The delivery range improves Winter results in Q2


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Zim Integrated Shipping Services Ltd. (NYSE: ZIM) reported extremely strong results for the second quarter of 2021, spurred by a global jump in deliveries. The Israeli shipping company reported a net profit of $ 886 million in the second quarter of 2021, 50% higher than the previous quarter and an incredible 35 times higher than the corresponding quarter of 2020.

Just a decade after Zim was forced to seek debt settlement, Zim is perhaps the most profitable company in Israel today with a profit of $ 1.48 billion in the first half of 2021.

The company is benefiting from global advances in shipping prices since the outbreak of the Covida pandemic and growing demand for the transportation services it provides. During the second quarter, Zim delivered 921,000 containers (TEUs), an increase of 44% over the corresponding quarter of 2020, while the average container shipping price was $ 2,341, up 119% from the corresponding quarter.

Revenue in the second quarter was $ 2.4 billion, up three times from the same quarter in 2020 and well above analysts ’estimates of $ 1.77 billion. Revenue in the first half was $ 4.1 billion, compared to $ 1.6 billion in the same period in 2020.

Zim held its IPO on the New York Stock Exchange in January 2021 on a valuation of the company, and the share price fell 23% on the first day of trading. But it recovered quickly and the stock price rose 203% from the IPO yesterday. The share price rose 4.05% today, to $ 47.28, giving a market capitalization of $ 5.4 billion. Kenon Holdings (NYSE: KEN; TASE: KEN) controlled by Idan Ofer is the largest shareholder of Zima with a 28% stake.

Winter CEO Eli Glickman points out that Winter’s delivery volume growth is significantly higher than the industry average. “We don’t control prices, but the market. We try to be better, more efficient and more original and to be in markets where prices are higher. We are a global but niche player and we go to places where our profits are higher.

“Container shipping prices have doubled according to the Shanghai Index, but locally there are lines where prices have risen tenfold. For example, from Asia to the US, where the average a year ago was $ 2,400 per container, and today it is possible see $ 20,000 and there is no room on board.People knock on my door and are willing to pay any price, and as in many industries, it is still being negotiated today to find a place on board.

How this came about

“After Covid, the crisis started with production in China, which was closed for two months, and from there it went into demand, especially in Western countries. There is a huge surplus of demand, because people are free of money. We don’t need hotels and flights. entered the costs of renovating and ordering e-commerce, so from the situation in which ships were “at rest” today, there are no ships around the world. We have adjusted properly. , and our number of containers increased from 600,000 to 1,000,000. Those were the decisions that were justified today. “

Will this global trend continue or do you expect things to stabilize?

“Demand is only growing and getting stronger. There is a mess in the supply chain all over the world, so consequently we can see a bottleneck: lack of ships, lack of containers, in ports, especially in American ships, waiting.” Dozens of ships in Los Angeles are waiting for more than 10 days. I don’t see that improving. “

We see this in Israeli ports as well

“I don’t want to talk about Haifa or Ashdod. There are things about the culture of workers’ committees, not at all about demand. We’re losing a lot of money because we’re waiting in inefficient ports around the world.”

Glickman concluded: “From now on, our forecasts are improving every week. How long will it take? I don’t know, but there are no changes in trends at the moment.”

Posted by Globes, Israeli Business News – en.globes.co.il – August 18, 2021

© Copyright Globes Itonut (1983) Ltd. 2021


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