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.

ZIM slumps sharply into the red in Q2

 

 


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