ZIM Sees Cost Improvements Amid Ongoing Market Headwinds

ZIM Integrated Shipping Services reported Q2 adjusted EBITDA of $472 million, a YoY decrease of 38%. Analyst Omar Nokta maintains a Hold rating and a price target of $17. Despite weaker-than-expected earnings, Nokta sees cost improvements ahead, with all-in costs expected to fall to $1,750/teu in 2026 and $1,650/teu in 2027. However, uncertainties persist due to freight rate softness, underlying demand questions, and an expanding vessel orderbook.

ZIM Integrated Shipping Services Ltd. (NYSE: ZIM) reported its financial results for the second quarter of 2025, highlighting a significant year-over-year decrease in adjusted EBITDA. The company reported adjusted EBITDA of $472 million, a 38% decrease from the same period in 2024. Despite the decline, analysts remain cautiously optimistic about the company's prospects.

Revenue for the second quarter was $1.64 billion, a 15% decrease from the same period last year, driven by a decrease in both carried volume and average freight rates. Carried volume decreased by 6% to 895 thousand TEUs, while the average freight rate per TEU decreased by 12% to $1,479. Operating income (EBIT) and net income also decreased, with EBIT at $149 million and net income at $24 million.

Analyst Omar Nokta, who maintains a Hold rating and a price target of $17, noted that while the earnings were weaker than expected, he sees cost improvements ahead. Nokta expects all-in costs to fall to $1,750/TEU in 2026 and $1,650/TEU in 2027. However, uncertainties persist due to freight rate softness, underlying demand questions, and an expanding vessel orderbook.

ZIM's President & CEO, Eli Glickman, stated that the company's focus is on controlling what it can to position ZIM for sustainable and profitable growth over the long term. The company has increased the midpoints of its 2025 guidance ranges, expecting full-year adjusted EBITDA between $1.8 billion and $2.2 billion and adjusted EBIT between $550 million and $950 million.

The company declared a dividend of $7 million, or $0.06 per share, reflecting approximately 30% of second-quarter 2025 net income. The dividend will be paid on September 9, 2025, to holders of record of ZIM ordinary shares as of September 2, 2025.

Overall, while ZIM faced a challenging second quarter, the company's focus on cost improvements and its commitment to operational excellence provide a basis for optimism. Investors should closely monitor the company's ability to navigate the uncertainties in the market.

References:
[1] https://investors.zim.com/news/news-details/2025/ZIM-Reports-Financial-Results-for-the-Second-Quarter-of-2025/default.aspx