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Zim Integrated Shipping Services Ltd. (ZIM)
:ZIM
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ZIM Integrated Shipping Services
(NYSE:ZIM)
76Outperform
Positive Factors
Dividend
ZIM announced a higher-than-expected quarterly dividend of $3.17, bringing the annual dividend to $7.14, which is above consensus.
Financial Flexibility
ZIM's robust cash position provides significant flexibility to withstand potential market pressures.
Financial Performance
Fourth quarter EBITDA exceeded expectations by 20% due to better-than-expected realized rates.
Negative Factors
Freight Rates
Freight rates and earnings for ZIM are expected to decline significantly in 2025, with an EBITDA decline of -54%.
Market Oversupply
There is a risk of a multiyear oversupplied container shipping market, impacting ZIM’s earnings and returns.
Trade Demand Risk
Increasing risk to trade demand has led to a lower price objective for ZIM shares.
ZIM Integrated Shipping Services (ZIM) vs. S&P 500 (SPY)
Market Cap
$1.52B
Dividend Yield56.67%
Average Volume (3M)8.19M
Price to Earnings (P/E)0.7
Beta (1Y)1.37
Revenue Growth63.25%
EPS GrowthN/A
CountryUS
Employees4,850
SectorIndustrials
Sector Strength70
IndustryMarine Shipping
Share Statistics
EPS (TTM)17.84
Shares Outstanding120,457,510
10 Day Avg. Volume8,791,810
30 Day Avg. Volume8,185,047
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.17
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$14.77Price Target Upside7.11% Upside
Rating ConsensusModerate Sell
Number of Analyst Covering3
ZIM Integrated Shipping Services Business Overview & Revenue Model
Company DescriptionZIM Integrated Shipping Services Ltd., together with its subsidiaries, provides container shipping and related services in Israel and internationally. It provides door-to-door and port-to-port transportation services for various types of customers, including end-users, consolidators, and freight forwarders. The company also offers ZIMonitor, a premium reefer cargo tracking service. As of December 31, 2021, it operated a fleet of 118 vessels, which included 110 container vessels and 8 vehicle transport vessels, of which four vessels were owned by it and 114 vessels are chartered-in; and network of 70 weekly lines. The company was incorporated in 1945 and is headquartered in Haifa, Israel.
How the Company Makes MoneyZIM Integrated Shipping Services generates revenue primarily through its container shipping operations. The company earns money by transporting goods for customers across international waters, charging freight rates based on factors like cargo volume, distance, and service type. ZIM's revenue streams include long-term contracts with major corporations, spot market transactions, and additional services such as logistics, terminal operations, and container leasing. Partnerships with global ports and shipping alliances enhance ZIM's network and operational efficiency, allowing it to optimize shipping routes and reduce costs. The company's focus on digital innovation and personalized customer solutions also contributes to its competitive edge and financial performance.
ZIM Integrated Shipping Services Financial Statement Overview
Summary
ZIM demonstrates robust financial health with significant improvements in income statement metrics, strong cash generation, and a stable yet leveraged balance sheet. The company shows impressive revenue growth and operational efficiency, although the increased debt level needs monitoring.Income Statement
ZIM has demonstrated substantial improvement in its income statement metrics. The gross profit margin significantly increased from a negative value in 2023 to a positive 33.0% in 2024, indicating a robust recovery. Net profit margin also improved to 25.5% in 2024 from a negative margin in the previous year. The revenue growth rate of 63.3% from 2023 to 2024 highlights a strong growth trajectory. EBIT and EBITDA margins are impressive at 30.0% and 45.3%, respectively, showcasing operational efficiency.85
Very Positive
Balance Sheet
The balance sheet reflects a stable financial position with a debt-to-equity ratio of 1.49, indicating moderate leverage. The return on equity (ROE) is high at 53.2%, reflecting strong profitability relative to equity. The equity ratio of 35.4% suggests a balanced approach between debt and equity financing. However, the increase in total debt from the previous year poses a potential risk.75
Positive
Cash Flow
The cash flow statement shows a healthy position with a free cash flow growth rate of 291.2% from 2023 to 2024. The operating cash flow to net income ratio is 1.75, indicating strong cash generation relative to net earnings. The free cash flow to net income ratio is robust at 1.65, underscoring the company’s ability to generate cash above its net earnings.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 8.43B | 5.16B | 12.56B | 10.73B | 3.99B | Gross Profit |
| 2.78B | -2.21B | 6.43B | 6.07B | 865.02M | EBIT |
| 2.53B | -2.51B | 6.14B | 5.82B | 722.05M | EBITDA |
| 3.82B | -955.10M | 7.65B | 6.60B | 1.00B | Net Income Common Stockholders |
| 2.15B | -2.70B | 4.62B | 4.64B | 518.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 2.12B | 1.80B | 3.26B | 3.69B | 629.39M | Total Assets |
| 11.39B | 8.35B | 11.63B | 9.84B | 2.82B | Total Debt |
| 6.02B | 5.01B | 4.35B | 3.32B | 1.83B | Net Debt |
| 4.70B | 4.09B | 3.33B | 1.78B | 1.26B | Total Liabilities |
| 7.35B | 5.89B | 5.73B | 5.24B | 2.55B | Stockholders Equity |
| 4.04B | 2.45B | 5.89B | 4.59B | 267.27M |
| Cash Flow | Free Cash Flow | |||
| 3.54B | 904.30M | 5.76B | 4.97B | 838.10M | Operating Cash Flow |
| 3.75B | 1.02B | 6.11B | 5.97B | 880.80M | Investing Cash Flow |
| -223.20M | 1.78B | -1.65B | -3.34B | -35.20M | Financing Cash Flow |
| -3.13B | -2.89B | -4.98B | -1.65B | -460.40M |
ZIM Integrated Shipping Services Technical Analysis
Negative
13.79
Price Trends
15.49
Negative
15.77
Negative
14.78
Negative
Market Momentum
-0.25
Positive
48.83
Neutral
13.54
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZIM, the sentiment is Negative. The current price of 13.79 is below the 20-day moving average (MA) of 14.46, below the 50-day MA of 15.49, and below the 200-day MA of 14.78, indicating a bearish trend. The MACD of -0.25 indicates Positive momentum. The RSI at 48.83 is Neutral, neither overbought nor oversold. The STOCH value of 13.54 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ZIM.
ZIM Integrated Shipping Services Risk Analysis
ZIM Integrated Shipping Services disclosed 55 risk factors in its most recent earnings report. ZIM Integrated Shipping Services reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
ZIM Integrated Shipping Services Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $1.34B | 2.76 | 15.68% | 4.79% | 6.00% | -9.89% | |
76 Outperform | $1.52B | 0.71 | 66.17% | 56.67% | 63.25% | ― | |
72 Outperform | $1.58B | 4.83 | 14.71% | 16.25% | 33.31% | 62.94% | |
68 Neutral | $1.37B | 6.14 | 11.68% | 15.33% | 9.33% | 98.70% | |
67 Neutral | $1.12B | 7.63 | 12.05% | 14.79% | 20.22% | 52.03% | |
64 Neutral | $1.04B | 3.55 | 13.07% | 5.31% | 37.10% | -17.36% | |
62 Neutral | $7.50B | 12.89 | 3.19% | 3.38% | 3.64% | -14.27% |
* Industrials Sector Average
Performance Comparison
ZIM
ZIM Integrated Shipping Services
13.79
7.18
108.62%
CMRE
Costamare
8.99
-1.69
-15.82%
DAC
Danaos
73.45
3.77
5.41%
SFL
SFL Corporation
7.72
-3.69
-32.34%
SBLK
Star Bulk Carriers
14.24
-6.62
-31.74%
GOGL
Golden Ocean Group
7.39
-4.40
-37.32%
ZIM Integrated Shipping Services Earnings Call Summary
Earnings Call Date: Mar 12, 2025 | % Change Since: -17.43% | Next Earnings Date: May 14, 2025
Earnings Call Sentiment Neutral
The earnings call for ZIM Integrated Shipping Services shows a strong financial performance for 2024 with record net income and revenue, and significant dividends distributed to shareholders. The company has made substantial progress in fleet modernization and volume growth. However, there are several uncertainties for 2025, including potential declines in freight rates, geopolitical issues, and fleet over-capacity, which could impact future performance. Although the company's strategic position is strong, the outlook for 2025 is cautious due to external factors. The overall sentiment of the earnings call is a mix of positive achievements in 2024 and concerns about potential challenges in 2025.Highlights
Record-Breaking Financial Performance
In 2024, ZIM reported its best financial results ever outside the extraordinary earnings generated during the COVID period. The company achieved a net income of $2.2 billion and a revenue of $8.4 billion, with an adjusted EBITDA of $3.7 billion and an adjusted EBIT of $2.5 billion. The adjusted EBITDA margin was 44%, and the adjusted EBIT margin was 30%. ZIM's free cash flow in 2024 totaled $3.6 billion, compared to $919 million in 2023.
Record Volume Growth
ZIM achieved a third consecutive quarter of record carried BTUs in Q4 2024 and delivered a 14% double-digit volume growth for the year, compared to the overall market growth of less than 6%. The company's trans-Pacific volume grew by 27% in 2024.
Significant Dividend Payout
ZIM declared a dividend of $3.17 per share for a total of $382 million, bringing the total dividend payout on account of 2024 results to $7.98 per share or $961 million, representing approximately 45% of the 2024 annual net income.
Lowlights
Potential External Challenges
The business environment is impacted by external factors such as geopolitics, US and international political dynamics, economic, monetary, and fiscal policies. The recent proposal from the Office of the U.S. Trade Representative to impose a new port charge of up to $1.5 million for each port call on Chinese-made vessels adds to the uncertainty.
Freight Rate Decline
A steep decline in freight rates has been observed in recent weeks. It is uncertain whether this decline is due to typical seasonality or if it indicates a continuing trend. The guidance for 2025 assumes a significant decline in freight rates compared to 2024.
Potential Fleet Over-Capacity
There is a risk of over-supply in the near future, with the current order book to fleet ratio at approximately 27%, or 8.5 million TEUs, which could put additional pressure on freight rates.
Uncertainty in Global Trade
The business environment is impacted by geopolitical issues, international and U.S. domestic political dynamics, and economic, monetary, and fiscal policies, creating a high level of uncertainty.
Decline in Freight Revenue for Non-containerized Cargo
Freight revenue from non-containerized cargo decreased from $535 million in 2023 to $497 million in 2024, partly due to a partial reclassification within revenue types.
Potential Management Buyout Rumors
There were questions raised about a potential management buyout, which the company declined to comment on, maintaining their focus on their strategic goals.
Company Guidance
In the recent conference call for ZIM Integrated Shipping Services, the company provided guidance for fiscal year 2025, setting expectations for adjusted EBITDA between $1.6 billion and $2.2 billion, and adjusted EBIT ranging from $350 million to $950 million. The company highlighted its strong financial performance in 2024, achieving a net income of $2.2 billion and revenue of $8.4 billion, with adjusted EBITDA and EBIT margins of 44% and 30%, respectively. ZIM also declared a dividend of $3.17 per share, contributing to a total 2024 dividend payout of $7.98 per share, equating to 45% of the annual net income. The guidance reflects the potential impacts of geopolitical tensions, economic policies, and market dynamics such as the proposed U.S. port charges for Chinese-made vessels and fluctuating freight rates. The company also emphasized its strategic focus on a modern fleet, with 50% of its capacity comprised of new builds and 40% being LNG-powered.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.