2023-05-22 12:51:28 ET
Shares of ZIM Integrated Shipping ( NYSE: ZIM ) sank as much as 17% on Monday after reporting a results miss, and the company said it would not pay dividends for the first quarter, citing lower freight rates and weak demand.
The cargo shipping company posted Q1 GAAP EPS of -$0.50, missing estimates by 28 cents. Revenue of $1.37 billion was down 63.2% from last year and below analyst expectations by at least $220 million.
The company's average freight rate per TEU was $1,390, which more than halved from $3,848 for the same period last year, resulting in a net loss of $58 million vs. a $1.7 billion profit.
The company was unable to declare dividends after six consecutive quarters of payouts as a result of a net loss in Q1.
Commenting on ZIM's dividends, analysts at Jefferies expect them to "remain muted" going forward, at least relative to the past two years.
Seeking Alpha contributor Atlas Equity Research said that ZIM's stock price may dip further as a result of the dividend clientele effect. The contributor maintains a "hold" rating on the company due to market uncertainty.
The company reaffirmed its adjusted EBITDA of $1.8–$2.2 billion and adjusted EBIT of $100–$500 million. Analysts at Citi expect downside risk to ZIM's 2023 outlook as they do not see a strong rebound in volume or freight rates.
The ZIM stock is up nearly 42% so far this year as of Friday's close.
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ZIM stock sinks after company says no dividend for Q1, posts results miss