ZIM Integrated Shipping Services Ltd. Q4 FY2023 earnings call

• Resilience shown amidst industry disruptions and operational challenges, with focus on customer care even during the war in Israel. • Strategic transformation progressing as planned, with 46 newbuild containerships secured (28 LNG powered), 24 delivered, 22 expected in 2024. • Fuel renewal program enabling more efficient and competitive operation. • Commercial resilience actions like reinstating ZEX service, launching new West Coast bound service, and expanding in Latin America. • Strong customer experience results from 2023 annual survey with positive trends in satisfaction, loyalty, etc.

In 2023, ZIM generated revenue of $5.2 billion, a 59% decrease from the prior year. The average freight rate per TEU was $1,203 in 2023, 63% lower than 2022. Non-containerized cargo revenue (mostly car carrier services) totaled $534 million in 2023, a 73% increase. Q4 2023 revenue was $1.2 billion vs $2.2 billion in Q4 2022. Adjusted EBITDA in 2023 was $1.05 billion, down from $7.54 billion in 2022. Q4 2023 adjusted EBITDA was $190 million vs $973 million in Q4 2022. TEU carried in Q4 2023 was 786,000 (a 5% decrease from Q4 2022), and full year 2023 TEU carried was 3.3 million (a 3% decline from 2022).

• 2024 expected adjusted EBITDA: $850 million to $1.45 billion; adjusted EBIT: negative $300 million to positive $300 million. • First and potentially second quarter to benefit from higher spot rates, second half expected weaker. • Market dynamics post-Red Sea crisis uncertain; supply demand balance in 2024 points to oversupply with over 3 million TEUs expected to be delivered, but Red Sea crisis has created a more balanced market. • Newbuild deliveries in 2024 could alleviate supply pressure on some vessel segments.

• Uncertainty in resolution of Red Sea crisis impacting rate trends. • Potential for rates to decline if demand weakens as shippers remain cautious on inventory levels. • Supply of newbuild vessels affecting rate equilibrium. • Impact of charter renewals on fleet capacity and operational flexibility.

Q: About 2024 guidance, with first half potentially solid and second half weaker, any chance of shift to positive earnings in 1Q? And on dividend policy?

A: Eli Glickman said Q1 and Q2 expected better than Q4 2023, but early to talk dividend; Board reviews capital allocation quarterly.

Q: On Transpacific contracting season, how are discussions going? Any difference from last year?

A: Xavier Destriau said discussions started, strong interest in LNG proposition, but early to say where volume and rates will land, similar to past aim of 50% contract volume.

Q: On volume growth outlook, magnitude and how it relates to market growth?

A: Eli Glickman said ZIM aims for double-digit volume growth due to upsizing vessels in Transpacific, Latin America, etc.

Q: On non-containerized revenues, split of car carriers and future outlook?

A: Xavier Destriau said car carrier revenue was slightly over $500M in 2023, expecting similar in 2024 with 16 car carrier ships operated.