Haifa, May 23, 2024 – Israeli shipping company ZIM Integrated Shipping Services Ltd. has revised its earnings forecast for 2024, projecting earnings between zero and $400 million. This adjustment is based on the expectation that freight rates will remain robust due to ongoing geopolitical tensions in the Middle East, particularly the Red Sea crisis, which has disrupted traditional shipping routes and increased reliance on longer, more expensive routes around the Cape of Good Hope, according to Alphaliner.
The resulting longer ton-miles, combined with renewed cargo demand, have led to improved financial prospects for carriers. ZIM reported a significant increase in its container volumes, with liftings rising by 7.6% quarter-on-quarter to 846,000 twenty-foot equivalent units (TEUs) in the first quarter of 2024, driven by the operation of a larger fleet.
Notably, the company turned its losses from the last quarter of 2023 into profits in the first quarter of 2024. ZIM posted a net income of $92 million, as revenues surged by 30% quarter-on-quarter to $1.6 billion. The company also achieved an operating profit (EBIT) of $167 million, marking an operating margin of 10.7%, its best performance since the fourth quarter of 2022.
The Haifa-based carrier saw an 8% increase in the volume of containers lifted compared to the fourth quarter of 2023, and a 10% increase compared to the same period last year. The average freight rate climbed to $1,452 per TEU, a 32% rise from the previous quarter and a 4% increase year-on-year. Additionally, ZIM expanded its fleet capacity from 579,000 TEUs in the fourth quarter to 647,000 TEUs in the first quarter.
These developments indicate a positive trend for ZIM, as the company navigates through challenging market conditions and capitalizes on increased demand and freight rates.
Source: Alphaliner
