ZIM Rises Tide for Quarterly Profit – gCaptain
By Gavin van Marle (The Loadstar)
New York Stock Exchange-listed Israeli container ship Zim rewarded investors yesterday, reporting first quarter results which were among the best in the industry.
The carrier saw its first-quarter revenue more than double year-over-year to $ 1.744 billion, thanks to skyrocketing freight rates, and revenue per teu rose from $ 1,091 to $ 1,091 billion. T1 20 to 1925 dollars this year.
And it has seen 28% year-over-year volume growth – so far the highest on record by any operator reporting its results.
Adjusted EBITDA was $ 821 million, up from $ 97 million a year earlier, with a margin of 47%, and net income was $ 590 million, compared to a loss of $ 12 million in the first quarter from last year.
Zim carried 818,000 teu over the period (638,000 teu last year), a better growth rate than OOCL’s 23.8% and well above that of the largest carriers – Maersk recorded an increase of 5 , 7% of volumes, while Hapag-Lloyd recorded a decrease of 3%.
CFO Xavier Destriau said The Loadstar The increase in volume was largely the result of organic growth, in the particular businesses in which it operated, and modal shift, as a growing number of e-commerce customers shifted from air freight to the ocean.
“We are focused on profit rather than gaining market share, but during this quarter that translated into higher than market growth because we entered businesses that were under-resourced,” we were a pioneer in entering the e-commerce market and we captured a significant amount of cargo that was traveling by air, ”he said.
In October, Zim signed a strategic cooperation agreement with Alibaba, allowing customers of the Chinese e-commerce platform to book ocean freight shipments directly, although CEO Eli Glickman (pictured below) added that ‘Amazon had also become a major customer.
Last summer, it launched its autonomous service Zim e-commerce express (ZEX) between the gateways in southern China and Los Angeles, which, according to the eeSea Liner database, deploys five 4,200 teu vessels.
“A growing proposition from our e-commerce client now is to sign long-term contracts with us,” Mr. Glickman said, adding that annual contract negotiations were completed “months before last year” and the carrier had effectively turned down contracted shippers. since.
“We couldn’t meet all the demand and we stopped signing contracts because we want to maintain a 50/50 mix between cash and contract markets.”
Much of Zim’s recent success also stems from its vessel-sharing agreement with partners 2M Maersk and MSC, both as a slot charterer and vessel operator, which will expire in 2025.
“We have provided two vessels on the new service between Vietnam and the east coast of the United States and although we compete with Maersk and MSC, and compete, all partners can see the benefit of jointly operate these services> And on our side we will do our best to extend the agreement, ”said Mr. Glickman The Loadstar.
All of this has left Zim with a healthy balance sheet, and investments this year will be directed towards investments in its container fleet.
“We are a light company when it comes to ships, but we want to increase the share of detained containers to over 30% of our fleet,” said Destriau.
“Crossing this threshold is a first step and I consider that owning containers is a good use of the money we have generated, because containers are a liquid asset and retain their value over the years, and even at the end of their life there is junk. value, ”he added.
Of the $ 590 million it has allocated to buy containers, it has taken delivery of the first tranche of $ 121 million, with the majority coming in the second quarter and the rest in the third and fourth.
“Unlike other shipping companies, we haven’t experienced a shortage of containers – our customers have been fully supplied with all the equipment they need,” Glickman said.
It is unlikely, however, to speak to the shipyards that order ships. A recent agreement with non-operating owner Seaspan for ten 15,000 TEU LNG-fueled container ships on 10-year charters goes as far as its fleet expansion is likely to go.
“We don’t have the flexibility we need if we own vessels – we want to make sure that we can scale up and down in size to fully capture volumes; we don’t want to own ships that we then have to inject into trades for which they are not suitable, ”said Mr. Destriau.
“That said, we will still need supply size and mid-size vessels – the 15,000 teu that we will be chartering from Seaspan are the optimum size for the Asia-US East Coast trade and are on the line. comfortable with longer term charter. ,” he added.
Meanwhile, Zim shareholders were rewarded with a special dividend of $ 238 million, representing $ 2 per share, in addition to the annual dividend for 2021.
“We are now in a situation, thanks to the great quarter and because we have a very strong visibility over the rest of 2021, where we were able to prepay the debt and return the capital to our shareholders – it’s just us who let’s do what we said we would, ”added Destriau.
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