ZIM Integrated Shipping Services Stock Slips Post Q1 Results

  • ZIM Integrated Shipping Services Ltd ZIM reported first-quarter sales growth of 113.1% year-over-year to $3.72 billion, beating the consensus of $3.47 billion.
  • Carried volume in the first quarter was 859 thousand TEUs (+5% Y/Y). The first quarter's average freight rate per TEU was $3,848 (+100% Y/Y).
  • The gross margin expanded by 2,008 bps to 62.3%. The operating income increased to $2.24 billion (+228.1% Y/Y), and the margin expanded to 60.3%, up by 2,116 bps.
  • EPS was $14.19, above the consensus of $12.53.
  • Net cash generated from operating activities was $1.66 billion, compared to $777 million in 1Q21.
  • Dividend: ZIM declared a cash dividend of ~$342 million, or $2.85 per ordinary share, payable on June 8, 2022, to holders of ZIM ordinary shares as of May 31, 2022.
  • ZIM's total cash position was at $5.11 billion at March 31, 2022. Net leverage ratio of 0.0x at March 31, 2022 (unchanged from December 31, 2021).
  • During the quarter, ZIM entered into multiple charter agreements for 17 newbuilds. The vessels are expected to be delivered to ZIM throughout 2023 and 2024.
  • FY22 Outlook: The company expects Adjusted EBITDA of $7.8 billion - $8.2 billion (prior view $7.1 billion - $7.5 billion) and Adjusted EBIT of $6.3 billion - $6.7 billion (prior view $5.6 billion - $6.0 billion).
  • Price Action: ZIM shares are trading lower by 7.52% at $60.15 on the last check Wednesday.
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