Israeli container group Zim Integrated Shipping downgrades earnings expectations, citing continued weak demand and deteriorating freight rates.

This follows a third quarter in which a huge write-down led to a large net loss.

The adjusted EBITDA earnings are in line with consensus, and therefore the disappointment is also taken in stride by investors, who in the pre-market send it down by 4.9% to USD 7.42 in the wake of a 9.4% increase on Tuesday.

Revenue in the third quarter plunged 61% to USD 1.27bn, while the analyst consensus compiled by Bloomberg News was a drop to USD 1.29bn.

Adjusted EBITDA earnings fell 89% to USD 211m, which is in line with the analyst forecast of USD 213bn.

”Zim’s third-quarter results reflected the current operating environment as demand remained weak and freight rates continued to deteriorate,” said CEO Eli Glickman, continuing:

”Given our negative outlook for freight rates in the near term, we recorded a non-cash impairment loss of approximately USD 2.1bn, which negatively impacted our net income, and revised our full-year guidance.”

On that basis, the company delivered a net loss of USD 2.3bn in the third quarter, or USD 18.90 per share.

Expectations for adjusted operating income measured at EBITDA level are now expected to reach USD 0.9-1.1bn this year, compared to the previous forecast of USD 1.2-1.6bn. The analyst consensus was USD 1.17bn.

”We believe our ample total liquidity of approximately $3.1 billion at the end of the quarter will enable Zim to maintain a long-term view while weathering prolonged market weakness,” the CEO said.

According to the CEO, the company has implemented significant cost control measures, rationalized capacity and aligned the network with a focus on both maximizing liquidity and delivering an exceptional customer experience.

In addition, he also refers to an important new collaboration with MSC that increases operational efficiency and further raises service levels.

(Translated using DeepL with additional editing by Katrine Gøthler)