ZIM Integrated Shipping Services Ltd. (NYSE: ZIM) was until recently Israel's most profitable company. But the company ended the third quarter with revenue of $1.27 billion, below the analysts' expectations, and a huge net loss of $2.27 billion, compared with a net profit of $1.17 billion in the corresponding quarter of 2022. The third quarter of 2023 operating loss includes a non-cash impairment loss of $2.063 billion. Adjusted EBITDA was $211 million for the third quarter of 2023, down 89% from $1.934 billion in the third quarter of 2022.
ZIM also lowered its 2023 EBITDA forecast to $900 million - $1.1 billion from $1.2-1.6 billion. The company said that the latest forecast reflects the continued fall in freight rates and the weak demand that it sees.
In the first nine months of the year, ZIM recorded revenue of $4 billion compared with $10.4 billion in the corresponding quarter of 2022 and a net loss of $2.5 billion compared with a net profit of $4.2 billion in the first nine months of 2022. At the end of the third quarter, the company had a net debt of $1.6 billion.
ZIM president and CEO Eli Glickman said, "ZIM's third quarter results reflected the current operating environment, as demand remained weak and freight rates continued to deteriorate. Given our negative outlook for freight rates in the near future, we recorded a non-cash impairment loss of approximately $2.1 billion which negatively impacted our net results, as well as revised our full year guidance.
He added, "We are currently in a transition period, which we expect will extend into 2024, during which we should gradually see the benefits of the decisive actions we have taken to enhance ZIM's commercial and operational resilience. Foremost, we embarked on a fleet renewal program, which included 46 newbuild containerships of which 28 are "green" LNG vessels, and that along with the redelivery of older, more expensive and less efficient vessels, we expect will improve our cost structure and drive long-term profitable growth. Our cost per TEU is declining and we expect to further reduce our cost base, as our chartered newbuilds, including a total of 28 dual-fuel LNG containerships, are added to our fleet through 2023-2024."
Published by Globes, Israel business news - en.globes.co.il - on November 15, 2023.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.