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Zim closes 2023 with a loss and expects improvement

The Israeli liner shipping company Zim slipped deep into the red with its 2023 annual result. However, after an EBIT loss of more than $400 million, the company expects to return to profit in 2024.

The shipping company’s net loss for the fourth quarter amounted to $147 million, compared to a net profit of $417 million in the fourth quarter of 2022. The net loss for the full year, including a non-cash impairment charge of $2.06 billion, amounted to $2.69 billion, compared to a net profit of $4.63 billion for the full year 2022.” [ds_preview]

Adjusted EBITDA for the fourth quarter amounted to $190 million (-80%), while adjusted EBITDA for the full year reached $1.05 billion (-86%). Operating loss (EBIT) for the fourth quarter amounted to $54 million, compared to operating profit of $585 million in the fourth quarter of 2022. Operating loss for the full year 2023 amounted to $2.51 billion (due to a non-cash impairment charge of $2.06 billion in the third quarter), compared to operating profit of $6.14 billion in 2022.

Adjusted EBIT loss for the fourth quarter was $49 million, compared to adjusted EBIT of $585 million for the fourth quarter of 2022. Adjusted EBIT loss for the full year 2023 was $422 million, compared to adjusted EBIT of $6.15 billion for the full year 2022.

Revenue in the fourth quarter amounted to $1.21 billion (-45%), while revenue for the full year reached $5.16 billion (-59%), mainly due to the decline in freight rates. In the fourth quarter, Zim transported a volume of 786,000 TEU, a decrease of 4.6 % compared to the previous year; the volume transported for the full year amounted to 3.28 million TEU (-2.9 %). The average freight rate per TEU in the fourth quarter was USD 1,102 (-48%), while the average freight rate for the year as a whole fell by 63% to USD 1,203.

Zim forecasts profit for 2024

For 2024, the company expects adjusted EBITDA between $850 million and $1.450 billion and adjusted EBIT between a loss of $300 million and a profit of $300 million.

Eli Glickman, President and CEO of ZIM, said: “Our fleet renewal program, which includes 46 newbuilding containerships, is aimed at replacing ZIM’s reliance on older, less fuel-efficient vessels with a more cost- and fuel-efficient, more sustainable and largely LNG-powered newbuilding fleet, and is progressing as planned following the delivery of 24 new vessels to date. Our cost per TEU is declining and we expect further improvements when our 22 outstanding newbuilds are delivered later this year. We continue to review our services to best meet evolving customer needs and position Zim to take advantage of attractive growth opportunities.”

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