Israeli shipping line Zim saw profit plunge due to the precipitous decline in freight rates.
The New York-listed company reported net income of $417m in the fourth quarter of the year.
That is massively down from the $1.71bn it logged in the same quarter in the previous year.
Operating income (Ebit) dropped 72% to $585m and revenues in the fourth quarter were $2.19bn, a decrease of 37% from the previous year.
Chief executive Eli Glickman said the company would remain positive in the current year.
The liner operator expects to generate adjusted Ebitda of between $1.8bn and $2.2bn in 2023.
Adjusted Ebit is forecast at between $100m and $500m.
“While macroeconomic uncertainties, the precipitous decline in freight rates over the past few months and the supply-demand imbalance continue to drive a challenging near-term outlook for container shipping, we are confident in Zim’s strategy and believe we will generate positive Ebit in 2023,” Glickman said.
Zim reported net income for the full year of $4.63bn, more or less on a par with the $4.63bn in the previous year.
Ebit in 2022 rose 5% to $6.14bn and revenues for the full year were up 17% to $12.56bn.
“2022 was an exceptional year for Zim, as we capitalised on both our differentiated strategy and the attractive market,” Glickman said.
Zim will declare a fourth-quarter dividend of approximately $769m, or $6.40 per share.
“Returning cash to shareholders remains a priority for our company,” he added.
“In total, we will be providing shareholders dividends of $2.04bn, representing approximately 44% of total 2022 net income,” he said.
Normalised market
Glickman said the company would take steps to operate in a normalised market
These include leveraging digital strategies, operating a high-quality sustainable fleet and further implementing global niche strategy positions.
“Over the past two years, we have taken important steps amidst a highly lucrative market to best position Zim to execute in a more normalised trading environment,” he said.
“Specifically, we enhanced our vessel sourcing strategy to secure attractive newbuild capacity and improve our cost structure.
“We have also diversified our commercial presence to ensure Zim is optimising its performance to create long-term sustainable shareholder value.
“Our chartered LNG-powered newbuild capacity is expected to significantly improve our cost structure throughout 2023 and beyond, strengthen our commercial prospects and advance our ESG objectives for Zim and our customers.”
“Consistent with our global niche strategy, we continuously review and adapt our network to swiftly respond to customers’ changing needs, capitalise on shifting market dynamics and new growth opportunities and maximise profitability.”
