Israel-based international cargo shipping company ZIM Integrated Shipping Services Ltd. (NYSE:ZIM) shares are trading higher on Monday after the company reported a first-quarter sales increase of 28% year over year (Y/Y) to $2.01 billion, beating the consensus of $1.85 billion.
Revenue was driven by the increase in freight rates as well as carried volume. Carried volume in the quarter was 944 thousand TEUs, an increase from 846 thousand TEUs a year ago quarter. The cargo shipping company’s average freight rate per TEU stood at $1,776 (+22% Y/Y) in the quarter.
Adjusted EBITDA escalated 82% Y/Y to $779 million, with margins of 39% vs. 27% in the prior year quarter. The company generated an EPS of $2.45, vs 75 cents last year, beating the consensus of $1.87.
Also Read: No Cargo Vessels En Route From China To California For First Time Since Pandemic
Operating cash flow for the year was $855 million, compared to $326 million a year ago. Capital expenditures were $78 million during the quarter versus $24 million a year ago.
ZIM’s total cash position increased by $230 million from $3.14 billion as of December 31, 2024, to $3.37 billion as of March 31, 2025.
ZIM’s net leverage ratio was 0.6x as of March-end, compared to 0.8x as of December 31, 2024.
Eli Glickman, ZIM President & CEO, said, “As we look toward the remainder of the year, the operating environment is highly uncertain, driven by a range of factors impacting global trade and economic expectations.”
“We continuously assess how to best allocate capacity and have taken steps to modify our network to match the changes in cargo flow from China and other Southeast Asian markets into the United States, including within the last week, which underscores the agile nature of our commercial strategy.”
Dividend: The Board of Directors declared a regular cash dividend of $89 million ($0.74 per share), payable on June 9, 2025, to shareholders of record as of June 2.
Glickman added, “We are confident that we have built a resilient business and will continue to benefit from the strategic investment in our fleet with larger, more modern, cost-effective capacity, approximately 40% of which is LNG-fueled. Supported by our lower cost base, we believe ZIM is well positioned to drive profitable growth over the long term.”
2025 Outlook: ZIM reaffirmed an adjusted EBITDA outlook of $1.6 billion to $2.2 billion and an adjusted EBIT of $350 million to $950 million.
“We enter 2025 with a more resilient business and modern cost- and fuel-efficient capacity, 40% of which is LNG-fueled. While acknowledging that our industry is highly volatile, exacerbated by current uncertainty related to geopolitics, international political dynamics, and economic, fiscal and monetary policies, we are confident in our agile approach and competitive position in the industry,” added Glickman.
Investors can gain exposure to the stock via ETF Series Solutions U.S. Global Sea to Sky Cargo ETF (NYSE:SEA) and SonicShares Global Shipping ETF (NYSE:BOAT).
Price Action: ZIM shares are trading higher by 11.8% to $20.49 at last check Monday.
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