ZIM's Share Sale Expected to Attract Scrutiny from Other Operators
1 month ago
ZIM's Share Sale Expected to Attract Scrutiny from Other Operators
Several container shipping operators are expected to closely examine ZIM Integrated Shipping's financials to explore potential synergies with the Israeli carrier, according to a financial expert.
It was revealed on November 22 that ZIM's largest shareholder, Kenon Holdings (62% owned by Idan Ofer), plans to sell its remaining 14.8 million shares in the New York-listed carrier, valued at an estimated US$360 million.
Former shipping analyst Mark McVicar told Container News, “ZIM’s fleet is in strong condition and its balance sheet is solid, so several lines, including Maersk and the Japanese carriers, are likely to review its books for any synergy opportunities.” However, McVicar noted that such efforts often don’t lead to substantial outcomes, and the most likely scenario is that the shares will be placed with institutional investors.
ZIM reported a third-quarter net income of US$1.13 billion, reversing a net loss of US$2.27 billion in the same period of 2023. Volumes increased by 12%, reaching 97,000 TEUs, while the average freight rate per TEU surged 118%, rising to US$2,480 year-on-year.
Eli Glickman, President & CEO of ZIM, stated, “We are pleased to share our success with shareholders, declaring a special dividend of US$100 million in addition to our regular 30% quarterly net income payout of US$340 million. Our growing earnings reflect not only a strong rate environment but also our diligent execution, capacity expansion, and improved cost structure.”
ZIM is set to take delivery of the final four out of 46 new vessels, including 28 LNG-powered ships, many of which are chartered. Glickman emphasized that this fleet will help the company meet emissions reduction targets while remaining well-suited for its operational needs. He also believes that declining unit costs position ZIM for long-term profitable growth.
McVicar, who was involved in ZIM's IPO in January 2021, added that the carrier is in a strong position, particularly with its key routes in the Pacific, including its successful premium service from Southeast Asia to the US East Coast, as well as its operations on the Asia-Europe trades.
“While ZIM has many chartered ships, many of these charters will be up for renewal next year, which gives the company the flexibility to reduce its fleet by around 15% if the market weakens,” McVicar explained.
However, McVicar acknowledged that the strong performance of ZIM and other shipping lines this year was largely influenced by the Red Sea diversions due to the Middle East conflict, which has absorbed much of the 478 vessels, totaling 3.1 million TEUs, delivered this year.
Source: Container News