ZIM Slides into Loss in Second Quarter as Container Shipping Rates Plummet
Israeli shipping line ZIM reported a net loss of $213 million in the second quarter of 2023, a steep decline from the $1.34 billion profit in the same period last year. The losses reflect the dramatic downturn in the container shipping market in 2023.
ZIM's revenues plunged 62% to $1.31 billion in the second quarter, compared to Q2 2022. This drop was driven by a 67% year-over-year decline in the average freight rate per TEU (twenty-foot equivalent unit) earned by ZIM, which fell to $1,193. With around half of its business exposed to volatile spot rates, ZIM has been hit hard by falling container prices.
For the first half of 2023, ZIM booked a net loss of $271 million, compared to a $3.05 billion net profit in the first half of 2022. While larger carriers like Maersk and Hapag-Lloyd remain profitable, niche players like ZIM have struggled to stay in positive territory amid the downturn.
ZIM President and CEO Eli Glickman acknowledged the near-term challenges but noted the company's strong balance sheet and $3.2 billion cash position. He said this financial buffer will allow ZIM to maintain a long-term view during an extended period of market weakness.
Looking ahead, Glickman expects full-year 2023 adjusted EBITDA between $1.2-$1.6 billion and adjusted EBIT loss of $500-$100 million. He cited expectations of a soft peak season and subdued demand for the rest of 2023.
ZIM has an extensive fleet expansion program of 38 newbuilds underway, including 28 LNG-powered ships. But the slump in rates has dimmed the profits from this growth, pushing ZIM into the red in the first half of 2023.
