In the financial riptides of Q2, ZIM suffered a net loss of $213 million, significantly influenced by a non-cash after-tax item. This loss, totaling $51 million is directly linked to the redelivery of specific vessels. Compared to the encouraging operating income of $1,764 million in Q2 of the previous year, the company reported an opposing current with an operating loss of $168 million.
Year-over-year revenues for the same period dove 62% hurting the bottom line, ending at $1,310 million. The company did manage to keep their head above water with carried volume, recording a minor year-over-year increase, registering 860,000 TEU.
Navigating Stormy Market Waters
But it was a far from smooth sailing experience for freight rate per TEU. The freight rate plummeted 67%, dropping to $1,193. “We continue to adopt proactive measures to navigate the turbulent market conditions, prioritizing cost reduction whilst fine-tuning our commercial strategies,” stated Eli Glickman, ZIM’s President & CEO.
Glickman expressed confidence in ZIM’s long-term future, detailing the plan to “optimize our current capacity,” and fostering improvement in their cost structure to ride with the future delivery of their more fuel-efficient, newbuild tonnage, including 28 LNG-powered vessels.
The Calm After The Storm: Forecasting A Soft Peak
As ZIM sets its course towards a predicted soft peak season, it forecasts a full-year Adjusted EBITDA ranging from $1.2 billion to $1.6 billion, eyeing an Adjusted EBIT loss between $500 million to $100 million in 2023.
Cruising Through the First Half
A snapshot of the six months ending June 30, 2023, saw an unsettling course. The total revenues accounted for $2.68B due to a significant drop in freight rates. Compared to the healthy wave made with $7.15 billion in revenues for the first half of the prior year, the first half of 2023 was closer to a trough.
The company’s freight carrying capacity also narrowed, resulting in 1,629 thousand TEUs compared to 1,715 thousand TEUs carried in the first half of 2022. The average freight rate per TEU found itself deep in the sea at $1,286, a stark contrast to $3,722 calculated for the same period in 2022.
The operating loss for the first voyage of 2023 came in at $182 million, a chilly dip from the previous year’s operating profit of $4,007 million. A downturn was primarily driven by declining revenues. The net loss ended at $271 million in stark contrast to the previous year’s equivalent period, showcasing a net income of $3,047 million. The redelivery of several vessels as part of their sale and leaseback agreement in 2018 further pushed the quarter’s net loss deeper, bringing an aftershock of a non-cash after-tax amount of $51 million.
