The Israeli shipping company said the updated guidance was due to weakness in freight rates and lower volume growth than originally forecasted.
Container liner shipping company ZIM Integrated Shipping Services Ltd has adjusted its expectations for 2023 ahead of the release of its Q2 results in August.
The Israel-based company said it now expects to generate Adjusted EBITDA of between $1.2bn and $1.6bn, down from $1.8bn to $2.2bn, and an Adjusted EBIT loss of between $100m and $500m, a reverse of the previous positive EBIT between $100m and $500m.
President and CEO Eli Glickman explained that an expected muted demand for the rest of the year and continued challenging conditions for the container shipping market were to blame for the adjustments.
He said: “While our second quarter results are broadly in-line with our expectations, we no longer anticipate an improvement in freight rates in the second half of 2023, consistent with seasonality, as previously assumed.”
However, Glickman said that the company’s “cost-effective and fuel-efficient newbuild capacity” should improve ZIM’s cost structure and competitive position.
Additionally “During this downturn, we will continue to actively manage and rationalize our fleet and services, to maximize our cash position, while remaining true to our customer-centric approach, a hallmark of ZIM’s success.” He added.
ZIM will reports its Q2 2023 results during a conference call next month on Wednesday August 16.
The reduction in expectations for ZIM comes not long after the company reported a slightly reduced net income of $4.63bn for 2022 compared to $4.65bn in 2021, largely thanks to a significant decrease in Q4 2022 which saw a net income of $417m compared to $1.71bn in Q4 2021.
Source: Ship Technology
