dbvirago/iStock Editorial via Getty Images
ZIM Integrated (NYSE:ZIM) shares plunged 10% premarket on Wednesday after the cargo shipping firm reported Q3 results that fell short of Wall Street estimates.
The shipping company incurred a massive net loss of $2.3B for the quarter, compared to net income of $1.17B in the year ago quarter. Its bottom line was weighed down by a non-cash impairment loss of $2.06B.
Revenues, too, fell 61% year-over-year to $1.27B, with carried volume of 867K TEUs registering a slight year-over-year increase. Average freight rate per TEU in the third quarter was $1,139, a year-over-year decrease of 66%.
CEO Eli Glickman noted “demand remained weak and freight rates continued to deteriorate” in Q3, and the company’s outlook for freight rates remains negative for the near future, leading to the impairment loss.
ZIM (ZIM) revised its guidance for the full year following the disappointing Q3 performance. It now expects an adjusted EBITDA of $900M-$1.1B, compared to $1.2B-$1.6B previously. Adjusted EBIT loss is expected to be between $600M-$400M, compared to earlier expectations of $500M-$100M.
Glickman added: “We are currently in a transition period, which we expect will extend into 2024, during which we should gradually see the benefits of the decisive actions we have taken to enhance ZIM’s commercial and operational resilience.”
Additionally, ZIM did not provide a dividend update following Q3 results. The firm has not paid dividend since past two quarters owing to continued losses. ZIM’s dividend policy, last noted in Q2, is to distribute 30-50% of annual net income as a dividend to shareholders.
As of September 30, 2023, net debt position was $1.62B, compared to net cash position of $279M as of December 31, 2022.
Shares of ZIM Integrated (ZIM) have fallen around -54% YTD and 70% over the past year.