ZIM surges 10% in pre-market on record Q3 21 results (WOW factor soon gone...)

Transitioned to Quarterly Dividend Payout, Declared Q3 2021 Dividend of $2.50 per Share, Representing Approx. 20% of Quarterly Net Income; 30-50% of Total 2021 Net Income Expected to be Distributed in 2022

Significantly Increased 2021 Guidance to Between $6.2 Billion and $6.4 Billion of Adjusted EBITDA and Between $5.4 Billion to $5.6 Billion of Adjusted EBIT^[2]

Q3 2021 Carried Volume Increased 16% Year Over Year, Significantly Higher than Market Growth

HAIFA, Israel, Nov. 17, 2021 /PRNewswire/ — ZIM Integrated Shipping Services Ltd. (NYSE: ZIM), a global container liner shipping company, announced today its consolidated results for the three and nine months ended September 30, 2021.

Third Quarter 2021 Highlights

– Net income for the third quarter of 2021 was $1.46 billion or $12.16 per diluted share^[3], compared to $144 million or $1.36 per diluted share in the third quarter of 2020, a year-over-year increase of 913% and 794%, respectively

– Adjusted EBITDA for the third quarter of 2021 was $2.08 billion, compared to $262 million in the third quarter of 2020, a year-over-year increase of 693%

– Operating income (EBIT) for the third quarter of 2021 was $1.86 billion, compared to $189 million in the third quarter of 2020, a year-over-year increase of 884%. Reconciliation items between operating income (EBIT) and Adjusted EBIT in the third quarter of 2021 were negligible

– Revenues for the third quarter of 2021 were $3.14 billion, compared to $1.01 billion in the third quarter of 2020, a year-over-year increase of 210%

– ZIM carried 884 thousand TEUs in the third quarter of 2021, a year-over-year increase of 16%

– The average freight rate per TEU in the third quarter of 2021 was $3,226, a year-over-year increase of 174%

– Net leverage ratio^[1] of 0.0x at September 30, 2021, compared to 1.2x at December 31, 2020

– Declared a transition to interim quarterly dividend payout of approximately 20% of quarterly net income, with the fourth quarter dividend payout to total 30-50% of the annual net income, including the interim quarterly dividends; declared approximately $296 million, or $2.50 per share Q3 dividend (representing approximately 20% of Q3 2021 net income) to be paid on December 27, 2021

– Announced the strategic long-term chartering agreement and option exercise with Seaspan for a total of 15 x 7,000 TEU LNG-fueled vessels, further demonstrating ZIM’s commitment to reducing its carbon footprint

– During the third quarter of 2021 and subsequent to quarter end, ZIM purchased eight (8) second-hand vessels for total consideration of approximately $355 million

Eli Glickman, ZIM President & CEO, stated, “We are very proud of ZIM’s significant accomplishments since our IPO earlier this year. The company’s continued outstanding performance is a direct result of our team’s strong execution and success proactively capitalizing on both the highly attractive market and our differentiated approach. The exceptional results we generated in the third quarter, reflect our highest ever quarterly revenues, adjusted EBITDA, net profit and operating cash flow. Importantly, we have once again delivered industry-leading margins, outperforming the sector’s average.”

Mr. Glickman added, “During a time when we have posted record quarterly results, we are pleased to further allocate capital to enhance our commercial prospects and unlock shareholder value. Complementing our success securing our operating fleet and equipment to best serve our customers, we have distributed a $2.00 per share special dividend in September 2021 and we are now transitioning to paying quarterly dividends to provide shareholders with an immediate and more frequent return. Accordingly, we will be paying in December 2021 a $2.50 per share interim dividend for the third quarter, representing approximately 20% of quarterly net income. Based on our expectation to distribute 30-50% of 2021 net income, we are poised to return significant capital to shareholders in 2022.”

Mr. Glickman concluded, “Reflecting ZIM’s strong outlook and extremely positive container liner market fundamentals, we have once again raised our full-year 2021 guidance. As an innovative digital leader of seaborn transportation and logistics services, we are well positioned for the future. Going forward, our unrelenting focus remains on further executing our global-niche strategy to achieve superior long-term profitability, while maintaining significant fleet flexibility, promoting our ESG values as we provide a best-in-class customer experience and taking advantage of compelling growth opportunities…”

To read the full release, please click here.

Stock up 10% to $55.1 in pre-market trade on Wednesday; up only 0.66% to $50.4 at 10.30 EST; closed at $52.80, +5.4% for the day.