 2023, primarily due to increased revenues. Net income for Q2 2024 was $373 million, compared to a net loss of $213 million in the same period last year.

ZIM’s Adjusted EBITDA for Q2 2024 was $766 million, a significant increase from $275 million in Q2 2023. Adjusted EBIT improved to $488 million from a loss of $147 million the previous year. The margins for Adjusted EBITDA and Adjusted EBIT in Q2 2024 were 40% and 25%, respectively, compared to 21% and -11% in Q2 2023. Net cash generated from operating activities rose to $777 million from $347 million in Q2 2023.

For the first half of 2024, ZIM’s total revenues increased to $3.49 billion, driven by higher freight rates and carried volume. The company carried 1,799 thousand TEUs with an average freight rate of $1,569 per TEU. Operating income rose to $635 million, and net income reached $465 million, both significant improvements from the previous year’s losses. Adjusted EBITDA and EBIT margins improved to 34% and 19%, respectively, and net cash from operating activities more than doubled to $1,103 million.

ZIM’s total cash position decreased by $351 million from $2.69 billion at the end of 2023 to $2.34 billion by mid-2024. Capital expenditures rose to $66 million in Q2 2024 from $26 million in Q2 2023. Net debt increased by $936 million to $3.25 billion as of June 30, 2024, with a net leverage ratio of 2.0x, down from 2.2x at the end of 2023.

ZIM’s Board of Directors has declared a cash dividend of approximately $112 million, or $0.93 per ordinary share, reflecting about 30% of Q2 2024 net income. The dividend will be paid on September 5, 2024, to holders of ZIM ordinary shares as of August 29, 2024. Future dividends will be subject to the discretion of the Board and Israeli law.

ZIM has also updated its full-year 2024 guidance, now expecting Adjusted EBITDA between $2.6 billion and $3.0 billion and Adjusted EBIT between $1.45 billion and $1.85 billion, significantly higher than its previous estimates $1.15-$1.55 billion and $0-$400 million, respectively.

“We expect our results in the second half of 2024 to be better than in the first half of the year, driven by continued supply pressure from the Red Sea crisis, combined with current favorable demand trends,” said Glickman.

Unlock Exclusive Insights Today!

Join the gCaptain Club for curated content, insider opinions, and vibrant community discussions.

Sign Up