Maritime container freight company ZIM Integrated Shipping (ZIM.US) showed optimistic results for the full year 2022, and since then the price of its stock has been trying to reverse a downward trend. With rising inflation and economic uncertainty and geopolitical tensions, shipping freight saw a significant slowdown in 2022. This resulted in a decline in rates for freight companies, which enjoyed an economic boom, primarily in 2021.
- ZIM results showed that the company survived the period by strengthening its business and surprised the market with a net result and high freight volume (TEUs) that turned out to be almost equal to the previous record despire recession fears;
- The company's revenue in 2022 was $12.56 billion (17% year-on-year growth), net income $4.63 billion versus $4.65 billion in 2021, with a current market capitalization of $2.8 billion;
- Adjusted EBITDA was $7.54 billion (14% y/y growth), the company recorded EBIT (operating income) of $6.15 billion (5% y/y growth). The company expects EBITDA to contract in 2023 to $1.8-2.2 billion and lower EBIT in the $100-500 million range;
- The dividend for Q4 2022 will be about $770 million or $6.40 per share. Along with previous 2022 distributions, the company will share 44% of 2022 net profit with shareholders;
- Q4 net income was $417 million vs. $1.71 billion in Q4 2021, yielding $3.44 per diluted share vs. $14.17 in Q4 2021. EBIT (operating income) in Q4 2022 was $585 million giving a 72% year-on-year decrease. Revenues also declined in Q4 2022, to $2.19 billion (37% decrease y/y);
- The average freight rate per TEU in Q4 was $2,122 (down 42% y/y), and in 2022 it was $3,240 (up 16% y/y). Freight volume in Q4 was 823,000 TEUs (down 4% y/y), and in 2022, 3.38 million. TEU (3% year-on-year decrease). TEU is the standard measure of one 20 ft container size.
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Freight rates fell powerfully in 2022, on all the most popular trade routes. Source: Drewry
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Open account Try demo Download mobile app Download mobile appCEO Eli Glickman conveyed that he is confident that the company will be able to generate positive operating income this year, and stressed that the company will reduce costs through ships powered by cheaper LNG fuel. Macro data from China released last night confirmed that economic recovery is indeed taking place, which could be a positive catalyst for freight rates. This could herald a positive surprise effect for ZIM as analysts expect a slowdown especially between Q2 and Q4 of this year. The biggest risks at present remain economic recession and deglobalization and tensions between Washington and Beijing.
ZIM Integrated Shipping (ZIM.US) stock, H4 interval. The price is trying to rise above $24 and has bounced upward from the average SMA 100 (red line). The main resistance level is in the $25 range, which bulls can break through by erasing the November 2022 downtrend gap. Source: xStation5
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