ZIM Integrated Shipping Services Ltd. (ZIM) has reaffirmed its profit guidance for the year after reporting strong second quarter performance.

The Israeli shipping line reported a net income of US$1.34 billion for the second quarter or a year-on-year increase of 50% compared to the US$888 million it made during the second quarter of 2021.

It added that adjusted EBITDA for the second quarter was US$2.10 billion, also posting a year-over-year increase of 57%.

For the second quarter, ZIM noted that it carried 856,000 TEUs registering a 7% decline over the same April to June period.

 Photo: ZIM (Eli Glickman ZIM President & CEO)
 

"Best ever" first-half recorded

"We reported today strong Q2 results, including net profit of US$1.34 billion, as well as our best ever first half-year results with standout margins, among the highest of our liner peers," said Eli Glickman, ZIM president & CEO.

"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," he added, noting that ZIM also raised its quarterly dividend payout from 20% to 30% of quarterly net income.

"Over the past several weeks, we have seen a gradual decline in freight rates, including in the transpacific trades, despite continued port congestion and resilient demand, driven by macroeconomic and geopolitical uncertainties," the ZIM chief said.

He added that the dynamic nature of the shipping industry illustrates the importance of staying focused on core strategy and key strengths and for ZIM, Glickman noted that this is "centred on successfully identifying attractive growth opportunities and adjusting our fleet size dependent on changing market conditions."

Meanwhile, despite present challenges and the ongoing supply chain disruptions facing the industry, the ZIM chief signalled optimism for the shipping line's overall prospects this year.

Glickman also reaffirmed ZIM's profit guidance for the full year 2022.

"Despite the backdrop of various challenges, based on our strong performance in the year to date coupled with spot and contract rates that remain highly profitable, we are reaffirming our 2022 guidance, which would mark another year of record earnings and profitability," Glickman said.

ZIM carried 1,715 thousand TEUs in the first half of 2022, compared to 1,739 thousand TEUs in the first half of 2021.

The ocean carrier noted that the average freight rate per TEU was US$3,722 for the first half of 2022, compared to US$2,145 for the first half of 2021.

Reaffirmed full-year guidance

"The Company reaffirmed its previously provided guidance for the full-year 2022 and expects to generate Adjusted EBITDA of between US$7.8 billion and US$8.2 billion and Adjusted EBIT of between US$6.3 billion and US$6.7 billion," ZIM said.

The shipping line raised its full-year forecast in May after it reported record income for the January to March period.

The shipping line said it generated its "highest ever" quarterly net income of US$1.7 billion in the period ending March and adjusted EBITDA reached US$2.5 billion — delivering "industry-leading operating margins" ZIM said.