ZIM Integrated Shipping Services Ltd. (NYSE) is eyeing positive operating income in 2023 amid continuing challenges in the shipping industry driven by supply-demand imbalance and persisting macroeconomic uncertainties.
For the full year, ZIM expects to generate Adjusted EBITDA between US$1.8 billion to US$2.2 billion and Adjusted EBIT between US$100 million to US$500 million.
The Israeli shipping line made the forecast as it announced its consolidated results for the three and twelve months that ended December 31, 2022, where it recorded its operating income (EBIT) for the fourth quarter dropping to US$585 million, a year-over-year decrease of 72%.
ZIM 2022 performance
During the same Q4 period, ZIM also reported a net income decline to US$417 million, compared to US$1.71 billion recorded during the same period in 2022.
For the full-year 2022, net income stood at US$4.63 billion, almost unchanged from 2021's US$4.65 billion.
In a statement, the shipping line said adjusted EBITDA for the fourth quarter was US$973 million, a year-over-year decrease of 59%, although adjusted EBITDA for the full year was up 14% to US$7.54 billion.
Operating income (EBIT) for the fourth quarter was US$585 million, a year-over-year decrease of 72% while operating income (EBIT) for the full year was US$6.14 billion, a year-over-year increase of 5%.
Carried volume in the fourth quarter reached 823,000 TEUs, up 4% year-on-year for a total throughput of 3.380 million TEUs for 2022, or a decline of 3%.
The average freight rate per TEU in the fourth quarter was US$2,122, a year-over-year decrease of 42% and the average freight rate per TEU in the full year was US$3,240, a year-over-year increase of 16%.
2023 plans, profit guidance
"2022 was an exceptional year for ZIM, as we capitalized on both our differentiated strategy and the attractive market, driving record full-year Adjusted EBITDA and EBIT results," said Eli Glickman, ZIM President & CEO.
He noted that over the past two years, ZIM had taken important steps amidst a highly lucrative market to best position the carrier to execute in a "more normalized trading environment."
Specifically, Glickman noted that ZIM enhanced its vessel sourcing strategy to secure attractive new build capacity and improve our cost structure — and has also diversified the ocean carrier's commercial presence to ensure ZIM is optimizing its performance to create long-term sustainable shareholder value.
"Our chartered LNG-powered newbuild capacity is expected to significantly improve our cost structure throughout 2023 and beyond, strengthen our commercial prospects and advance our ESG objectives for ZIM and our customers," the ZIM chief executive said, adding that consistent with its global niche strategy, the shipping line also continuously review and adapt its network to respond to changing market needs.
"While macroeconomic uncertainties, the precipitous decline in freight rates over the past few months and the supply-demand imbalance continue to drive a challenging near-term outlook for container shipping, we are confident in ZIM’s strategy and believe we will generate positive EBIT in 2023," Glickman said.
For this year, Glickman noted that ZIM would also harness digital opportunities and further promote the ocean carrier's sustainability initiatives.
"In 2023 and beyond, our focus on leveraging digital strategies, operating a high-quality, sustainable fleet, and further implementing our global niche strategy positions us well to best serve our customers and generate long-term sustainable value for our shareholders," the ZIM chief executive said.
ZIM noted that approximately 44% of its total 2022 net income would be provided for shareholder dividends or US$2.04 billion.
