ZIM Integrated (NYSE: ZIM) results missed its revenue and profitability guidance as shipping rates continued weakening. The company also swung into a net loss in the first quarter of this year.
In a statement, ZIM Integrated’s revenue plunged by 68% from the same period in 2022. Its revenue dropped to $1.37 billion as its carried volume fell by 10% to 769 TEU as the average freight rate dropped by 64% to $1,390.
ZIM Integrated left its forward guidance unchanged. It expects that its EBITDA will be between $1.8 billion and $2.2 billion this year. Its EBIT is expected to come between $100 and $500 million this year as it expects that it market conditions will improve. In a statement, the company’s CEO said:
“We continue to anticipate positive EBIT in 2023 despite macro and industry headwinds. Our expectation is for recovery in demand with inventory restocking to begin in the second half of this year, resulting in an improvement in freight rates.”
Shipping companies like ZIM Integrated, Maersk, Star Bulk Carriers, Matson, and Golden Ocean Group are struggling as the cost of shipping crashed. The closely watched Drewry World Container Index has crashed from almost $8,000 in May last year to $1,720.
Sadly, this situation could continue worsening in the coming months, as evidenced by the economic data. Early this month, data by the Chinese government shows that the country’s industrial production and trade numbers disappointed in April.
ZIM stock price has crashed by more than 72% in the past 12 months, which has pushed its yield to 96%. The stock fell by 4.85% in the pre-market.
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