HAIFA, Israel - ZIM Integrated Shipping Services Ltd. (NYSE: ZIM) reported a significant earnings miss in the first quarter of 2024, which sent its shares down by 9.75%. The global container liner shipping company announced a Q1 EPS of $0.75, falling short of the analyst estimate of $1.14.
However, the company's revenue aligned with expectations, coming in at $1.56 billion, consistent with the consensus estimate.
The earnings shortfall is the primary driver behind the stock's sharp decline. Despite this, ZIM's first quarter showed a notable improvement compared to the same period last year, with a net income of $92 million against a net loss of $58 million in Q1 2023. The company also reported a 14% increase in adjusted EBITDA to $427 million and a 14% rise in revenues year-over-year (YoY).
Eli Glickman, ZIM President & CEO, commented on the results, "ZIM's solid first quarter results illustrate the incremental benefits from our strategic transformation and the outstanding execution of the ZIM team worldwide, as well as a significant improvement in global freight rates." He highlighted the company's profitability growth in Q1 2024 and declared a dividend of $0.23 per share, totaling $28 million.
Looking ahead, ZIM has raised its full-year 2024 guidance, now forecasting an adjusted EBITDA between $1.15 billion and $1.55 billion and an adjusted EBIT from zero to $400 million. This updated guidance surpasses the company's previous expectations and suggests a positive outlook for the remainder of the year.
Glickman remains confident in ZIM's strategic positioning and its ability to maintain profitability over the long term, citing the delivery of newbuild containerships, including 28 LNG-powered vessels, by the year's end. This fleet enhancement is part of ZIM's commitment to volume growth targets and cost-efficiency.
The company's operational performance in the first quarter also showed a 10% YoY increase in carried volume and a 4% rise in the average freight rate per TEU. ZIM's net leverage ratio stood at 2.8x as of March 31, 2024, up from 2.2x at the end of 2023.
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