ZIM Announces Record Financial Year in 2021
Net Income of $4.65 Billion, Adjusted EBITDA of $6.60 billion, and Adjusted EBIT of $5.82 billion
As the containershipping industry enjoys its greatest boom of a generation, ZIM Integrated Shipping Services Ltd. (NYSE: ZIM) announced its consolidated results for the three and 12 months ended December 31, 2021.
- Net income for the fourth quarter was $1.71 billion (compared to $366 million in the fourth quarter of 2020), a year-over-year increase of 366%, or $14.17 per diluted share ; net income for the full year was $4.65 billion (compared to $524 million for the full year of 2020), a year-over-year increase of 787%, or $39.02 per diluted share
- Adjusted EBITDA for the fourth quarter was $2.36 billion, a year-over-year increase of 345%; Adjusted EBITDA for the full year was $6.60 billion, a year-over-year increase of 537%
- Operating income (EBIT) for the fourth quarter was $2.12 billion, a year-over-year increase of 382%; operating income (EBIT) for the full year was $5.82 billion, a year-over-year increase of 706%. Reconciliation items between operating income and Adjusted EBIT in the fourth quarter and full year were minor
- Revenues for the fourth quarter were $3.47 billion, a year-over-year increase of 155%; revenues for the full year were $10.73 billion, a year-over-year increase of 169%
- Carried volume in the fourth quarter was 858 thousand TEUs, a year-over-year increase of 7%. Carried volume in the full year was 3,481 thousand TEUs, a year-over-year increase of 23%, significantly above industry average growth
- Average freight rate per TEU in fourth quarter was $3,630, a year-over-year increase of 139%. Average freight rate per TEU in the full year was $2,786, a year-over-year increase of 127%
- Declared approximately $2.04 billion, or $17.00 per share dividend, representing 50% of 2021 net income on a cumulative basis (including interim quarterly dividend already distributed on account of Q3 2021 results). The dividend will be paid on April 4, 2022 to holders of ZIM ordinary shares as of March 23, 2022
- During 2021 and subsequent to year end, entered into multiple charter agreements for a total of 36 newbuild vessels, of which 28 are LNG dual-fuel container vessels. The vessels are due to be delivered to ZIM throughout 2023 and 2024
- Subsequent to year end, announced extension and modification of operational cooperation agreement with the 2M alliance partners
Eli Glickman, ZIM President & CEO, said, “In our first year as the only global container liner listed on New York Stock Exchange, ZIM has achieved historically extraordinary results and executed on commitments made during our IPO process. ZIM’s agility and proactive strategies enabled us to unlock significant shareholder value during a time of unique and unprecedented challenges. With another quarter of exceptional financial performance, we generated our highest ever full year of revenues, adjusted EBITDA, net profit and operating cash flows, while once again delivering industry-leading margins. We also ended the year with a net positive cash position and strong financial flexibility.”
“Given our outstanding cash generation in 2021, we allotted capital to support our customers as we strive to provide best-in-class service. Importantly, we made sizable investments in equipment to facilitate the movement of cargoes for customers, as well as meaningfully expanded our operating fleet capacity and launched 17 new lines since June 2020, resulting in ZIM’s year-over-year carried volume tripling the global volume growth rate," said Glickman.
Part of ZIM's investment will be in its fleet, preparing for the new and evolving emission mandates. "We are seizing the opportunity to be at the forefront of carbon intensity reduction among global liners, with 28 eco-friendly LNG dual-fuel container vessels due to be delivered to us between 2023 and 2024, which could account for 40% of our operated capacity," said Glickman. "Our strategy to predominantly charter in vessels provides us a unique advantage, as we can easily transition our operating capacity without a legacy fleet to replace. Complementing our ESG objectives, we continue to invest in digital initiatives and disruptive technologies and further strengthen our commercial prospects to drive long-term profitable growth, while maintaining our disciplined approach to capital allocation to maximize value for all of ZIM’s stakeholders.”
Chartering Agreements for Newbuild Vessels
During 2021 and subsequent to year end, ZIM entered into four charter agreements for a total of 36 newbuild vessels, as follows:
- 10 x 15,000 TEU LNG dual-fuel container vessels chartered from Seaspan, intended to serve on the Asia to US East Coast trade
- 18 x 7,000 TEU LNG dual-fuel container vessels chartered from Seaspan (15 vessels) and an affiliate of Kenon Holdings (3 vessels), intended to serve across various global trades
- 8 x 5,300 TEU wide beam vessels chartered from Navios Maritime Partners, intended to serve in trades between Asia and Africa
All the newbuild vessels are expected to be delivered to ZIM during 2023 and 2024.