NMM - Dividend policy to be in focus for ZIM Integrated Shipping Services Q2 results

2023-08-15 11:48:23 ET

When ZIM Integrated Shipping Services ( NYSE: ZIM ) reports its second quarter earnings on Wednesday, investors will majorly focus on the cargo shipping company's dividend policy.

The Israel-based company is expected to report Loss Per Share of $0.92, while revenue is expected to decline more than 60% to $1.35 billion.

ZIM, which operates fleets and network of shipping lines, is known as a high-yield dividend stock. However, the company withheld dividend on account of the $58 million net loss recorded during the first quarter.

Weak demand from consumers as well as a sharp fall in freight rates have kept the shipping sector under pressure and resulted in ZIM Integrated to post a more than 60% fall in first-quarter revenue.

Earlier in July, the company also lowered full-year earnings guidance , driven primarily by continued weakness in freight rates across all the company's trades, particularly in the Transpacific.

“ZIM's lowered FY2023 guidance is very telling that the great dividend suspension may last longer than expected, likely leaving its stock prices in the current limbo,” noted a recent Seeking Alpha analysis.

ZIM Chief Executive Officer Eli Glickman also said that the company no longer anticipate an improvement in freight rates in the second half of the year.

The stock has fallen nearly 20% since the beginning of this year, compared to peers including Navios Maritime’s ( NMM ) 7% fall, Star Bulk Carriers’ ( SBLK ) 1% decline and Golden Ocean Group’s ( GOGL ) 9% fall.

However, another Seeking Alpha analysis pointed out that factors such as lower inflation rates, lower interest rates, and seasonal demand can positively affect ZIM's financial results in the next twelve months.

Over the last one year, the company has beaten both EPS and revenue estimates 75% of the time.

Seeking Alpha analysts and Seeking Alpha’s Quant Rating considers the stock a “hold”, while Wall Street rated it as “sell”.

Over the last three months, EPS and revenue have seen two downward revisions, compared to no upward moves.

More on ZIM Integrated

• ZIM Integrated Shipping: Let's Preview The Upcoming Q2 Earnings Release
• ZIM Integrated: The Container Market Outlook Is Better Than It Seems
• ZIM Integrated Shipping cuts full-year guidance, weighed by weak freight rates
• ZIM stock sinks after company says no dividend for Q1, posts results miss

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