- Q2 adjusted EBITDA drops 38% to $472M as freight rates and volumes decline, though costs hit their lowest since 2023.
- ZIM cuts its 2H25 volume outlook, citing softer freight trends and market uncertainties despite ongoing cost improvement efforts.
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ZIM Integrated Shipping Services Ltd. ZIM shares are trading lower on Thursday.
Yesterday, the company reported second-quarter results. Adjusted EBITDA for the second quarter was $472 million, a year-over-year decrease of 38%.
Jefferies analyst Omar Nokta maintains ZIM Integrated Shipping with a Hold rating and a price target of $17.
ZIM is feeling the pressure from bearish momentum. See the full breakdown here.
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Analyst Nokta said ZIM's earnings came in weaker than expected as the second quarter was tough to model amid freight rate volatility.
He noted freight rates and volumes fell year over year and quarter over quarter, but costs hit their lowest since 2023.
Nokta raised his third-quarter estimate slightly but warned the fourth quarter could be at risk if softer freight trends persist into September.
The analyst highlighted that freight rates have been weakening for several weeks, and ZIM lowered its volume outlook for the second half of 2025, signaling an improvement from the second quarter but still a year-over-year decline.
The analyst added that uncertainties persist, with counter-seasonal rate softness, questions about underlying demand, an expanding vessel orderbook and the ongoing risks tied to the Red Sea situation.
Nokta noted a key positive in second quarter was ZIM's lower costs, with management expecting further improvements ahead.
The analyst pointed out that 34 ships will roll off charter by 2026, which could be returned or extended at cheaper rates to cut expenses.
All-in costs, including leases, fell to $1,845/teu in the second quarter from $1,930/teu in the first quarter and a 2024 average of $1,970/teu.
While costs remain relatively high, Nokta sees them improving further to $1,750/teu in 2026 and $1,650/teu in 2027.
ZIM Price Action: ZIM shares are trading lower by 4.53% to $14.64 at publication on Thursday.
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