6-K
ZIM Integrated Shipping Services Ltd. (ZIM)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
For the month of August, 2023
Commission File Number: 001-39937
ZIM Integrated Shipping Services Ltd.
(Exact Name of Registrant as Specified in Its Charter)
9 Andrei Sakharov Street
P.O. Box 15067
Matam, Haifa 3190500, Israel
+972 (4) 865-2000
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Yes ☐ No ☒
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Yes ☐ No ☒
On August 16, 2023, ZIM Integrated Shipping Services Ltd. (the “Company”) issued a press release announcing its consolidated results for the three and six months ended on June 30, 2023. A copy of this press release and the Company’s condensed consolidated unaudited interim financial statements for the period ended on June 30, 2023 are attached herewith as Exhibit 99.1 and Exhibit 99.2, respectively.
The information in this Form 6-K (including Exhibit 99.1 and Exhibit 99.2) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| ZIM INTEGRATED SHIPPING SERVICES LTD. | |
|---|---|
| By: | /s/ Noam Nativ |
| Noam Nativ | |
| EVP General Counsel and Corporate Secretary |
Date: August 16, 2023
EXHIBIT INDEX
| EXHIBIT NO. | DESCRIPTION |
|---|---|
| 99.1 | Press Release dated August 16,<br> 2023 |
| 99.2 | Condensed consolidated unaudited<br> interim financial statements for the period ended on June 30, 2023 |
Exhibit 99.1
ZIM Reports Financial Results for the Second Quarter of 2023
Reported Revenues of $1.3 Billion, Net Loss of $213 Million, Adjusted EBITDA^1^ of $275 Million and Adjusted EBIT Loss^1^ of $147 Million
Haifa, Israel, August 16, 2023 – ZIM Integrated Shipping Services Ltd. (NYSE: ZIM), a global container liner shipping company, announced today its consolidated results for the three and six months ended June 30, 2023.
Second Quarter 2023 Highlights
| • | Net loss for the second quarter was $213 million (compared to net income of $1,336 million in the second quarter of 2022), or a diluted loss per share of $1.79^2^ (compared to diluted earnings per<br> share of $11.07 in the second quarter of 2022). Net loss for the quarter was negatively impacted by a non-cash after tax item of $51 million related to the redelivery of certain vessels. |
|---|---|
| • | Adjusted EBITDA for the second quarter was $275 million, a year-over-year decrease of 87% |
| --- | --- |
| • | Operating loss (EBIT) for the second quarter was $168 million, compared to operating income of $1,764 million in the second quarter of 2022 |
| --- | --- |
| • | Adjusted EBIT loss for the second quarter was $147 million, compared to Adjusted EBIT of $1,764 million in the second quarter of 2022 |
| --- | --- |
| • | Revenues for the second quarter were $1,310 million, a year-over-year decrease of 62% |
| --- | --- |
| • | Carried volume in the second quarter was 860 thousand TEUs, a slight year-over-year increase |
| --- | --- |
| • | Average freight rate per TEU in the second quarter was $1,193, a year-over-year decrease of 67% |
| --- | --- |
| • | Net leverage ratio^1^ of 0.5x at June 30, 2023, compared to 0.0x as of December 31, 2022; net debt of $1,633 million, compared to net cash of $279 million as of December 31, 2022 |
| --- | --- |
| • | Full year 2023 guidance: the Company expects to generate Adjusted EBITDA of $1.2 billion to $1.6 billion and Adjusted EBIT loss of $500 to $100 million^3^ |
| --- | --- |
^1^ See disclosure regarding “Use of Non-IFRS Financial Measures.”
^2^ The number of shares used to calculate the diluted earnings per share is 120,195,365. The number of outstanding shares as of June 30, 2023 was 120,218,275.
^3^ The Company does not provide IFRS guidance because it is not readily available. See disclosure regarding “Use of Non-IFRS Measures in the Company’s 2023 Guidance.”
Eli Glickman, ZIM President & CEO, stated, “We continue to take proactive steps to respond to current market realities, with a focus on minimizing costs while optimizing our commercial strategy. We have taken action to rationalize our existing capacity and routinely review our services to adapt our network to customer preferences and identify new commercial opportunities. We also explore opportunities to leverage operational collaborations to improve efficiencies. At the same time, as the year progresses, and into 2024, we expect our cost structure to improve in tandem with the delivery of our highly competitive, fuel-efficient, newbuild tonnage, including 28 LNG-powered vessels.”
Mr. Glickman added, “Although our second quarter results reflected continued near-term challenges in the container shipping market, our total cash position of $3.2 billion at quarter’s end remains strong. We believe our ample liquidity and solid balance sheet will enable ZIM to operate from a position of strength and maintain a long-term view even during a prolonged period of market weakness. As we overhaul our fleet profile and advance ESG objectives, for both ZIM and customers, we remain confident in the Company’s strategic positioning to drive profitable growth over the long term.”
Mr. Glickman concluded, “Based on a soft peak season and demand that is expected to remain subdued for the remainder of the year, ZIM forecasts full year Adjusted EBITDA of $1.2 billion to $1.6 billion and Adjusted EBIT loss of $500 million to $100 million in 2023. Moving ahead, we are committed to leveraging digital initiatives, enhancing our commercial and operational resilience, and further implementing our differentiated strategy to best serve our customers and generate sustainable value for shareholders.”
Summary of Key Financial and Operational Results
| Q2.22 | 1H.23 | 1H.22 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Carried volume (K-TEUs) | 860 | 856 | 1,629 | 1,715 | ||||||
| Average freight rate (/TEU) | 1,193 | 3,596 | 1,286 | 3,722 | ||||||
| Total Revenues ( in millions) | 1,310 | 3,429 | 2,684 | 7,145 | ||||||
| Operating income (loss) (EBIT) ( in millions) | (168 | ) | 1,764 | (182 | ) | 4,007 | ||||
| Profit (loss) before income tax ( in millions) | (272 | ) | 1,736 | (337 | ) | 3,955 | ||||
| Net income (loss) ( in millions) | (213 | ) | 1,336 | (271 | ) | 3,047 | ||||
| Adjusted EBITDA1 ( in millions) | 275 | 2,101 | 648 | 4,634 | ||||||
| Adjusted EBIT1 ( in millions) | (147 | ) | 1,764 | (160 | ) | 4,006 | ||||
| Adjusted EBITDA margin (%) | 21 | 61 | 24 | 65 | ||||||
| Adjusted EBIT margin (%) | (11 | ) | 51 | (6 | ) | 56 | ||||
| Diluted earnings (loss) per share () | (1.79 | ) | 11.07 | (2.29 | ) | 25.26 | ||||
| Net cash generated from operating activities ( in millions) | 347 | 1,710 | 520 | 3,370 | ||||||
| Free cash flow1 ( in millions) | 321 | 1,639 | 463 | 3,122 | ||||||
| DEC.22 | ||||||||||
| Net debt (Net cash)1 ( in millions) | 1,633 | (279 | ) |
All values are in US Dollars.
Financial and Operating Results for the Second Quarter Ended June 30, 2023
Total revenues were $1.31 billion for the second quarter of 2023, compared to $3.43 billion for the second quarter of 2022.
ZIM carried 860 thousand TEUs in the second quarter of 2023, compared to 856 thousand TEUs in the second quarter of 2022. The average freight rate per TEU was $1,193 for the second quarter of 2023, compared to $3,596 for the second quarter of 2022.
Operating loss (EBIT) for the second quarter of 2023 was $168 million, compared to operating income of $1,764 million for the second quarter of 2022, resulting mainly from the decrease in freight rates.
Net loss for the second quarter of 2023 was $213 million, compared to net income of $1,336 million for the second quarter of 2022. The expected redelivery of certain vessels sold and leased back by the Company in 2018 negatively impacted net loss by a non-cash after tax amount of $51 million.
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Adjusted EBITDA was $275 million for the second quarter of 2023, compared to $2,101 million for the second quarter of 2022. Adjusted EBIT loss was $147 million for the second quarter of 2023, compared to Adjusted EBIT of $1,764 million for the second quarter of 2022. Adjusted EBITDA and Adjusted EBIT margins for the second quarter of 2023 were 21% and -11%, respectively. This compares to 61% and 51% for the second quarter of 2022, respectively.
Net cash generated from operating activities was $347 million for the second quarter of 2023, compared to $1,710 million for the second quarter of 2022.
Financial and Operating Results for the Six Months Ended June 30, 2023
Total revenues were $2.68 billion for the first half of 2023, compared to $7.15 billion for the first half of 2022, primarily driven by the decrease in freight rates.
ZIM carried 1,629 thousand TEUs in the first half of 2023, compared to 1,715 thousand TEUs in the first half of 2022. The average freight rate per TEU was $1,286 for the first half of 2023, compared to $3,722 for the first half of 2022.
Operating loss (EBIT) for the first half of 2023 was $182 million, compared to operating income of $4,007 million for the first half of 2022. The decrease in operating income for the first half of 2023 was primarily driven by the above-mentioned decrease in revenues.
Net loss for the first half of 2023 was $271 million, compared to net income of $3,047 million for the first half of 2022. The expected redelivery of certain vessels sold and leased back by the Company in 2018 negatively impacted second quarter net loss by a non-cash after tax amount of $51 million.
Adjusted EBITDA was $648 million for the first half of 2023, compared to $4,634 million for the first half of 2022. Adjusted EBIT loss was $160 million for the first half of 2023, compared to $4,006 million for the first half of 2022. Adjusted EBITDA and Adjusted EBIT margins for the first half of 2023 were 24% and -6%, respectively. This compares to 65% and 56% for the first half of 2022.
Net cash generated from operating activities was $520 million for the first half of 2023, compared to $3,370 million for the first half of 2022.
Liquidity, Cash Flows and Capital Allocation
ZIM’s total cash position (which includes cash and cash equivalents and investments in bank deposits and other investment instruments) decreased by $1.4 billion from $4.6 billion as of December 31, 2022 to $3.2 billion as of June 30, 2023.^4^ Capital expenditures totaled $26 million for the second quarter of 2023, compared to $82 million for the second quarter of 2022. Net debt position as of June 30, 2023, was $1,633 million compared to net cash position of $279 million as of December 31, 2022, a change of $1,912 million. ZIM’s net leverage ratio as of June 30, 2023, was 0.5x, compared to 0.0x as of December 31, 2022.
^4^ On April 4, 2023, the Company distributed a dividend to shareholders of $6.40 per share or a total of approximately $769 million.
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Use of Non-IFRS Measures in the Company’s 2023 Guidance
A reconciliation of the Company’s non-IFRS financial measures included in its full-year 2023 guidance to corresponding IFRS measures is not available on a forward-looking basis. In particular, the Company has not reconciled its Adjusted EBITDA and Adjusted EBIT because the various reconciling items between such non-IFRS financial measures and the corresponding IFRS measures cannot be determined without unreasonable effort due to the uncertainty regarding, and the potential variability of, the future costs and expenses for which the Company adjusts, the effect of which may be significant, and all of which are difficult to predict and are subject to frequent change.
Full-Year 2023 Guidance
As previously announced on July 12, 2023, the Company expects to generate Adjusted EBITDA of between $1.2 billion and $1.6 billion and Adjusted EBIT loss of $500 to $100 million. This guidance reflects continued weakness in freight rates across all the Company's trades, particularly in the Transpacific, which the Company expects to continue during the second half of 2023. Volume growth is also expected to be lower than originally forecasted, as demand continues to be subdued.
Dividend Policy and Second Quarter 2023 Dividend
ZIM’s dividend policy remains unchanged, according to which the Company intends to distribute 30-50% of annual net income as a dividend to shareholders. Dividend payments will be made on a quarterly basis at a rate of approximately 30% of the net quarterly income of the first three fiscal quarters of the year (cumulatively), while the total annual dividend amount to be distributed by the Company (including any interim dividends paid during the first three fiscal quarters of the year) will total 30-50% of the annual net income. All future dividends are subject to the Company’s Board discretion and to the restrictions provided by Israeli law.
In accordance with its dividend policy and in light of the net loss recorded in the second quarter of 2023, the Company will not distribute a dividend to shareholders on account of its second quarter results.
Conference Call Details
Management will host a conference call and webcast (along with a slide presentation) to review the results and provide a corporate update today at 8:00 AM ET.
To access the live conference call by telephone, please dial the following numbers: United States +1-800-715-9871 (toll free) or +1-646-307-1963; Israel +972-3-376-1144, UK/international +44-(0)20-3481-4247, and reference conference ID 8182738. The call (and slide presentation) will be available via live webcast through ZIM’s website, located at the following link. Following the conclusion of the call, a replay of the conference call will be available on the Company's website.
About ZIM
Founded in Israel in 1945, ZIM (NYSE: ZIM) is a leading global container liner shipping company with established operations in more than 90 countries serving approximately 34,000 customers in over 300 ports worldwide. ZIM leverages digital strategies and a commitment to ESG values to provide customers innovative seaborne transportation and logistics services and exceptional customer experience. ZIM's differentiated global-niche strategy, based on agile fleet management and deployment, covers major trade routes with a focus on select markets where the company holds competitive advantages. Additional information about ZIM is available at www.ZIM.com.
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Forward-Looking Statements
The following information contains, or may be deemed to contain forward-looking statements (as defined in the U.S. Private Securities Litigation Reform Act of 1995). In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions about the Company, may include projections of the Company’s future financial results, its anticipated growth strategies and anticipated trends in its business. These statements are only predictions based on the Company’s current expectations and projections about future events or results. There are important factors that could cause the Company’s actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause such differences include, but are not limited to: market changes in freight, bunker, charter and other rates or prices, supply-demand fluctuations in the containerized shipping market, new legislation or regulation affecting the Company’s operations, new competition and changes in the competitive environment, our ability to achieve cost savings or expense reductions, the outcome of legal proceedings to which the Company is a party, global, regional and/or local political instability, inflation rate fluctuations, capital markets fluctuations and other risks and uncertainties detailed from time to time in the Company’s filings with the U.S. Securities and Exchange Commission (SEC), including under the caption “Risk Factors” in its 2022 Annual Report filed with the SEC on March 13, 2023.
Although the Company believes the expectations reflected in the forward-looking statements contained herein are reasonable, it cannot guarantee future results, level of activity, performance or achievements. Moreover, neither the Company nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. The Company assumes no duty to update any of these forward-looking statements after the date hereof to conform its prior statements to actual results or revised expectations, except as otherwise required by law.
The Company prepares its financial statements in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB).
Use of Non-IFRS Financial Measures
The Company presents non-IFRS measures as additional performance measures as the Company believes that it enables the comparison of operating performance between periods on a consistent basis. These measures should not be considered in isolation, or as a substitute for operating income, any other performance measures, or cash flow data, which were prepared in accordance with Generally Accepted Accounting Principles as measures of profitability or liquidity. Please note that Adjusted EBITDA does not take into account debt service requirements, or other commitments, including capital expenditures, and therefore, does not necessarily indicate the amounts that may be available for the Company's use. In addition, the non-IFRS financial measures presented by the Company, may not be comparable to similarly titled measures reported by other companies, due to differences in the way these measures are calculated.
Adjusted EBITDA is a non-IFRS financial measure which we define as net income (loss) adjusted to exclude financial expenses (income), net, income taxes, depreciation and amortization in order to reach EBITDA, and further adjusted to exclude impairment of assets, non-cash charter hire expenses, capital gains (losses) beyond the ordinary course of business and expenses related to legal contingencies.
Adjusted EBIT is a non-IFRS financial measure which we define as net income (loss) adjusted to exclude financial expenses (income), net and income taxes, in order to reach our results from operating activities, or EBIT, and further adjusted to exclude impairment of assets, non-cash charter hire expenses, capital gains (losses) beyond the ordinary course of business and expenses related to legal contingencies.
Free cash flow is a non-IFRS financial measure which we define as net cash generated from operating activities minus capital expenditures, net.
Net debt is a non-IFRS financial measure which we define as face value of short- and long-term debt, minus cash and cash equivalents, bank deposits and other investment instruments. We refer to this measure as net cash when cash and cash equivalents, bank deposits and other investment instruments exceed the face value of short- and long-term debt.
Net leverage ratio is a non-IFRS financial measure which we define as net debt (see above) divided by Adjusted EBITDA for the last twelve-month period. When our net debt is less than zero, we report the net leverage ratio as zero.
See the reconciliation of net income to Adjusted EBITDA and Adjusted EBIT and net cash generated from operating activities to free cash flow in the tables provided below.
Investor Relations:
Elana Holzman
ZIM Integrated Shipping Services Ltd.
+972-4-865-2300
holzman.elana@zim.com
Leon Berman
The IGB Group
212-477-8438
lberman@igbir.com
Media:
Avner Shats
ZIM Integrated Shipping Services Ltd.
+972-4-865-2520
shats.avner@zim.com
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CONSOLIDATED BALANCE SHEET
\(U.S. dollars in millions\)
| June 30 | December 31 | |||||
|---|---|---|---|---|---|---|
| 2023 | 2022 | 2022 | ||||
| (Unaudited) | (Unaudited) | (Audited) | ||||
| Assets | ||||||
| Vessels | 5,005.4 | 4,405.3 | 4,409.9 | |||
| Containers and handling equipment | 1,209.8 | 1,281.4 | 1,242.8 | |||
| Other tangible assets | 124.3 | 77.7 | 98.5 | |||
| Intangible assets | 98.1 | 79.4 | 92.9 | |||
| Investments in associates | 29.3 | 17.8 | 22.0 | |||
| Other investments | 1,354.2 | 651.0 | 1,373.2 | |||
| Other receivables | 111.6 | 109.5 | 112.1 | |||
| Deferred tax assets | 2.5 | 2.3 | 2.3 | |||
| Total non-current assets | 7,935.2 | 6,624.4 | 7,353.7 | |||
| Inventories | 174.1 | 216.2 | 190.7 | |||
| Trade and other receivables | 671.0 | 1,346.2 | 825.7 | |||
| Other investments | 863.0 | 2,358.9 | 2,233.1 | |||
| Cash and cash equivalents | 1,040.3 | 946.8 | 1,022.1 | |||
| Total current assets | 2,748.4 | 4,868.1 | 4,271.6 | |||
| Total assets | 10,683.6 | 11,492.5 | 11,625.3 | |||
| Equity | ||||||
| Share capital and reserves | 1,994.8 | 2,010.6 | 1,987.7 | |||
| Retained earnings | 2,858.3 | 3,231.4 | 3,901.9 | |||
| Equity attributable to owners of the Company | 4,853.1 | 5,242.0 | 5,889.6 | |||
| Non-controlling interests | 2.0 | 6.2 | 6.3 | |||
| Total equity | 4,855.1 | 5,248.2 | 5,895.9 | |||
| Liabilities | ||||||
| Lease liabilities | 3,230.4 | 2,929.0 | 2,778.7 | |||
| Loans and other liabilities | 83.0 | 164.8 | 91.9 | |||
| Employee benefits | 42.4 | 50.0 | 45.2 | |||
| Deferred tax liabilities | 79.0 | 133.8 | 151.4 | |||
| Total non-current liabilities | 3,434.8 | 3,277.6 | 3,067.2 | |||
| Trade and other payables | 561.8 | 901.3 | 896.2 | |||
| Provisions | 53.4 | 30.8 | 50.2 | |||
| Contract liabilities | 208.4 | 577.5 | 238.9 | |||
| Lease liabilities | 1,522.1 | 1,377.2 | 1,380.8 | |||
| Loans and other liabilities | 48.0 | 79.9 | 96.1 | |||
| Total current liabilities | 2,393.7 | 2,966.7 | 2,662.2 | |||
| Total liabilities | 5,828.5 | 6,244.3 | 5,729.4 | |||
| Total equity and liabilities | 10,683.6 | 11,492.5 | 11,625.3 |
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CONSOLIDATED INCOME STATEMENTS
\(U.S. dollars in millions, except per share data\)
| Three Months Ended<br><br> June 30 | Year Ended<br><br> December 31 | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2023 | 2022 | 2022 | |||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Audited) | |||||||||||
| Income from voyages and related services | 2,683.9 | 7,145.2 | 1,309.6 | 3,428.8 | 12,561.6 | |||||||||
| Cost of voyages and related services | ||||||||||||||
| Operating expenses and cost of services | (1,913.6 | ) | (2,380.6 | ) | (973.9 | ) | (1,262.3 | ) | (4,764.5 | ) | ||||
| Depreciation | (795.4 | ) | (616.0 | ) | (414.9 | ) | (331.6 | ) | (1,370.3 | ) | ||||
| Gross profit (loss) | (25.1 | ) | 4,148.6 | (79.2 | ) | 1,834.9 | 6,426.8 | |||||||
| Other operating income | 1.9 | 19.3 | (8.2 | ) | 14.7 | 48.9 | ||||||||
| Other operating expenses | (10.1 | ) | (0.2 | ) | (6.5 | ) | (0.1 | ) | (0.9 | ) | ||||
| General and administrative expenses | (145.5 | ) | (162.0 | ) | (71.4 | ) | (84.9 | ) | (338.3 | ) | ||||
| Share of profit (loss) of associates | (2.9 | ) | 1.1 | (2.5 | ) | (0.3 | ) | (0.7 | ) | |||||
| Results from operating activities | (181.7 | ) | 4,006.8 | (167.8 | ) | 1,764.3 | 6,135.8 | |||||||
| Finance income | 82.1 | 47.4 | 37.7 | 26.0 | 130.9 | |||||||||
| Finance expenses | (237.2 | ) | (99.2 | ) | (142.0 | ) | (53.9 | ) | (239.4 | ) | ||||
| Net finance expenses | (155.1 | ) | (51.8 | ) | (104.3 | ) | (27.9 | ) | (108.5 | ) | ||||
| Profit (loss) before income taxes | (336.8 | ) | 3,955.0 | (272.1 | ) | 1,736.4 | 6,027.3 | |||||||
| Income taxes | 66.0 | (908.2 | ) | 59.4 | (400.6 | ) | (1,398.3 | ) | ||||||
| Profit (loss) for the period | (270.8 | ) | 3,046.8 | (212.7 | ) | 1,335.8 | 4,629.0 | |||||||
| Attributable to: | ||||||||||||||
| Owners of the Company | (274.6 | ) | 3,041.9 | (215.1 | ) | 1,333.1 | 4,619.4 | |||||||
| Non-controlling interests | 3.8 | 4.9 | 2.4 | 2.7 | 9.6 | |||||||||
| Profit (loss) for the period | (270.8 | ) | 3,046.8 | (212.7 | ) | 1,335.8 | 4,629.0 | |||||||
| Earnings (loss) per share (US) | ||||||||||||||
| Basic earnings (loss) per 1 ordinary share | (2.29 | ) | 25.36 | (1.79 | ) | 11.11 | 38.49 | |||||||
| Diluted earnings (loss) per 1 ordinary share | (2.29 | ) | 25.26 | (1.79 | ) | 11.07 | 38.35 | |||||||
| Weighted average number of shares for earnings (loss) per share calculation: | ||||||||||||||
| Basic | 120,182,399 | 119,950,718 | 120,195,365 | 119,990,308 | 120,012,375 | |||||||||
| Diluted | 120,182,399 | 120,441,961 | 120,195,365 | 120,442,213 | 120,444,889 |
All values are in US Dollars.
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CONSOLIDATED STATEMENTS OF CASH FLOWS
\(U.S. dollars in millions\)
| Six Months Ended<br><br> June 30 | Three Months Ended<br><br> June 30 | Year Ended<br><br> December 31 | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | 2022 | |||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (audited) | |||||||||||
| Cash flows from operating activities | |||||||||||||||
| Profit (loss) for the period | (270.8 | ) | 3,046.8 | (212.7 | ) | 1,335.8 | 4,629.0 | ||||||||
| Adjustments for: | |||||||||||||||
| Depreciation and amortization | 808.7 | 627.5 | 421.5 | 337.3 | 1,396.3 | ||||||||||
| Net finance expenses | 155.1 | 51.8 | 104.3 | 27.9 | 108.5 | ||||||||||
| Share of profits and change in fair value of investees | 2.2 | (3.7 | ) | 1.8 | (2.2 | ) | (2.1 | ) | |||||||
| Capital loss (gain), net | 7.4 | (15.8 | ) | 17.2 | (11.8 | ) | (42.7 | ) | |||||||
| Income taxes | (66.0 | ) | 908.2 | (59.4 | ) | 400.6 | 1,398.3 | ||||||||
| Other non-cash items | 9.7 | 10.0 | 3.4 | 7.5 | 39.7 | ||||||||||
| 646.3 | 4,624.8 | 276.1 | 2,095.1 | 7,527.0 | |||||||||||
| Change in inventories | 16.6 | (97.2 | ) | 15.0 | (42.4 | ) | (71.7 | ) | |||||||
| Change in trade and other receivables | 176.9 | (61.8 | ) | 33.7 | 34.5 | 496.6 | |||||||||
| Change in trade and other payables including contract liabilities | (95.9 | ) | 30.9 | (4.2 | ) | (5.1 | ) | (325.7 | ) | ||||||
| Change in provisions and employee benefits | 2.9 | (2.2 | ) | 1.5 | (0.1 | ) | 15.9 | ||||||||
| 100.5 | (130.3 | ) | 46.0 | (13.1 | ) | 115.1 | |||||||||
| Dividends received | 1.5 | 1.4 | 0.9 | ||||||||||||
| Interest received | 88.0 | 7.4 | 38.5 | 4.2 | 53.2 | ||||||||||
| Income taxes paid | (316.1 | ) | (1,132.0 | ) | (15.4 | ) | (376.3 | ) | (1,586.1 | ) | |||||
| Net cash generated from operating activities | 520.2 | 3,369.9 | 346.6 | 1,709.9 | 6,110.1 | ||||||||||
| Cash flows from investing activities | |||||||||||||||
| Proceeds from sale of tangible assets, intangible assets, and interest in investees | 17.7 | 16.9 | 5.5 | 11.6 | 48.1 | ||||||||||
| Acquisition and capitalized expenditures of tangible assets, intangible assets and interest in investees | (61.5 | ) | (263.1 | ) | (25.6 | ) | (80.6 | ) | (345.5 | ) | |||||
| Acquisition of investment instruments, net | (583.4 | ) | (515.9 | ) | (422.3 | ) | (333.0 | ) | (1,433.1 | ) | |||||
| Loans granted to investees | (1.7 | ) | |||||||||||||
| Change in other receivables | (14.0 | ) | (2.6 | ) | (5.8 | ) | (2.3 | ) | (20.2 | ) | |||||
| Change in other investments (mainly deposits), net | 1,982.7 | (189.1 | ) | 581.8 | (288.9 | ) | 105.7 | ||||||||
| Net cash generated from (used in) investing activities | 1,339.8 | (953.8 | ) | 133.6 | (693.2 | ) | (1,645.0 | ) | |||||||
| Cash flows from financing activities | |||||||||||||||
| Receipt of long-term loans and other long-term liabilities | 59.2 | 59.2 | |||||||||||||
| Repayment of lease liabilities and borrowings | (861.4 | ) | (532.5 | ) | (466.4 | ) | (323.6 | ) | (1,449.4 | ) | |||||
| Change in short term loans | (21.0 | ) | (53.5 | ) | (33.5 | ) | (53.5 | ) | |||||||
| Dividend paid to non-controlling interests | (7.5 | ) | (4.6 | ) | (0.6 | ) | (0.1 | ) | (8.4 | ) | |||||
| Dividend paid to owners of the Company | (769.2 | ) | (2,378.6 | ) | (769.2 | ) | (2,378.6 | ) | (3,303.3 | ) | |||||
| Interest paid | (182.7 | ) | (94.7 | ) | (95.9 | ) | (54.2 | ) | (221.0 | ) | |||||
| Net cash used in financing activities | (1,841.8 | ) | (3,004.7 | ) | (1,332.1 | ) | (2,790.0 | ) | (4,976.4 | ) | |||||
| Net change in cash and cash equivalents | 18.2 | (588.6 | ) | (851.9 | ) | (1,773.3 | ) | (511.3 | ) | ||||||
| Cash and cash equivalents at beginning of the period | 1,022.1 | 1,543.3 | 1,892.6 | 2,727.2 | 1,543.3 | ||||||||||
| Effect of exchange rate fluctuation on cash held | 0.0 | (7.9 | ) | (0.4 | ) | (7.1 | ) | (9.9 | ) | ||||||
| Cash and cash equivalents at the end of the period | 1,040.3 | 946.8 | 1,040.3 | 946.8 | 1,022.1 |
- 8 -
RECONCILIATION OF NET INCOME TO ADJUSTED EBIT
\(U.S. dollars in millions\)
| Six months ended<br><br> June 30 | Three months ended<br><br> June 30 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |||||||||
| Net income (loss) | (271 | ) | 3,047 | (213 | ) | 1,336 | ||||||
| Financial expenses, net | 155 | 52 | 104 | 28 | ||||||||
| Income taxes | (66 | ) | 908 | (59 | ) | 400 | ||||||
| Operating income (EBIT) | (182 | ) | 4,007 | (168 | ) | 1,764 | ||||||
| Non-cash charter hire expenses | 1 | 0 | 0 | 0 | ||||||||
| Capital loss (gain), beyond the ordinary course of business | 21 | (1 | ) | 21 | 0 | |||||||
| Adjusted EBIT | (160 | ) | 4,006 | (147 | ) | 1,764 | ||||||
| Adjusted EBIT margin | (6 | )% | 56 | % | (11 | )% | 51 | % |
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA
\(U.S. dollars in millions\)
| Six months ended<br><br> June 30 | Three months ended<br><br> June 30 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |||||||||
| Net income (loss) | (271 | ) | 3,047 | (213 | ) | 1,336 | ||||||
| Financial expenses, net | 155 | 52 | 104 | 28 | ||||||||
| Income taxes | (66 | ) | 908 | (59 | ) | 400 | ||||||
| Depreciation and amortization | 809 | 627 | 422 | 337 | ||||||||
| EBITDA | 627 | 4,634 | 254 | 2,101 | ||||||||
| Capital loss, beyond the ordinary course of business | 21 | 0 | 21 | 0 | ||||||||
| Adjusted EBITDA | 648 | 4,634 | 275 | 2,101 | ||||||||
| Adjusted EBITDA margin | 24 | % | 65 | % | 21 | % | 61 | % |
RECONCILIATION OF NET CASH GENERATED FROM OPERATING ACTIVITIES TO FREE CASH FLOW
\(U.S. dollars in millions\)
| Six months ended<br><br> June 30 | Three months ended<br><br> June 30 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |||||||||
| Net cash generated from operating activities | 520 | 3,370 | 347 | 1,710 | ||||||||
| Capital expenditures, net | (57 | ) | (248 | ) | (26 | ) | (71 | ) | ||||
| Free cash flow | 463 | 3,122 | 321 | 1,639 |
- 9 -
Exhibit 99.2
ZIM INTEGRATED SHIPPING SERVICES LTD.
CONDENSED CONSOLIDATED UNAUDITED INTERIM
FINANCIAL STATEMENTS
JUNE 30, 2023
ZIM INTEGRATED SHIPPING SERVICES LTD.
INDEX TO CONDENSED CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS
| Page | |
|---|---|
| FINANCIAL STATEMENTS: | |
| --- | --- |
| Condensed consolidated unaudited interim Statements of Financial Position | 3 |
| Condensed consolidated unaudited interim Income Statements | 4 |
| Condensed consolidated unaudited interim Statements of Comprehensive Income | 5 |
| Condensed consolidated unaudited interim Statements of Changes in Equity | 6-7 |
| Condensed consolidated unaudited interim Statements of Cash Flows | 8-9 |
| Notes to the condensed consolidated unaudited interim Financial Statements | 10-16 |
2
ZIM INTEGRATED SHIPPING SERVICES LTD.
CONDENSED CONSOLIDATED UNAUDITED INTERIM STATEMENTS OF FINANCIAL POSITION
| June 30 | December 31 | ||||||
|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2022 | |||||
| Note | US in millions | ||||||
| Assets | |||||||
| Vessels | 6 | 4,405.3 | 4,409.9 | ||||
| Containers and handling equipment | 6 | 1,281.4 | 1,242.8 | ||||
| Other tangible assets | 6 | 77.7 | 98.5 | ||||
| Intangible assets | 79.4 | 92.9 | |||||
| Investments in associates | 17.8 | 22.0 | |||||
| Other investments | 651.0 | 1,373.2 | |||||
| Other receivables | 109.5 | 112.1 | |||||
| Deferred tax assets | 2.3 | 2.3 | |||||
| Total non-current assets | 6,624.4 | 7,353.7 | |||||
| Inventories | 216.2 | 190.7 | |||||
| Trade and other receivables | 1,346.2 | 825.7 | |||||
| Other investments | 2,358.9 | 2,233.1 | |||||
| Cash and cash equivalents | 946.8 | 1,022.1 | |||||
| Total current assets | 4,868.1 | 4,271.6 | |||||
| Total assets | 11,492.5 | 11,625.3 | |||||
| Equity | |||||||
| Share capital and reserves | 5 | 2,010.6 | 1,987.7 | ||||
| Retained earnings | 3,231.4 | 3,901.9 | |||||
| Equity attributable to owners of the Company | 5,242.0 | 5,889.6 | |||||
| Non-controlling interests | 6.2 | 6.3 | |||||
| Total equity | 5,248.2 | 5,895.9 | |||||
| Liabilities | |||||||
| Lease liabilities | 2,929.0 | 2,778.7 | |||||
| Loans and other liabilities | 164.8 | 91.9 | |||||
| Employee benefits | 50.0 | 45.2 | |||||
| Deferred tax liabilities | 133.8 | 151.4 | |||||
| Total non-current liabilities | 3,277.6 | 3,067.2 | |||||
| Trade and other payables | 4(b) | 901.3 | 896.2 | ||||
| Provisions | 30.8 | 50.2 | |||||
| Contract liabilities | 577.5 | 238.9 | |||||
| Lease liabilities | 1,377.2 | 1,380.8 | |||||
| Loans and other liabilities | 79.9 | 96.1 | |||||
| Total current liabilities | 2,966.7 | 2,662.2 | |||||
| Total liabilities | 6,244.3 | 5,729.4 | |||||
| Total equity and liabilities | 11,492.5 | 11,625.3 |
All values are in US Dollars.
| /s/ Yair Seroussi | /s/ Eli Glickman | /s/ Xavier Destriau |
|---|---|---|
| Yair Seroussi | Eli Glickman | Xavier Destriau |
| Chairman of the Board of Directors | President & Chief Executive Officer | Chief Financial Officer |
Date of approval of the Financial Statements: August 16, 2023.
The accompanying Notes are an integral part of these condensed consolidated unaudited interim Financial Statements.
3
ZIM INTEGRATED SHIPPING SERVICES LTD.
CONDENSED CONSOLIDATED UNAUDITED INTERIM INCOME STATEMENTS
| Six months ended<br> June 30 | Three months ended<br><br> <br>June 30 | Year ended December 31 | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | 2022 | |||||||||||
| US in millions | |||||||||||||||
| Income from voyages and related services | 7,145.2 | 1,309.6 | 3,428.8 | 12,561.6 | |||||||||||
| Cost of voyages and related services | |||||||||||||||
| Operating expenses and cost of services | 8 | ) | (2,380.6 | ) | (973.9 | ) | (1,262.3 | ) | (4,764.5 | ) | |||||
| Depreciation | ) | (616.0 | ) | (414.9 | ) | (331.6 | ) | (1,370.3 | ) | ||||||
| Gross profit (loss) | ) | 4,148.6 | (79.2 | ) | 1,834.9 | 6,426.8 | |||||||||
| Other operating income | 19.3 | (8.2 | ) | 14.7 | 48.9 | ||||||||||
| Other operating expenses | ) | (0.2 | ) | (6.5 | ) | (0.1 | ) | (0.9 | ) | ||||||
| General and administrative expenses | ) | (162.0 | ) | (71.4 | ) | (84.9 | ) | (338.3 | ) | ||||||
| Share of profit (loss) of associates | ) | 1.1 | (2.5 | ) | (0.3 | ) | (0.7 | ) | |||||||
| Results from operating activities | ) | 4,006.8 | (167.8 | ) | 1,764.3 | 6,135.8 | |||||||||
| Finance income | 47.4 | 37.7 | 26.0 | 130.9 | |||||||||||
| Finance expenses | ) | (99.2 | ) | (142.0 | ) | (53.9 | ) | (239.4 | ) | ||||||
| Net finance expenses | ) | (51.8 | ) | (104.3 | ) | (27.9 | ) | (108.5 | ) | ||||||
| Profit (loss) before income taxes | ) | 3,955.0 | (272.1 | ) | 1,736.4 | 6,027.3 | |||||||||
| Income taxes | (908.2 | ) | 59.4 | (400.6 | ) | (1,398.3 | ) | ||||||||
| Profit (loss) for the period | ) | 3,046.8 | (212.7 | ) | 1,335.8 | 4,629.0 | |||||||||
| Attributable to: | |||||||||||||||
| Owners of the Company | ) | 3,041.9 | (215.1 | ) | 1,333.1 | 4,619.4 | |||||||||
| Non-controlling interests | 4.9 | 2.4 | 2.7 | 9.6 | |||||||||||
| Profit (loss) for the period | ) | 3,046.8 | (212.7 | ) | 1,335.8 | 4,629.0 | |||||||||
| Earnings (loss) per share (US) | |||||||||||||||
| Basic earnings (loss) per 1 ordinary share | 10 | ) | 25.36 | (1.79 | ) | 11.11 | 38.49 | ||||||||
| Diluted earnings (loss) per 1 ordinary share | 10 | ) | 25.26 | (1.79 | ) | 11.07 | 38.35 |
All values are in US Dollars.
The accompanying Notes are an integral part of these condensed consolidated unaudited interim Financial Statements.
4
ZIM INTEGRATED SHIPPING SERVICES LTD.
CONDENSED CONSOLIDATED UNAUDITED INTERIM STATEMENTS OF COMPREHENSIVE INCOME
| Six months ended<br> June 30 | Three months ended<br><br> <br>June 30 | Year ended December 31 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | 2022 | ||||||||||
| US in millions | ||||||||||||||
| Profit (loss) for the period | ) | 3,046.8 | (212.7 | ) | 1,335.8 | 4,629.0 | ||||||||
| Other components of comprehensive income | ||||||||||||||
| Items of other comprehensive income that were or will be reclassified to profit and loss | ||||||||||||||
| Foreign currency translation differences | ||||||||||||||
| for foreign operations | ) | (12.4 | ) | (6.6 | ) | (7.4 | ) | (18.0 | ) | |||||
| Net change in fair value of investments in debt instruments at fair value through other comprehensive income, net of tax | ) | (12.1 | ) | (14.1 | ) | (4.8 | ) | (34.6 | ) | |||||
| Net change in fair value of investments in debt instruments at fair value through other comprehensive income, reclassified to profit and loss | 2.4 | 2.6 | ||||||||||||
| Items of other comprehensive income that would never be reclassified to profit and loss | ||||||||||||||
| Net change in fair value of investments in equity instruments at fair value through other comprehensive income, net of tax | (1.5 | ) | 0.2 | (1.7 | ) | (1.9 | ) | |||||||
| Defined benefit pension plans actuarial gains, net of tax | 4.4 | (0.5 | ) | 0.5 | 8.5 | |||||||||
| Other comprehensive income for the period, net of tax | ) | (21.6 | ) | (18.6 | ) | (13.4 | ) | (43.4 | ) | |||||
| Total comprehensive income for the period | ) | 3,025.2 | (231.3 | ) | 1,322.4 | 4,585.6 | ||||||||
| Attributable to: | ||||||||||||||
| Owners of the Company | ) | 3,021.9 | (232.8 | ) | 1,320.4 | 4,578.2 | ||||||||
| Non-controlling interests | 3.3 | 1.5 | 2.0 | 7.4 | ||||||||||
| Total comprehensive income for the period | ) | 3,025.2 | (231.3 | ) | 1,322.4 | 4,585.6 |
All values are in US Dollars.
The accompanying Notes are an integral part of these condensed consolidated unaudited interim Financial Statements.
5
ZIM INTEGRATED SHIPPING SERVICES LTD.
CONDENSED CONSOLIDATED UNAUDITED INTERIM STATEMENTS OF CHANGES IN EQUITY
| Attribute to the owners of the Company | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Share<br> capital | General<br><br> <br>reserves (*) | Translation<br><br> <br>reserve | Retained<br><br> <br>earnings | Total | Non-controlling<br><br> <br>interests | Total<br><br> <br>equity | |||||||||||||
| US in millions | |||||||||||||||||||
| For the six months period ended June 30, 2023 | |||||||||||||||||||
| Balance at December 31, 2022 | 1,097.3 | (35.5 | ) | 3,901.9 | 5,889.6 | 6.3 | 5,895.9 | ||||||||||||
| Loss for the period | (274.6 | ) | (274.6 | ) | 3.8 | (270.8 | ) | ||||||||||||
| Other comprehensive income for the period, net of tax | 1.1 | (5.1 | ) | 0.2 | (3.8 | ) | (0.6 | ) | (4.4 | ) | |||||||||
| Share-based compensation | 11.1 | 11.1 | 11.1 | ||||||||||||||||
| Exercise of options | (0.4 | ) | |||||||||||||||||
| Dividend to owners of the Company | (769.2 | ) | (769.2 | ) | (769.2 | ) | |||||||||||||
| Dividend to non-controlling interests in subsidiaries | (7.5 | ) | (7.5 | ) | |||||||||||||||
| Balance at June 30, 2023 | 1,109.1 | (40.6 | ) | 2,858.3 | 4,853.1 | 2.0 | 4,855.1 | ||||||||||||
| For the three months period ended June 30, 2023 | |||||||||||||||||||
| Balance at March 31, 2023 | 1,116.6 | (34.8 | ) | 3,073.8 | 5,081.7 | 1.1 | 5,082.8 | ||||||||||||
| Loss for the period | (215.1 | ) | (215.1 | ) | 2.4 | (212.7 | ) | ||||||||||||
| Other comprehensive income for the period, net of tax | (11.5 | ) | (5.8 | ) | (0.4 | ) | (17.7 | ) | (0.9 | ) | (18.6 | ) | |||||||
| Share-based compensation | 4.2 | 4.2 | 4.2 | ||||||||||||||||
| Exercise of options | (0.2 | ) | |||||||||||||||||
| Dividend to non-controlling interests in subsidiaries | (0.6 | ) | (0.6 | ) | |||||||||||||||
| Balance at June 30, 2023 | 1,109.1 | (40.6 | ) | 2,858.3 | 4,853.1 | 2.0 | 4,855.1 |
All values are in US Dollars.
(*) Include reserves related to transactions with an interested party, share-based compensation and changes in fair value of investment instruments.
The accompanying Notes are an integral part of these condensed consolidated unaudited interim Financial Statements.
6
ZIM INTEGRATED SHIPPING SERVICES LTD.
CONDENSED CONSOLIDATED UNAUDITED INTERIM STATEMENTS OF CHANGES IN EQUITY
| Attribute to the owners of the Company | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Share<br> capital | General<br><br> <br>reserves (*) | Translation<br><br> <br>reserve | Retained<br><br> <br>earnings | Total | Non-controlling<br><br> <br>interests | Total<br><br> <br>equity | |||||||||||||
| US in millions | |||||||||||||||||||
| For the six months period ended June 30, 2022 | |||||||||||||||||||
| Balance at December 31, 2021 | 1,107.9 | (19.7 | ) | 2,580.6 | 4,592.0 | 7.5 | 4,599.5 | ||||||||||||
| Initial application of an amendment to IAS 37 (*) | (3.3 | ) | (3.3 | ) | (3.3 | ) | |||||||||||||
| Balance at January 1, 2022 | 1,107.9 | (19.7 | ) | 2,577.3 | 4,588.7 | 7.5 | 4,596.2 | ||||||||||||
| Profit for the period | 3,041.9 | 3,041.9 | 4.9 | 3,046.8 | |||||||||||||||
| Other comprehensive income for the period, net of tax | (10.8 | ) | (9.2 | ) | (20.0 | ) | (1.6 | ) | (21.6 | ) | |||||||||
| Share-based compensation | 10.0 | 10.0 | 10.0 | ||||||||||||||||
| Exercise of options | (2.2 | ) | |||||||||||||||||
| Dividend to owners of the Company | (2,378.6 | ) | (2,378.6 | ) | (2,378.6 | ) | |||||||||||||
| Dividend to non-controlling interests in subsidiaries | (4.6 | ) | (4.6 | ) | |||||||||||||||
| Balance June 30, 2022 | 1,115.7 | (30.5 | ) | 3,231.4 | 5,242.0 | 6.2 | 5,248.2 | ||||||||||||
| For the three months period ended June 30, 2022 | |||||||||||||||||||
| Balance at March 31, 2022 | 1,109.3 | (23.8 | ) | 2,246.1 | 4,255.9 | 4.3 | 4,260.2 | ||||||||||||
| Profit for the period | 1,333.1 | 1,333.1 | 2.7 | 1,335.8 | |||||||||||||||
| Other comprehensive income for the period, net of tax | (6.7 | ) | (6.0 | ) | (12.7 | ) | (0.7 | ) | (13.4 | ) | |||||||||
| Share-based compensation | 7.5 | 7.5 | 7.5 | ||||||||||||||||
| Exercise of options | (1.1 | ) | |||||||||||||||||
| Dividend to owners of the Company | (341.8 | ) | (341.8 | ) | (341.8 | ) | |||||||||||||
| Dividend to non-controlling interests in subsidiaries | (0.1 | ) | (0.1 | ) | |||||||||||||||
| Balance at June 30, 2022 | 1,115.7 | (30.5 | ) | 3,231.4 | 5,242.0 | 6.2 | 5,248.2 | ||||||||||||
| For the year ended December 31, 2022 | |||||||||||||||||||
| Balance at December 31, 2021 | 1,107.9 | (19.7 | ) | 2,580.6 | 4,592.0 | 7.5 | 4,599.5 | ||||||||||||
| Initial application of amendment to IAS 37 | (3.3 | ) | (3.3 | ) | (3.3 | ) | |||||||||||||
| Balance at January 1, 2022 | 1,107.9 | (19.7 | ) | 2,577.3 | 4,588.7 | 7.5 | 4,596.2 | ||||||||||||
| Profit for the year | 4,619.4 | 4,619.4 | 9.6 | 4,629.0 | |||||||||||||||
| Other comprehensive income for the year, net of tax | (33.9 | ) | (15.8 | ) | 8.5 | (41.2 | ) | (2.2 | ) | (43.4 | ) | ||||||||
| Exercise of options | (2.7 | ) | |||||||||||||||||
| Share-based compensation | 25.8 | 25.8 | 25.8 | ||||||||||||||||
| Dividend to owners of the Company | (3,303.3 | ) | (3,303.3 | ) | (3,303.3 | ) | |||||||||||||
| Acquisition of subsidiary with non-controlling interest | 0.2 | 0.2 | (0.2 | ) | |||||||||||||||
| Dividend to non-controlling interests in subsidiaries | (8.4 | ) | (8.4 | ) | |||||||||||||||
| Balance at December 31, 2022 | 1,097.3 | (35.5 | ) | 3,901.9 | 5,889.6 | 6.3 | 5,895.9 |
All values are in US Dollars.
(*) Include reserves related to transactions with an interested party, share-based compensation and changes in fair value of investment instruments.
The accompanying Notes are an integral part of these condensed consolidated unaudited interim Financial Statements.
7
ZIM INTEGRATED SHIPPING SERVICES LTD.
CONDENSED CONSOLIDATED UNAUDITED INTERIM STATEMENTS OF CASH FLOWS
| Six months ended | Three months ended | Year ended | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30 | June 30 | Dec 31 | ||||||||||||
| 2023 | 2022 | 2023 | 2022 | 2022 | ||||||||||
| US in millions | ||||||||||||||
| Cash flows from operating activities | ||||||||||||||
| Profit (loss) for the period | ) | 3,046.8 | (212.7 | ) | 1,335.8 | 4,629.0 | ||||||||
| Adjustments for: | ||||||||||||||
| Depreciation and amortization | 627.5 | 421.5 | 337.3 | 1,396.3 | ||||||||||
| Net finance expenses | 51.8 | 104.3 | 27.9 | 108.5 | ||||||||||
| Share of profits and change in fair value of investees | (3.7 | ) | 1.8 | (2.2 | ) | (2.1 | ) | |||||||
| Capital loss (gain), net | (15.8 | ) | 17.2 | (11.8 | ) | (42.7 | ) | |||||||
| Income taxes | ) | 908.2 | (59.4 | ) | 400.6 | 1,398.3 | ||||||||
| Other non-cash items | 10.0 | 3.4 | 7.5 | 39.7 | ||||||||||
| 4,624.8 | 276.1 | 2,095.1 | 7,527.0 | |||||||||||
| Change in inventories | (97.2 | ) | 15.0 | (42.4 | ) | (71.7 | ) | |||||||
| Change in trade and other receivables | (61.8 | ) | 33.7 | 34.5 | 496.6 | |||||||||
| Change in trade and other payables including contract liabilities | ) | 30.9 | (4.2 | ) | (5.1 | ) | (325.7 | ) | ||||||
| Change in provisions and employee benefits | (2.2 | ) | 1.5 | (0.1 | ) | 15.9 | ||||||||
| (130.3 | ) | 46.0 | (13.1 | ) | 115.1 | |||||||||
| Dividends received | 1.4 | 0.9 | ||||||||||||
| Interest received | 7.4 | 38.5 | 4.2 | 53.2 | ||||||||||
| Income taxes paid | ) | (1,132.0 | ) | (15.4 | ) | (376.3 | ) | (1,586.1 | ) | |||||
| Net cash generated from operating activities | 3,369.9 | 346.6 | 1,709.9 | 6,110.1 | ||||||||||
| Cash flows from investing activities | ||||||||||||||
| Proceeds from sale of tangible assets, intangible assets, and interest in investees | 16.9 | 5.5 | 11.6 | 48.1 | ||||||||||
| Acquisition and capitalized expenditures of tangible assets, intangible assets and interest in investees | ) | (263.1 | ) | (25.6 | ) | (80.6 | ) | (345.5 | ) | |||||
| Acquisition of investment instruments, net | ) | (515.9 | ) | (422.3 | ) | (333.0 | ) | (1,433.1 | ) | |||||
| Loans granted to investees | ) | |||||||||||||
| Change in other receivables | ) | (2.6 | ) | (5.8 | ) | (2.3 | ) | (20.2 | ) | |||||
| Change in other investments (mainly deposits), net | (189.1 | ) | 581.8 | (288.9 | ) | 105.7 | ||||||||
| Net cash generated from (used in) investing activities | (953.8 | ) | 133.6 | (693.2 | ) | (1,645.0 | ) |
All values are in US Dollars.
The accompanying Notes are an integral part of these condensed consolidated unaudited interim Financial Statements.
8
ZIM INTEGRATED SHIPPING SERVICES LTD.
CONDENSED CONSOLIDATED UNAUDITED INTERIM STATEMENTS OF CASH FLOWS
| Six months ended | Three months ended | Year ended | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30 | June 30 | Dec 31 | ||||||||||||
| 2023 | 2022 | 2023 | 2022 | 2022 | ||||||||||
| US in millions | ||||||||||||||
| Cash flows from financing activities | ||||||||||||||
| Receipt of long-term loans and other long-term liabilities | 59.2 | 59.2 | ||||||||||||
| Repayment of lease liabilities and borrowings | ) | (532.5 | ) | (466.4 | ) | (323.6 | ) | (1,449.4 | ) | |||||
| Change in short term loans | ) | (53.5 | ) | (33.5 | ) | (53.5 | ) | |||||||
| Dividend paid to non-controlling interests | ) | (4.6 | ) | (0.6 | ) | (0.1 | ) | (8.4 | ) | |||||
| Dividend paid to owners of the Company | ) | (2,378.6 | ) | (769.2 | ) | (2,378.6 | ) | (3,303.3 | ) | |||||
| Interest paid | ) | (94.7 | ) | (95.9 | ) | (54.2 | ) | (221.0 | ) | |||||
| Net cash used in financing activities | ) | (3,004.7 | ) | (1,332.1 | ) | (2,790.0 | ) | (4,976.4 | ) | |||||
| Net change in cash and cash equivalents | (588.6 | ) | (851.9 | ) | (1,773.3 | ) | (511.3 | ) | ||||||
| Cash and cash equivalents at beginning of the period | 1,543.3 | 1,892.6 | 2,727.2 | 1,543.3 | ||||||||||
| Effect of exchange rate fluctuation on cash held | (7.9 | ) | (0.4 | ) | (7.1 | ) | (9.9 | ) | ||||||
| Cash and cash equivalents at the end of the period | 946.8 | 1,040.3 | 946.8 | 1,022.1 |
All values are in US Dollars.
The accompanying Notes are an integral part of these condensed consolidated unaudited interim Financial Statements.
9
ZIM INTEGRATED SHIPPING SERVICES LTD.
NOTES TO THE CONDENSED CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS
| 1 | Reporting entity |
|---|
ZIM Integrated Shipping Services Ltd. (hereinafter - the "Company" or "ZIM") and its subsidiaries (hereinafter – "the Group" or "the Companies") and the Group’s interests in associates, operate in the field of container shipping and related services.
ZIM is a company incorporated in Israel, with limited liability. ZIM’s ordinary shares have been listed on the New York Stock Exchange (the “NYSE”) under the symbol “ZIM” on January 28, 2021. The address of the Company’s registered office is 9 Andrei Sakharov Street, Haifa, Israel.
| 2 | Basis of compliance |
|---|---|
| (a) | Statement of compliance |
| --- | --- |
These condensed consolidated unaudited interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Company as at and for the year ended December 31, 2022 (hereafter – the “annual Financial Statements”). These condensed consolidated unaudited interim Financial Statements were approved by the Board of Directors on August 16, 2023.
| (b) | Estimates |
|---|
The preparation of Financial Statements in conformity with IFRSs requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The significant judgments made by management in applying the Group’s accounting policies and the principal assumptions used in the estimation of uncertainty were the same as those applied to the annual financial statements.
| 3 | Significant accounting policies |
|---|
The accounting policies applied by the Group in these unaudited condensed consolidated interim Financial Statements are the same as those applied by the Group in its annual Financial Statements.
10
ZIM INTEGRATED SHIPPING SERVICES LTD.
NOTES TO THE CONDENSED CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS
| 4 | Financial position |
|---|---|
| (a) | The container shipping industry continues to be characterized by volatility in freight rates, charter rates and bunker prices, accompanied by continuing uncertainties in the global<br> trade (including ongoing inflation and the rise of interest rates in certain countries, the implications of the ongoing military conflict between Russia and Ukraine and other geopolitical challenges). In addition, regulators in certain<br> jurisdictions (mainly in the U.S) have become more active in their regulatory oversight over our industry, through change in regulations and interpretation of related rules. |
| --- | --- |
Following the peak levels reached during 2021 and the first quarter of 2022, freight rates have decreased in most trades throughout the remainder of the year 2022 and continued to further decrease during the first half of 2023.
In view of the aforementioned business environment and in order to constantly improve the Group’s results of operations and liquidity position, Management continues to optimize its network by considering, and when appropriate, implementing structural changes, participating in partnerships and cooperation agreements and by upgrading its customer’s offerings, whilst seeking operational excellence and cost efficiencies.
At each reporting date, the Company reviews the carrying amount of its operating assets and assesses them for impairment when indications exist.
As of June 30, 2023, the Company tested for impairment its cash-generating-unit, which consist of all of its operating assets, using similar estimation methods to those applied as of December 31, 2022 (see also Note 6 to the Company’s 2022 annual financial statements) and updated projections considering current market conditions. The test resulted with no impairment to be recognized.
| (b) | In April 2023, further to the approval by the Company’s Board of Directors in March 2023, the Company distributed a dividend in an amount of US$ 769 million, reflecting US$ 6.40 per<br> ordinary share. |
|---|---|
| (c) | In the second quarter of 2023, further to an expiration of related repurchase options, the Company concluded that certain vessels, which were<br> previously subject to a sale and lease back transaction accounted as a secured borrowing, will be redelivered on lease maturity. Accordingly, the Company recorded US$ 46 million as a financial expense for remeasurement of the related<br> liability and US$ 21 million as a capital loss for derecognizing such liability and the related vessels (both with no cash impact). |
| --- | --- |
11
ZIM INTEGRATED SHIPPING SERVICES LTD.
NOTES TO THE CONDENSED CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS
| 4 | Financial position (cont’d) |
|---|---|
| (d) | Charter agreements: |
| --- | --- |
Further to the Company’s long-term agreement with Seaspan for the chartering of ten 15,000 TEU new-build liquefied natural gas (LNG) dual-fuel vessels, four of such vessels were delivered to the Company, commencing 2023.
Additional vessels related to this agreement, as well as to other chartering agreements the Company entered into during 2021 and 2022, are scheduled to be delivered to the Company during 2023 and 2024 (see also Notes 1(b) and 26 to the Company’s 2022 annual financial statements).
| (e) | In 2020, a regulator in a certain jurisdiction decided to exclude a wholly-owned subsidiary of the Company from an industry-related competition law investigation, initiated earlier in<br> that year. In June 2023, a local court accepted an appeal on the decision to exclude this Company subsidiary from the said investigation, which is expected to be re-launched. At this preliminary stage, based on the opinion of the Company’s<br> legal advisors, the outcome of this matter cannot be assessed. |
|---|---|
| (f) | In June 2023 the Company (and its wholly owned digital freight forwarded subsidiary, Ship4WD) entered into an agreement with a factoring service provider, for the recurring sale of<br> receivables, as part of the Company's initiatives to provide its customers with additional services, including trade credit. The sale of the receivables under this arrangement meets the conditions for derecognition of financial assets as<br> prescribed in IFRS 9. |
| --- | --- |
Earlier this year, the Company entered into a transaction with this factoring service provider according to which the Company made an equity investment in this entity and agreed to provide it a three-year revolving credit facility, secured by account receivables, of approximately $100 million. According to the terms, the Company will be entitled to exercise warrants to the factoring service provider preferred shares in trenches, based on amounts drawn. As of the issuance date of these financial statements, no amounts were drawn under this arrangement.
12
ZIM INTEGRATED SHIPPING SERVICES LTD.
NOTES TO THE CONDENSED CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS
| 5 | Capital and reserves<br><br> <br><br><br> <br>Share-Based Payment Arrangements<br><br> <br><br><br> <br>During the six and three-month period ended June 30, 2023, a total of 68,354 and 34,177 ordinary shares were issued, respectively, upon the cashless exercise of<br> options, previously granted in respect of share-based payment arrangements.<br><br> <br><br><br> <br>During the six and three-month period ended June 30, 2023, 2022 and the year ended December 31, 2022, the Company recorded expenses related to share-based<br> compensation arrangements of US$ 11.1 million, US$ 4.2 million, US$ 10.0 million, US$ 7.5 million and US$ 25.8 million, respectively.<br><br> <br><br><br> <br>In August 2023, the Company’s Board of Directors approved the grant of 80,868 options to the Company’s ordinary shares, to certain officers and employees. | ||||
|---|---|---|---|---|---|
| 6 | Right-of-use assets | ||||
| --- | --- | ||||
| Balance at <br> June 30 | Balance at December 31 | ||||
| --- | --- | --- | --- | --- | --- |
| 2023 | 2022 | 2022 | |||
| US in millions | |||||
| Vessels | 3,949.4 | 3,967.3 | |||
| Containers and handling equipment | 418.4 | 380.0 | |||
| Other tangible assets | 52.3 | 58.0 | |||
| 4,420.1 | 4,405.3 |
All values are in US Dollars.
| 7 | Segment information |
|---|
ZIM is managed as one operating unit, generating revenues from operating a global liner service network of cargo shipping and related services, in which lines share the use of its resources and their performance are co-dependent. Accordingly, the chief operating decision maker manages and allocates resources to the entire liner network. As there is no appropriate allocation for the Group’s results, assets and liabilities, these are all attributed to the Group’s sole operating segment.
Freight revenues are disaggregated geographically by trade zone, as follows:
| Six months ended June 30 | Three months ended June 30 | Year ended December 31 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | 2022 | |||||
| US in millions | |||||||||
| Freight Revenues from containerized cargo: | |||||||||
| Pacific | 3,296.7 | 452.4 | 1,571.3 | 5,504.2 | |||||
| Cross-Suez | 914.6 | 151.7 | 441.9 | 1,528.5 | |||||
| Atlantic | 661.6 | 161.4 | 331.8 | 1,231.3 | |||||
| Intra-Asia | 1,143.4 | 158.3 | 546.4 | 1,945.9 | |||||
| Latin America | 366.5 | 102.8 | 186.8 | 742.3 | |||||
| 6,382.8 | 1,026.6 | 3,078.2 | 10,952.2 | ||||||
| Other Revenues (*) | 762.4 | 283.0 | 350.6 | 1,609.4 | |||||
| 7,145.2 | 1,309.6 | 3,428.8 | 12,561.6 |
All values are in US Dollars.
(*) Mainly related to non-containerized cargo, demurrage and value-added services.
13
ZIM INTEGRATED SHIPPING SERVICES LTD.
NOTES TO THE CONDENSED CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS
| 8 | Operating expenses and cost of services | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Six months ended<br> June 30 | Three months ended<br><br> <br>June 30 | Year ended<br><br> <br>December 31 | |||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2023 | 2022 | 2023 | 2022 | 2022 | |||||
| US in millions | |||||||||
| Wages, maintenance and other vessel-operating costs | 16.1 | 8.7 | 9.3 | 34.5 | |||||
| Expenses relating to fleet equipment (mainly containers and chassis) | 15.2 | 7.7 | 7.9 | 29.1 | |||||
| Bunker and lubricants | 646.5 | 281.4 | 384.7 | 1,434.8 | |||||
| Insurance | 6.2 | 5.3 | 4.1 | 15.2 | |||||
| Expenses related to cargo handling | 1,014.3 | 424.2 | 529.9 | 1,981.6 | |||||
| Port expenses | 155.2 | 137.5 | 84.6 | 359.0 | |||||
| Agents’ salaries and commissions | 130.8 | 53.8 | 70.3 | 261.1 | |||||
| Cost of related services and sundry | 108.9 | 32.4 | 44.2 | 216.1 | |||||
| Slot purchases and hire of vessels | 270.4 | 17.0 | 119.5 | 398.8 | |||||
| Hire of containers | 17.0 | 5.9 | 7.8 | 34.3 | |||||
| 2,380.6 | 973.9 | 1,262.3 | 4,764.5 |
All values are in US Dollars.
14
ZIM INTEGRATED SHIPPING SERVICES LTD.
NOTES TO THE CONDENSED CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS
| 9 | Financial instruments |
|---|
Financial instruments measured at fair value
| Balance at June 30, | Balance at December 31, | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2022 | |||||||||||||||||||
| US in millions | |||||||||||||||||||||
| Level 1 | Level 3 | Total | Level 1 | Level 3 | Total | Level 1 | Level 3 | Total | |||||||||||||
| Fair value through profit and loss | |||||||||||||||||||||
| Cash and cash equivalents: | |||||||||||||||||||||
| Money markets instruments | 418.0 | ||||||||||||||||||||
| Other investments: | |||||||||||||||||||||
| Equity instruments | 10.7 | 10.7 | 7.8 | 7.8 | 11.2 | 11.2 | |||||||||||||||
| Loans and other liabilities: | |||||||||||||||||||||
| Derivative instruments | (12.3 | ) | (12.3 | ) | (13.7 | ) | (13.7 | ) | |||||||||||||
| Fair value through other comprehensive income | |||||||||||||||||||||
| Other investments: | |||||||||||||||||||||
| Sovereign bonds | 1,122.4 | 226.3 | 226.3 | 893.5 | 893.5 | ||||||||||||||||
| Corporate bonds | 1,034.5 | 436.9 | 436.9 | 637.7 | 637.7 | ||||||||||||||||
| Equity instruments | 2.0 | 23.0 | 23.0 | 42.2 | 42.2 |
All values are in US Dollars.
Financial instruments not measured at fair value
The carrying amounts of the Group’s financial assets and liabilities, including cash and cash equivalents, trade and other receivables, other investments, trade and other payables and loans and other liabilities, reflect reasonable approximation of their fair value.
15
ZIM INTEGRATED SHIPPING SERVICES LTD.
NOTES TO THE CONDENSED CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS
| 10 | Earnings (loss) per share |
|---|
Basic and diluted earnings (loss) per share
| Three months ended June 30 | Year ended December 31 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2023 | 2022 | 2022 | |||||||
| Profit (loss) attributable to ordinary shareholders used to calculate basic and diluted earnings per share (US in millions) | ) | 3,041.9 | (215.1 | ) | 1,333.1 | 4,619.4 | ||||
| Number of shares at the beginning of the period used to calculate basic earnings (loss) per share | 119,910,688 | 120,184,098 | 119,910,688 | 119,910,688 | ||||||
| Effect of share options | 40,030 | 11,267 | 79,620 | 101,687 | ||||||
| Weighted average number of ordinary shares used to calculate basic earnings (loss) per share | 119,950,718 | 120,195,365 | 119,990,308 | 120,012,375 | ||||||
| Effect of share options | 491,243 | 451,905 | 432,514 | |||||||
| Weighted average number of ordinary shares used to calculate diluted earnings (loss) per share | 120,441,961 | 120,195,365 | 120,442,213 | 120,444,889 |
All values are in US Dollars.
In the six and three months period ended June 30, 2023, options for 2,362,276 ordinary shares, granted to officers, directors and employees were excluded from the diluted weighted average number of ordinary shares calculation as their effect would have been anti-dilutive.
16