ZIM Integrated Shipping Services Ltd. Q4 FY2024 earnings call

• 2024 was an exceptional year with best results ever outside COVID period. Achieved third consecutive quarter of record carried BTUs and double-digit volume growth.
• Declared a dividend of $3.17 per share, total dividend payout for 2024 including special dividend was $7.98 per share or $961 million, ~45% of 2024 net income.
• Secured 46 new build containerships, including 28 LNG-powered vessels, with 50% of capacity as new builds and 40% LNG powered.
• Commercial strategy included increasing spot exposure in trans-Pacific trade to ~65%, and operational cooperation with MSC on Asia to U.S. east coast trade launched and working as planned.
• Volume growth driven by share gains from new capacity on Asia to U.S. east coast, expedited services to U.S. west coast, and expanded presence in Latin America.

In 2024, ZIM achieved outstanding financial performance. Revenue was $8.4 billion, net income was $2.2 billion, adjusted EBITDA was $3.7 billion, and adjusted EBIT was $2.5 billion with adjusted EBITDA margin of 44% and adjusted EBIT margin of 30%. Volume growth was 14% in 2024, far exceeding the overall market growth of less than 6%. The container shipping segment was the primary driver, with strong performance driven by fleet transformation, commercial strategy, and share gains in key trade lanes.

• 2025 adjusted EBITDA guidance range: $1.6 billion to $2.2 billion; adjusted EBIT range: $350 million to $950 million, with better performance expected in first half vs second half.
• Assumes significant decline in freight rates in 2025 compared to 2024. Base scenario assumes Red Sea not opening earlier than second half of 2025.
• Expect to maintain constant operating capacity in 2025, with single-digit volume growth and similar bunker costs to 2024.

• Geopolitical factors: USTR proposal to impose new port charge on Chinese-made vessels, trade wars between U.S. and trading partners.
• Uncertainty around Red Sea reopening timing, which could impact freight rates and capacity.
• Freight rate decline risk, with unknown if due to seasonality or continuing price movement.
• Over-supply risk in the near future, with order book to fleet ratio and potential vessel deliveries affecting market.

Q: Muneeba Kayani asked about guidance timeline and USTR exposure, Xavier responded on Red Sea reopening timeline and USTR monitoring Q: Marco Limite asked about capex and lease payments, Xavier responded on lease liability repayment expectations Q: Omar Nokta asked about fleet strategy and diversification, Xavier responded on focus on core shipping and digital initiatives Q: Alexia Dogani asked about current rates, fleet agility, and capital allocation, Xavier responded on rate uncertainty, fleet strategy post-COVID, and capital allocation for new builds