ZIM Integrated Shipping Services Ltd. (NYSE: ZIM), a prominent player in the global container liner shipping industry, has reported a strong financial performance for the first quarter of 2024, ending March 31. The company announced revenues of $1.56 billion, a notable 14% increase compared to the same period last year. This impressive revenue growth was primarily driven by increased freight rates and a higher carried volume, reflecting the company’s strategic transformation and market conditions.
Net income for the quarter stood at $92 million, a significant turnaround from the $58 million loss recorded in Q1 2023. This translates to a diluted earnings per share of $0.75, up from a diluted loss per share of $0.50 in the previous year. ZIM’s adjusted EBITDA also saw a 14% year-over-year increase, reaching $427 million, while the operating income (EBIT) was $167 million, a stark improvement from the $14 million loss in Q1 2023.
Eli Glickman, ZIM’s President and CEO, attributed these gains to the company’s strategic initiatives and the positive momentum in global freight rates. He highlighted the substantial improvements in ZIM’s fleet and cost structure, which have collectively contributed to the company’s profitability. “We are pleased with the current positive momentum in our business,” Glickman remarked. “Our solid first-quarter results illustrate the incremental benefits from our strategic transformation and the outstanding execution of the ZIM team worldwide.”
In light of the strong performance and favorable market conditions, ZIM has updated its full-year 2024 guidance. The company now projects an adjusted EBITDA range of $1.15 billion to $1.55 billion and an adjusted EBIT range of $0 to $400 million. This optimistic outlook is driven by expectations of sustained high freight rates due to ongoing supply pressures and increased demand.
The first quarter also saw ZIM carrying 846 thousand TEUs, a 10% increase from the previous year. The average freight rate per TEU rose by 4% to $1,452. Additionally, ZIM declared a dividend of $0.23 per share, amounting to $28 million, in line with its policy to distribute 30% of quarterly net income.
ZIM’s financial health remains robust, with net cash generated from operating activities reaching $326 million, compared to $174 million in Q1 2023. Despite an increase in net debt to $3.11 billion from $2.31 billion at the end of December 2023, the company’s net leverage ratio is manageable at 2.8x.
Glickman emphasized ZIM’s commitment to furthering its strategic goals, including the delivery of 46 new containerships, 28 of which are LNG-powered. “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,” he concluded.
