ZIM Integrated Shipping Services Ltd. Q2 FY2025 earnings call

Key Points

• Leveraged transformed fleet and improved cost structure to mitigate market disruption from American tariff announcements in Q2.
• Generated revenue of $1.6B, net income of $24M, adjusted EBITDA of $472M, and adjusted EBIT of $149M.
• Maintained total liquidity of $2.9B at June 30 and paid ~$470M in dividends in Q2.
• Board declared a dividend of $0.06 per share. Revised full-year guidance, raising the lower end of adjusted EBITDA to $1.8B-$2.2B and adjusted EBIT to $550M-$950M.
• Adapted Transpacific network in response to tariff changes, expanded presence in Southeast Asia and Latin America (10% volume growth year-over-year), and has a modern fleet with 123 containerships totaling 767,000 TEUs capacity.
• Announced new long-term chartering agreements for LNG dual-fuel vessels to strengthen core LNG fleet.

In Q2 2025, ZIM generated revenue of $1.6 billion. Net income was $24 million. Adjusted EBITDA was $472 million with an adjusted EBITDA margin of 29%, and adjusted EBIT was $149 million with an adjusted EBIT margin of 9%. Revenue from non-containerized cargo (car carrier services) totaled $111 million for the quarter. Total liquidity was $2.9 billion at June 30, and dividends of $7 million were declared based on Q2 results.

Guidance

• Raised the lower end of full-year adjusted EBITDA guidance to $1.8 billion to $2.2 billion and adjusted EBIT to $550 million to $950 million.
• Expect freight rates to be significantly lower in 2025 compared to 2024, with average freight rates in the second half lower than the first half.
• Assume flat volume year-over-year compared to 2024 due to Transpacific weakness and muted peak season outlook.
• Anticipate slightly lower bunker costs per ton in 2025 compared to 2024.

Risks

• Market volatility and uncertainty due to American tariff announcements impacting cargo flows and freight rates.
• Ongoing uncertainty regarding U.S.-China trade agreements complicating demand forecasting.
• Supply-demand balance issues with supply growth outpacing demand, and idle capacity staying low but charter market remaining strong.

Q: Omar Nokta asked about volume expectation for the year and vessel renewals.

A: Xavier Destriau said flat volumes due to muted peak season and reshuffling of capacity, and that if market doesn't improve, may not renew some of the 34 ships up for renewal.

Q: Alexia Dogani asked about timing effect of spot rates and capacity deployment.

A: Xavier Destriau said there's a time lag in revenue recognition from spot rate surge into Q3, and capacity deployment will be like-for-like compared to last year.

Q: Chloe Fu asked about cost improvements in Q2 and freight rates in H2.

A: Xavier Destriau said cost improvements came from scaling up vessel size, LNG transition, partnership with MSC, reducing empty repositioning, and digital initiatives; freight rates in H2 may be weaker due to muted seasonality and uncertainty.