ZIM hugely profitable in Q2, but less than Q1

ZIM Integrated Shipping Services Ltd. (NYSE: ZIM) has reported $1.3 billion net profit for the second quarter of 2022, up 50% from the corresponding quarter of 2021 but down 24% from the preceding quarter.

Shipping prices spiraled by hundreds of percent in the wake of the Covid pandemic but in the second quarter those prices began to fall and consequently Zim’s share price is down 45% since March, and closed yesterday at $50.90, giving a market cap of $6.105 billion.

ZIM’s financial report shows that the average shipping price per TEU fell from $3,848 in the first quarter to $3,596 in the second quarter, still 53% higher than in the second quarter of 2021.

ZIM’s revenue in the second quarter was $3.4 billion, 44% higher than in the corresponding quarter of 2021, but 8.5% lower than the preceding quarter. Revenue in the first half of 2022 was $7.1 billion, up 73% from the first half of 2021. Net profit in the first half rose by a similar percentage to $3 billion.

ZIM President and CEO Eli Glickman said, “We reported today strong Q2 results, including net profit of $1.34 billion, as well as our best ever first half-year results with standout margins, among the highest of our liner peers. During this period, we maintained our strong execution, agility and commitment to profitable growth as we continue to advance ZIM’s position as an innovative digital leader of seaborne transportation. Due to our conviction in ZIM’s ability to earn sustainable long-term profits, we are increasing our quarterly dividend payout from 20% to 30% of quarterly net income, allowing shareholders to benefit from our strong results even more directly on a quarterly basis. Importantly, at the same time, we maintain our dividend policy, according to which shareholders may receive up to 50% of annual earnings.”

Glickman said, “We have raised our rate of tax payment from 16% annually to a rate of 23%. The results reflect that we have a serious partner in profitability and that is the Tax Authority. According to our annual rate of profitability, we expect to pay the State of Israel taxes totaling $1.5 billion this year. Tax in Israel is between eight and ten times higher than rival shipping companies in the world pay.”

ZIM share price opened down 7.37% on Wall Street at $47.14.

Published by Globes, Israel business news – en.globes.co.il – on August 17, 2022.

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