US-listed Israeli shipping line ZIM Navigation posts the lowest profit since Q2 2021 after both container movements and average freight rates per teu fell for the containerized carrier, Alphaliner reveals.
In results reported last week, ZIM showed quarterly earnings before interest and taxes (EBIT) of $1.76 billion on revenue of $3.42 billion. This was down from $2.24 billion and $3.71 billion in the January-March period. Only Taiwan’s Wan Hai Lines posted a larger quarter-on-quarter drop in operating profit among major carriers.
Meanwhile, both EBIT and net profit for the period were ZIM’s lowest since the second quarter of 2021.
ZIM saw a sharp drop in average freight rates in the quarter, to USD 3,596 per teu from USD 3,848 per teu in the first quarter. The line currently operates at 50% capacity on the Transpacific, where rate drops have been most severe.
In terms of volumes, lifts or movements were down 7% from a year ago and marginally, less than 1%, from the first quarter of the year. The carrier still expects volumes to grow 2-3% throughout the year based on reduced congestion and increased carrying capacity.
In its earnings release, ZIM emphasized the half-year result, which still represents the highest on record. Saying he expected freight rates to continue to fall, the carrier said he believed this normalization would be gradual, and as a result, maintains its 2022 guidance of $6.3-6.7 billion EBIT, Alphaliner reports. .
While this figure represents a potential 8-15% increase in 2021, it indicates a sharp drop in EBIT earnings in the second half of 2022, to a potential $2.3-$2.7 billion, compared to 4 billion dollars in the first half.
Finally, ZIM took the opportunity of the earnings release to announce a higher dividend policy. The line will increase its dividend from 20% to 30% of net income for the first three quarters of the year, increasing to a possible 50% of overall net income for the year, depending on fourth-quarter results.
Source: Alphaliner
