Zim is the world’s tenth largest container shipping line. Yesterday, the company posted the best quarterly results in its history. It increased its full-year guidance and now predicts 2022 earnings will be around 20% higher than in 2021. And yet, shares of Zim fell as much as 8% in the hours after its earnings release.
The record results from Zim came on the same day as a 25% plunge in shares of Target and a 1,165-point drop in the Dow amid investor fears of inflation and rising retail inventories. Ample retail inventories imply reduced import demand, a negative for container freight rates. Inventories are up 43% year on year at Target, 32% at Walmart and Home Depot and 10% at Lowe’s.
Zim reported net income of $1.7 billion for Q1 2022, almost triple net income of $590 million in the same period last year. Throughout the pandemic era, Israel-based Zim has boosted quarterly revenues at a much faster pace than its larger competitors.
Between Q4 2019 — the last quarter unaffected by COVID — and the most recent quarter, Zim’s quarterly revenues have surged by 349%. Over the same period, Hapag-Lloyd’s quarterly revenues are up 187% and Maersk’s ocean revenues are up 121%.
Source: freightwaves.com