ZIM Integrated Shipping Services (ZIM) 22 May 232023 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome and thank you for joining the ZIM Integrated Shipping Services Q1 2023 Earnings Conference Call. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question-and-answer session. [Operator Instructions]

like of the Investor now Elana over would Head Holzman, Relations. I to conference turn to And Please go ahead.

Thank you, results financial first quarter Natolin. And welcome conference to call. ZIM's XXXX

and are Joining Glickman, me call Xavier today on ZIM's ZIM's the President CEO; CFO. and Destriau, Eli

I projections begin, remind to wish or that reflect differ, We or of future like the forward-looking statements our you will believe assumptions We call, events actual to we current would that make during are events expectations regarding course such we may the Before only results that this expectations, you expectations, reasonable. and including that predictions, and caution or materially. results. statements Company's

Company kindly risk We and consider the Securities these referred XXXX language Exchange factors Commission, are including described obligation report no to forward-looking XX-F. with documents Form filed statements. filed on our the cautionary You update the to annual undertake and in the

to this time, Eli would turn like Glickman. to At call I ZIM's Eli? CEO, over the

you, Elana, welcome call. today's to everyone Thank to and

our with that million. loss we Coming million in in and from the was operating of in terms the and $XXX results, the of first EBIT the freight flow in operation environment reflected XXXX. Largely 'XX adjusted $XX EBITDA of summer of consistent a on the quarter, EBIT adjusted rates first expectations delivered $XXX pressure the continuation XXXX million. record Cash download of of EBITDA off began quarter

exceptionally Our total $X.X cash quarter-end position at strong. of billion remained

since we rate to in before rate similarly persistent expected gains, the QX more prices seen we price improvement continue April price is and yet and the half declines, months XXXX. XXXX, anticipate slide we to see pressure March of after This our have to second impact future durable of results. continued In several in pressure continue some then,

we despite which address are our in our in and CFO, expect comments, continue the EBIT we prepared later year guidance, provided full XXXX, we 'XX Nevertheless, will March. Xavier to which challenging reaffirming positive our industry dynamics, in

It adapting the period important a highlight X the four. Going environment structure, are during and chartering By better years in to strategy positioned operate to our lucrative ZIM we to value long-term. market number vessel as this we operational our normalized understood cost on that over Slide in to was more improving proactive being create is horizon. sustainable of the that last the highly seek environment

ample this of maintain liquidity Additionally, a and to position and enables operate our downturn. strength robust during view long-term balance from sheet ZIM a

allocation dual-fuel supports capacity In competitive XX supporting We XX This and cautious secured our and in including state-of-the-art our few strategy commercial profitable on sustainability vessels. cash decisions objectives. future focus advance growth. and fuel-efficient cost agreements, our remain total, LNG we newbuilds charter newbuild

optimize our which XX,XXX, agreements of ideally service XX the LNG our versatile suited will new XX,XXX allow fleet us XX remind include vessels smaller, vessels. To larger powered. This fuel East Coast to also for overall Asia you, are X,XXX and vessels, to LNG X,XXX vessels are TEU TEU and the these composition. more U.S.

and So number will fleet capacity capacity, stable, better operate vessel, we grow. for while will be remain we suited this operated our growth expect of our to the in planned our Under trade operated services.

was TEU the is XX of delivered. April newbuild forward. expected dual-fuel in second A benefits further expect replace we third and initial per of Regarding we have vessel in in larger smaller and cost XXXX improvement already been vessels delivered weeks. the next moving we LNG seen to as Notably, cost structure, ZIM cost expect with Six already have our vessels couple decline TEU ones. XX,XXX

XXXX. XX,XXX delivery the of first three remaining the expected are this TEU the vessels few four expect and months We of in additional year

reduce the to first of carbon the significant operate front be Being liner fore on differentiation, Coast Not customers the we also for their a among intensity Asia to trade footprint. only to are liners. to Supporting carbon incredibly vessels strategy, commercial us. at committed are is is global is a their in proud ZIM U.S. reduction but ESG to journey the and a East our high customers enabling decarbonization priority LNG we

of ZIM, annual For we accomplishment to our our and the to and well ESG as future as is comprehensive ESG in goals our report, published commitments. support end, vision consider providing which recently fifth environment this And society we a and operate. overview activities,

and reducing we the announce announce XXXX. In published, will above gas and ESG X target IMO achieving first commitment this This coming report, months, to to the emissions for X our In roadmap the emissions by is this to and scope ZIM ambitious our greenhouse goal. we X, full beyond ZIM target. time, net-zero

given LSFO. fleet to ESG provides of from clear LNG the standpoint, LNG of program Today, a Our is environmental renewal element a in from one, key but also our relative use price our strategy. an financial benefit

grow forward supply vessels. and of Following fuel our ensure the last partner continuing Shell with sourcing year, Shell to as Jamaica. highest bunkering coming port will the of [indiscernible] Kingston, as well months. LNG powered and the our be our to LNG We bunkering routine XX,XXX completed quality in our for the first fleet planned look long-term successfully This ZIM agreement in announced ZIM TEU

network our attractive commercial adapt to changing guide to strategy and opportunities. as commercial Agility our we demand continue customer excellence identify and

paying The track, team of our in these drive to we and services car and carriers supply such better target grow as first now have in investing Similarly, we quarter. to expansion cover. our strong continue is is an been to services operate XX the our in vessels weeks retails carriers in example. to growth profitable few the on car planned. Our demand activity next Tight

expanded the is last believe we in year, Over youngest our retail that the fleet retail today, we've and the capabilities, industry. our

can is control certain earlier highest that and of success could deploy the overall Retails top our vessel as XX% South the This became play of Coast. April all potentially the of percentage operational the service in a capacity cargo. trades, now we transport the in West Also, nearly year such America, our to of from Coast XX this new carriers. for We XXXX. factor U.S. East temperature key announced

contracts. to Moving

Our commercial contracts for remains of secure the XX% to trans-Pacific volume same. approach

this capacity as to this last increase close our highlight to would this rates. expected, volume are substantial meeting year's I are target year grown our a rates than though, contract We as significantly. compared lower significantly operated has year contract last year represents that

secure believe that customers. our we in and pleased are our to have good ability the with larger We relationships these to testament is a volumes it

our supply chain ecosystem. and in broader innovative in core shipping We also continue to seek investment opportunities technologies

our in strategy capital companies such, them the significant. to company, and as invest actively growth early-stage Our potential are is and their in the trajectory. assist involved modest with is requirements we to portfolio Moreover, are

We with recently twins [indiscernible] led create inspection the to vehicle assembly new innovative vehicle in completing and defects a the cost for report end digital chain successful Spinframe Spinframe, the line from this any develop detect investment platform supply throughout an in Israeli-based startup company. an after customer. that the to

to on B recently capital of In earlier participated supply companies. this weigh our the chain Series one in investing electronic funding lading arm. along venture in were We focused round portfolio see leading with of and pleased existing We bill other investors. new logistics, a also

our Please. on call his remarks to On Xavier, our results over CFO, market. will the financial for the that on additional note, I and comments turn

Thank you, welcome, Eli, everyone. again, and

On and Slide heights. five, operational we present key financial

year-over-year. on As for year, a last TEU well first billion $X.X the mentioned, $X,XXX, Eli In pressure average was results a freight as freight to Revenues billion financial carried continued primarily per reflected decline QX, XX% decrease our quarter downward quarter freight our $X.X first lower by dramatic were in driven rates. as rates volume. rate compared

in compared first first quarter to $X.X million $XXX XXXX. quarter cash the of the billion totaled free Our flow in

characterized due Turning by to incoming Total our duration. by in the mainly QX, sheet. debt longer-term million charter balance to $XXX vessels increased

XXX we XXX fleet, container ships carriers. XX Regarding and our car vessels, operate currently

the capacity, quarter. essentially same charter current duration as average the our Excluding is the prior months, newbuild remaining XX.X capacity of

TEU XX,XXX vessels. includes and note I that LNG our vessels, four newbuild would fleet that ships current two TEU is XX,XXX X

vessels total during XX compared XX that charter XX of chartered We up delivery are same year XX the in to renewal other for time period. for up XXXX. during In the the renewal of of vessels newbuild the for expected words, vessels renewal a have have up remainder with we

vessels As redelivery delivery the Eli mentioned, operate to expect will of fairly in less remain tonnage. with we and grow stable, cost-effective the we yet number newbuild the short-term, capacity of smaller, capacity we operated of our cost-efficient

we slide, decline are of QX compared primarily QX also sequentially. in next present to and In both comparisons underlying dynamics XXXX, the the outcome for are results The XXXX similar revenues. the and

and for minus the trans-Pacific X%, the adjusted loss were trade EBIT Specifically, our in disproportionate quarter adjusted QX XXXX of and exposure million results Adjusted absence Revenues EBITDA by driven respectively, to XX% contract billion, the compared was million. EBITDA XX% and year. $X.X revenue XX% and of as and $XXX to first in tailwind. margins the the last $XX are quarter quarter were while was EBIT

changes overall quarter. last impacted vessels. X. Suez Transpacific was as by by the were Slide to year XXX,XXX the decline blanking those X%, is repositioning a compared to Compared volumes of higher volume well partially TEUs trade. in and Turning a of to sequentially as volume We Atlantic offset X% and respectively. network we the carried There market have Intra our the implemented Cross QX decline lower to the same compared Asia and a adversely in of as last and X% year, further decline on XX% period QX process

first equivalents liquidity total I you or deposits a of $XXX investment quarter's bridge. we other We end, million. distributed we investments which flow following to and in shareholders bank ended our $X.X billion, quarter present share dividend $X.X the a per and total cash includes cash remind of Next, would with that our approximately of instruments. a first and the position

generated EBITDA million $XXX of million For cash into converted the flow our $XXX from quarter, adjusted activities. operating of

income approximately and of amount $XXX mostly million. $XX related Other of This quarter service, was by expenditure. $XXX capital million of in net flow the of XXXX account negatively tax lease last the include debt million taxable payment items liabilities to cash on impacted

delivered. commitment newbuild Seaspan. million a XX,XXX down we TEU To the $XXX and from payments first vessels primarily approximately and in vessels of XXXX chartered date, paid have already for for million million We $XXX as $XX XXXX

guidance. our to Moving

expect While somewhat, still the view provided our we March. guidance EBIT results deliver year XXXX has in generate positive and in full within range to deteriorated

EBIT to of and $X.X $XXX continue billion we to to forecast $X.X Specifically, EBITDA billion of $XXX million XXXX million.

second the Our the the results underlying driven in XXXX half. improved same of by destocking end to with of rates freight improved the first the volume and growth as assumptions in half cycle of remain compared

quarterly in we net to income XX% quarter. distributing our this quarter, this installments, loss XX% are distribute per not Given we of dividend to the recorded annual our a policy dividend net

that market kept there had this X%. have Now briefly effective possible supply so of risk dynamics, as oversupply. to year previously impact [Indiscernible] effective clear balance by XXXX demand are has the growth. mitigating indicated, factors discussing and may points for has and up we impact XXXX net supply supply meaningful a far to Yet,

in the remains more to be first absolute vessels years, compared has stringent XXXX XXXX to less more in as yard, months last still sent become efficient of Scrubbing, cost and terms seen increased operate. regulations the all if are X It but X is vessels the the become scrap IMO to to negligible.

Lastly limited expected it with but experienced slippage, also have is we impact. happening, as

growth for end pre-COVID The with of pattern demand demand the similar line assuming of 'XX you XXXX remainder and growth tracking distribution development and see is of the towards X.X% dotted positive the that over side, On a shows of equal volume for QX. the XXXX the expected year, the patterns of a the can XXXX reflecting the globally, expected year-over-year for that year. remainder

second Given volume to is XXXX. the to of expected weak improve start XXXX the of in date, half

note, call we Thank for open the will you. questions. this On

go [Operator is from our question from Instructions] Nokta Jefferies. And line first Omar of ahead. the Please

it comments, for update. market just response ask the we've in us can you exited tactical and you've maybe about today? just your and first rates you clearly color some operating far, softer you've of move of the the the ZIM the But Thanks lines the I this certain give whatnot. about into? say state to whether speaking, opening of to thus entered you just maybe off, just And how environment strategy just generally, in wanted seen have or you capacity areas long-term sort we're it's overall shifted company, that on shifted difficult to through around certain generally have talked or

for Thank between capacity you, right Southwest this in by make due been that a us to To one you're suspended erosion various operations trade to a deploy more profit. lanes. to we look that that And of China between quarter try switch our significantly Asia exited, capacity West service we the and impacted where Omar. makes Asia allocated or quite we U.S. Indeed, tonnage on service a our South that is had name we we has sense we sure suspended it we and [ph] generate Coast, trades. order service [NLA] to between few, between always to the reposition Coast, experienced those the Australia. our we That's did significant rate upsize that And example. to the

the the New we towards to Coast We that on redeployed also Coast well line smaller capacity North a line South a opened between Australia of with Asia and that was East America and America. closed performing And vessels. of not West Zealand the new

this the for growth profit are that where for new service we've a believe opportunity So better. entered into, is and that we

some So closed shifted will maximize that vessel to so we open allocation the new and of capacity line, have we operate. capacity trying the our we continue for do lines, to

your you outside vessels chartering where very irrespective That's the maybe Eli fuel-efficient we've loss-making liner vessels environment, just two-year available very the charter and bit to the of I shipowner. of deployed market potentially to early But overall to seems looking kind the today. you, I mentioned time as couple you of of had wanted past low-cost time in newbuildings, maybe because on look comments, fleet in cost yet age in one helpful. on it their seen point the you where they Xavier. for think ask prohibitive. kind of of perhaps have the in, has take maybe some return the just in for been just a Thank a resurgence, profitable And activity the what And picture-wise, big becoming the been your real over on charters months delivery

Could still today reconcile are that the help them a take Why liners continuing environment one just maybe two-year charters vessels you seeing? type going to we're given what's are of on? to continuing to put on available

rates is are what this that are you idle Omar, revenue which desynchronization referring still and the indeed available Well, what suggesting in to word. freight market, say and there think is capacity is on the I or or of seeing chartering quite we to the much the maybe between line not here, there terms active is

ago. As book in already order far more decisive as we we tonnage. And are significant newbuild, concerned, we terms took now a actions of us a couple ahead of of years efficient have

the is is in us that operating. to is to room we allowing to effective make tonnage each end services cost be us upsize more for this priority coming a for in where that that of trades So our up

capacity by contracts. And as that goes, of chartering in the and terms most far of as is are ZIM we're we up large for renewal coming our delivering

that again make renewal what most that that it with is XX will remains next vessels room to have tonnage we end the vessels we year said the another the months. make before expected is, come of it Today, year. and XX market capacity likely we we So deliver come most is to the of very our now that the coming in efficient way in for that if for sure

we I used same, would in you on understand have still that on charter one side, markets the rate the in question, the the the taking [indiscernible] expect dramatically you per we rate. $X,XXX lower the the general, reduction rates fuel And the the be contrary, price, emphasize, and on market past. market. this that expected. the the see And see rate that see to that lower rate and to charter ton are expected but not to the Just market side, expect hand, on freight bunker Not to we behave as freight reduced yield On we see charter from out than high. in and the the other

this So a question. is

and playing have the don't answer that. right as we we not charter, we answer follow are the for this this but We market. cannot And question for

year, That's the next And XX ships me, stated turn be strong Clearly, and clearly, half to returning No. sounds finally very this those. the It relative over, you for have the very, year. you'll guidance. And maybe it then, very, just I'll helpful. you've like just XX I say, would It's on weighted. expectations. guidance second

in the second sounds and It your Eli, comments ask still the wanted Just XQ how to color look in XQ, there quarter better, present some second to similar the maybe earlier it you're that how far? slightly to like XQ quarter. qualify on pressures second going about of developing. in willing slightly give a Is thus the you're are be Any does to to way worse? quarter? that's if Is willing

be about still We we and on from cannot know, didn't first don't not with as We but you you are reaffirming, to they're after ago that and we still our general, are we guidance the -- speaking months X And you quarter to now quarter, year, that going first second understand in half, the first guidance going be we we be our we them. of the the change going from first quarter, can half that are specific for can as guidance. said, challenging. said best, the the is the is half understand

second we So And the is going and this than understand what can We guidance. conclusion you to be half. first first can share is and going take from better half challenging. half be your that the the believe to is this

go Please Citigroup. next The Sathish question line of the ahead. from Sivakumar from is

got three I've questions here.

most have been by done at rate if actually, I look season, of first, should obviously, now. contract the them So

the of say much contract How given has on one season gone volumes of actually out far? you you could so your fine how out share Coast? If service have been rate any color West you taken

your the if to QX. last question, step trends some is down. XXX,XXX. Intra-Asia seen Because opened But respect second at Chinese New and Asia the to especially has the up QX actually? versus we has in and China have at look actually, What I Year-related QX I And it year is volume rebound from gone that QX, even to a seasonality, look has if big there understand of I driving seen is this some most back. year XXX,XXX with

on in volume, weakness the So especially Intra any what driving color Asia? that is

bring one, the liquid room do on I to bunker. like did have you down to you a XXX the look actually, How more XXX your this much third actually streamline If you cost. is cost further And versus from cargo up at ex-bunker, is lines, operationalized OpEx, it excluding pointed at actually it as year, year, as bringing has already down gone job has down cost given last port I slow that within if handling. majority has the versus look out only last come that and

room So questions. any be my coming color on trend to, will quarters? ex-bunker are like, Those three cost helpful. how Thank much the in you. That you will that have say, more

Sathish. Thank you,

are we starting are When your question we first negotiations rate speak. versus customers last a season and our rate. this with those So -- the of the as some with committing negotiation, taking still we longer, respect the to on holding and to have ongoing agreeing still compare contract

volume perspective which had remainder cargo the to years, one in company remain and XX%. the our of Our the we to the with very for a XX% prior similar of is spot contract expected they remains exposed to objective from lock

fleet for volume, we that months. more upsizing are also capacity and willing the volume lock XX% As lane, facto those for more since chasing we represents vessel this de mentioned, by XX Eli are we coming on are to our trade adding looking

lower towards are current finalizing here that average rate ones large expectations, obviously, on and the from securing a trend So track spot still than year are and we we with rate much contracts we there. are secured And the a our that last levels. the perspective, today

Asia wide. the With within us Intra-Asia your Intra-Asia our And we've but Sathish, not Asia seen Australia is covers Asia is It the pretty only also trading and Australia respect Southeast on to label also in to Africa. what our region, drop and Asia business on the volume, to volume in question, East mainly lines. to for where drop this a West we significant second units.

and America repositioned open We to have to is South the our America from East the the we've the Southwest Latin and new U.S. this Coast. Coast closed service, that line from vessel of used

therefore, So on impacting Asia We've in a of quite been some our volume we pressure Intra-Asia. our first has a on the to market blank And closed the one under service significant Africa, the quarter, overall had which goes same quarter. in sailing.

did much it's Pacific Pacific in East look the the Africa. not the the where on but the of drop, and if mainly U.S. Transpacific, the overall So to we experience volume on Northwest, Australia you most Gulf mainly the Asia Intra-Asia, Coast trade drop, or so been and Northwest,

And then ahead are we additional ex-bunker. the extraction to that have your last cost question, for may when it room of comes to what us,

TEU getting cost operate. delivery I the we the lower currently see XX,XXX of to incoming to current far us. East we of think ships much TEU the that the of And Asia clearly expect ship with newbuild This important capacity. very is the operating U.S. Coast on us our than what the to is of XX,XXX effect cost is

trades, today, so of on so will also, much forth and up freed those our we in deploy and tomorrow, result a cascading because be securing in SCPA of to deploy cost X,XXX trade fuel And going capacity. We we of of the to is the ships. from our all that TEU the will trade will pretty upsizing TEU ships our but reduction that XX,XXX all

of cost. to and that and we with will the in front, the less we on on is port cost by congestion, largely driven less also terminal that. also see we which is to So storage cost operating. the that's which the operations variable contributing front, reducing an our that improvement variable think I continue And incur cost, on incur We improvement reduced

which are cargo and to seeking the of there of we exports commercial back to element, Asia. is lastly, volume increase another from U.S. our where And strategy the is

MT's of our So here contributes on the of cost volume the weak improving trade, equipment. repositioning the leg to reducing

is also that continue commercial going balancing to So additional of as source a cost, forward is potential which develop also our the savings we strategy.

I've follow-ups, a got Thanks, couple Xavier. I if of actually. may,

some you service closed will I you see like QX the adjusted more would of that run through? those be going second And put seasonality, probably Should the for follow ask Intra-Asia if you now? and as of So vessels just you what but rate we then forward? trends could come think to to Asia course, one, of utilization impact into service are on that the the newbuild what right service, would

second didn't I'm you question, I Sathish. one? Could get the second quite sorry, repeat the

XX,XXX The you lane. deployed newbuild vessels trade have TEU Transpacific on the that

trying those to the ships is of sense utilization Just what a get are?

Right.

I'll maybe with start So this one.

and U.S. the are being East this those Coast, where vessels deployed. is indeed On

We are benefiting from very strong utilization.

the was I in it volume than So by Coast driven the on on mentioned Transpacific, U.S. Coast. to there. reduction the drop I East on is referring again the that And volume do was West more volume when the

So so the limitation. utilization, the that through Panama the to are draft obviously, canal that can is in happy the not Asia fine. disruption, carrying go are we a today, of vessels quite you mention volume to cargo, Canal, need ensuring and the current we're the U.S. quite be sure with we the with on not the Coast, a limitation But on perspective, where to due with aware respect we to that we light East I'm utilization inventive the very the That rates. are from recent are happy

question. large, for I quite are those that currently linked also, to to allow today to are lanes we delivering yet which we where first and the lanes we revenue most trade of the trade as it in few a seen us rates the to the loss-making generate absorb us the quarter. But that operate, means cost. so on on for results some today, by Obviously, still we would volumes think trade there, first improve, your our are but of We've

in not We rates, is the behind current are here, efficient least And this in the rate we in East-West of talk vessels, terms trade think we that not longer-term. are we lanes most is of the of vessels, rates as terms spot today, spot about the at and very structure. the what cost operate in sustainable

loss-making come that this So should we the based we to end remainder some back that some what But for most back that at effect industry to year. destocking the an past assumptions those which be being demand come quarters of the lanes, slightly the the for few the of our and point, allow starts that when demand is to of the in might think follow good for up trade should also end, will experienced through. over to which we've come rates and should a trigger the

The next Bland question is ahead. from the line of Sam from JPMorgan. go Please

three, please. think, got, I I've

on first contracts. The one is

have maybe in headwind mean your you rates of rates the profit lower come year, again, already to towards of last down the market sort down spot. i.e., to your sort this in of from a levels? end there the rebased being quarter-on-quarter beginning contracts that of of isn't sort year, previously think that contract Transpacific QX new I Does

contracts EBIT Transpacific. second question the carries. at volume those signed of what The time you the being just And spot have levels, being? is, think on car the you put question that any is are for on you choice Are was or would the to loss-making more if third

to it's very carriers. XX about How looked at they moment? car like profitability? Can in It mentioned, for think much months. you had those very the just ZIM You are I talk of looks for been generally you just at the contributor profitable strong recent rate I those. a of Thank carriers you. about car

Sam. you, Thank

the saying on first any that or reemphasizing on you not, today, trade So your year we secured right have that last tailwind that benefit Transpacific we do in rates lane. question, from are

exposed today, So fully largely market. spot to we already the are

XXXX. support not So already no tailwind in as revenue have the we any not in longer should to the or come no had or expect we of first our longer we do additional quarter headwind quarters to

question, the level? a are up next we at we and This we the we? consider where do -- locking is the not to of securing rates Or Then loss-making end company. do would intention

it for are with for And is and that longer. we the what because reduction minimum go. also not expectation fully is we why precisely takes of the to why So are maybe have finalized that, of some pushing it willing the months, we comes doing level our customers below XX when bit our volume been our or rate commitment the explains explains where the yet commitment year next and not are a rate this to this time customers, agreeing at little

second by So ourselves revenue your us. lock mean I not that would loss-making large, on for intend to do the think question, we cargo answer and to

And is single and growth question ago, vessels continue that soon us respect explore we've that opportunities. to pretty carriers carrier nice profitable car it this This to long like up before, to activity, is our never from to third, moving XX continue additional and end grown grow being operating. car a vessel we not for sure XX to a will activity to with your so business to operator

and we line you generate this on growing demurrage generate from generate can this display capturing by one demurrage. that year, in and that to Detention sources check this the do generation As out the we two the do are we we of activity. our is detention and And much specific the our not in income, down our of car expect car activity earnings of one that terms is the basically XXXX one revenue carrier front. you out in see to the P&L, generate business. of going information carrier know, we our specific other earnings compensated But when you revenue do we that generate revenue that versus year ago that to having a we generated extent in on significant a in compared is last pretty significantly growth we

of of question Please go next from Muneeba America. Kayani is The the from line ahead. Bank

stabilization right are of seeing that now terms just or of to signs in kind just in the of you kind I wanted demand XH revisit expectation. what any Has yet that is market? of

on give color could that. you So more if some

almost your about newbuild out, coming a talk and that do costs going just Secondly, older at on in of factor perspective? think color modeling how that year how next your we any vessels Thank and charter does this been a agreement there? what's point? based year from the you. Thirdly, if into situation this It's you and ILWU, year no about planning charters on and kind could the the on

Thank you, the one. start I'll Muneeba. Maybe last with

this Coast earlier be exited contributing Coast our the and be the are is we coming the on, no to are U.S. pushing Asia or some operate, impacting the we we situation those LA. the the impacted the can the trades no obviously, say activity East on may trade for of longer What market the So environment on as resuming to lane we opposed on we will to not the as East are terminal. longer uncertainty on back at mentioned that to continue Gulf. as is to shippers may trades, that be that to long cargo still us we LA positive in where when And effect current impacted trade between our As looking is

contracts in the highly had to more peak even rates your sourcing market we question, the compared terms reached the at year-over-year somewhat or to and charter the shorter clearly, cost sourcing that though vessels is a each I we charter for in moved on chartering a from the 'XX, dependent of respect cost of have chartering in With to market, what 'XX, cost second company a midterm our charter to developed levels. or think, when quarter quarter-over-quarter, elevated secure we as capacity being pre-COVID market

they early long-term agreement But the we and that price will end chartering an early based to those XXXX. on continue being are are days newbuilding by coming contracts in of secured into replaced to and come and XXXX the

ships are So which and at all rates, those coming chartering XXXX do way to that the that are in have with 'XX. the [ph] rate coming back on [XX] prevailed our new nothing market

expect capture increasing also please I'm operating see to but tonnage reduce replace plan, we fit a historical deployment the providing that if we additional this Muneeba, So remember. trades, down TEU can question, not because level, and which the And because only and of with our sorry, able our to volume, result. the operation cost all that taking capacity will And are upsizing in are as go that therefore, per cost we you most room and go of chartering per first are TEU. we very I your repeat as see now lower as cannot we we it result to at tonnage new make let of the we a see we on,

sure. Yes,

this current a press you're on quite environment more that because the of the Just industry it adjusted, remains at weak some point. color seeing bit demand

Yes.

the by the to New mean, compared is Year, I also been on quite impacted trade quarter years. has Transpacific in was especially which seasonality the the effect clearly, Chinese early prior around XXXX So first there always

the still demand by extent, that. obviously been is also, has weak. to The impacted So demand some

has We very are of not significantly now. demand the suggesting rebounded as here that

that. by quarter the first So was impacted

continuation market the first The the the end quarter quarter first quarter environment second just of quarter. second of the very a the of beginning or over was the much prevailed that and

a been there's we've especially increase bit did those GRI So successful. on little seen lanes, April as an trade somewhat and was rates the uptick, in of the

if to in come and rate likely support see some And the early the is second most in that Still promote therefore, or say, one at the half today. that's the is rates. will will see that and year we the earlier scenario We changing. but demand to the that our increase mention an days of to freight the trend that assumption assume an we way we coming a end, point. destocking bottomed did expect have as on, obviously to the effect now So shall

The ahead. next from Alexia of the Please question is go from Dogani Barclays. line

three. have also I

that guidance your was rates on of in QX confidence QX that guess terms your The the or And I second that loss? and the your from showed was performance, in be growth see close on. what gives in demand firstly and in improvement to you demand Secondly, for you Just number? EBIT expectation half. it Will enough spread the would oversupply right the the view? basically expectation here X.X% the chart X.X% the is

net something And around the the then, debt. was is $XXX paid final on question million debt plus dividend. you but then million the net my $XXX period in since Obviously,

of So or $X broadly year-end? over expect of should we we flat towards to it increase the should kind Thank just quarters to the expect throughout debt you. underlying net billion remain

Thank you, Alexia.

line So also broadly with original respect to our they and first a beginning quarter We QX in results, the that we year we with anticipate expectation. and said did our of difficult are said tailwind that the rates pushed from contract get spot the fact not the market. by do us of to be the day we to driven largely the that the at QX, fully end exposed

on our with from respect that to no So surprise quarter results our first front. end

ours. year-over-year With respect your the not expected assumptions, X.X% second X.X% growth or question, to it's

come Alphaliner the We the tried are year the little growth of in to demand suggesting since correct, year. would it compared first on we've the in quarter to latest second of in were assumptions relying is back volume to year illustrate are the that XXXX, up that this And in the should a the could prove that if the behind, graph those here which X.X%. bit was when half mean of the the of data what region be XXXX

assumptions that the So base from the we get data here, Alphaliner. this our for is

are $XXX your the as number. up same third paid go you by or a million. similar April, by cash point, net to shareholders in would a amount, the net debt, the correct to distributed And our And that in result, your down our debt obviously having on dividend after assessment went

to Now expected is that be going on front. what forward,

longer-term continue XX a over remembering the vessels X period years. agreement, charter to the Seaspan that of years. And back take that charter for are deal, as we've example, for in deliveries ordered newbuild the will We past those minimum is

for is the be the on the if of balance as ones So more and charter we the lease liability they delivered us, would to vessels that be shorter. than we each appeared was taking come that sheet will take

So EBITDA forward. financial of our liability balance end generation continue cash that indebtedness be at our we should EBIT as would function, expect our take we the sheet and then lease continue grow a day the to And will obviously, to that capacity. or of our delivery going on

Xavier. helpful. I just ask on That's And that, a can follow-up

you liabilities coming what EBITDA, kind debt of In of line? kind net of are comfortable level to of with the terms lease mindful

overall interesting that. in not an to That's sure of as we look need the a and cooler competitive at well there question, Because our always answer environment. I'm context to us is

X from be to or in at above industry And X normal the to carefully. the leverage be in that capital so leverage is days, days, we be ratio would was obviously need of expected Back back that this to maybe also And the X, very the look considered industry. industry was and intensive. between this our

debt therefore, a go at But I'm we will question The be think some is capital pace, expected, those zero levels situation structure perspective. to to clearly, I from a is leverage going a clearly. which sheet at from back back And not sure. walking point. away to net balance

Glickman hand closing comments. session. to Q&A our back concludes this for I Mr. So

you. Thank

our also We significant about of in We but term, to important weather cost that to medium strategy with period this driving challenges near tonnage uncertainty. lucrative adapt of enable fuel-efficient highly of current to modern environment composition. length to to at us optimize during the took rate XXXX well structure steps have rate it's spoken and sourcing our the the vessel pressure positioned addition XXXX ZIM to the highlight fleet improve is that our also

to ZIM's expect continue to we digital innovative forward, advance to position transportation shareholder as of long-term maximize seaborne Moving value. leader

at drive everything to Our ZIM. maintain while customer relationships we service highest our And strive personal the quality we preserving do touch.

priorities, all. our These through to within ecosystem, while enhance values. and invest Thank ESG tools our and continuously digital and as sustainability we profitability, support addition, work disruptive to technologies you leading customer in lead experience our our committed global In next to excited liner. are improve and remain I'm ZIM the back-end form companies advancing to phase

Thank may disconnect. and the much Goodbye. gentlemen, for you and concluded, you now very day. Ladies pleasant and joining conference has a have