Israel-Based Cargo Shipping Company ZIM Integrated Smashes Estimates With 626% EBITDA Growth, Upgrades 2024 Outlook

ZIM Integrated Shipping Services Ltd (NYSE:ZIM) shares are trading higher after it reported a third-quarter sales increase of 117% year over year to $2.77 billion, beating the consensus of $2.43 billion.

Revenue was driven by the increase in freight rates as well as carried volume. The cargo shipping company’s carried volume in the quarter was 970 thousand TEUs, up 12% Y/Y. The average freight rate per TEU was $2,480 (+118% Y/Y).

Adjusted EBITDA escalated 626% Y/Y to $1.53 billion, with margins of 55% vs. 17% in the prior year quarter.  

The Haifa, Israel-based company generated an EPS of $9.34, vs a loss of $18.90 last year, beating the consensus of $7.20.

Operating cash flow for the nine months was $2.60 billion, compared to $858 million a year ago. Capital expenditures were $50 million during the quarter versus $14 million a year ago.

ZIM’s total cash position increased by $441 million from $2.69 billion as of December 31, 2023, to $3.13 billion as of September 30, 2024.

ZIM’s net leverage ratio was 0.9x as of September-end, compared to 2.2x as of December 31, 2023.

Dividend: The Board of Directors declared a regular cash dividend of $340 million ($2.81 per share), representing 30% of third-quarter 2024 net income, and a special dividend of $100 million ($0.84 per share).

The total dividend of $440 million ($3.65 per share) will be payable on December 9, 2024, to shareholders of record as of December 2, 2024.

2024 Outlook: ZIM raised the adjusted EBITDA outlook to $3.3 billion – $3.6 billion (from $2.6 billion – $3 billion) and adjusted EBIT to $2.15 billion – $2.45 billion (from $1.45 billion – $1.85 billion prior).

Eli Glickman, ZIM President & CEO, said, “We will close out the year with the final delivery of the remaining four out of 46 newbuild containerships that we secured, which include 28 LNG-powered vessels. Entering 2025, we will be operating a fleet that is both well-equipped to meet emissions reduction targets and well suited to the trades in which we operate.”

Investors can gain exposure to the stock via Tidal Trust II YieldMax Ultra Option Income Strategy ETF (NYSE:ULTY) and SonicShares Global Shipping ETF (NYSE:BOAT).

Price Action: ZIM shares are up 8.10% at $28.95 premarket at the last check Wednesday.

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