ZIM Integrated Shipping Services Ltd Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Omar Nokta - Jefferies Group LLC - Analyst : Obviously, exceptionally strong quarter, big guidance bump. First, maybe just on the dividend. Your cash position has jumped here to above $3 billion here at quarter end. It seems that you're just hearing the commentary and by your actions that you've got a good level of confidence on the outlook. I guess, for ZIM in particular. But maybe if you don't mind just giving us a sense of how are you thinking about ZIM and how it's positioned as we go into an uncertain -- perhaps 2025? And then also in terms of the dividend, the $100 million payout, the special payout, does that factor into the Board's decision on whether or not to true up to the full [50%].

Question: Omar Nokta - Jefferies Group LLC - Analyst : Great. Very helpful. And maybe just a follow-up, maybe in terms of just the spot market, and as we referenced here, it looks like we're finishing off the year relatively strongly. Maybe just like, could you give some color on what you've been seeing here recently. You had the wind up going into peak season, a little bit of a wind down as peak season has started to conclude. How does -- how have things kind of been going here recently? And then in terms of the strike on the US East Coast, it only lasted three days, you're obviously very active in that market. Any lingering effect for them in the fourth quarter in terms of, say, financial impact? Anything to talk about?

Question: Alexia Dogani - JPMorgan Chase & Co - Analyst : I had two questions. Just firstly, very good to hear kind of the positive outlook that gives you the confidence to give some incremental special dividend near term. What held you back from reversing the impairment you took last year? Because I believe that the impairment was driven by the -- kind of outlook of the market. Could you not reconsider that decision now that you suggest kind of things have improved more underlying? So that's my first question. And then secondly, can you just clarify, Xavier, what percent of your capacity is on this kind of smaller, less efficient vessels that could potentially come out in '25 should the market turn out weaker? And then if I actually can ask one more. What are you hearing from your customers near term? I mean is there scope for further inventory buildup into the first half of 2025 or kind of the duration, kind of constraint the timing benefit of arriving in the US in the next couple of weeks?

Question: Alexia Dogani - JPMorgan Chase & Co - Analyst : That's very helpful. And can I just ask one follow-up on the oversupply comments you gave earlier. Obviously, you're talking about risk of oversupply continuing, but to a lesser extent. What is that premised on? Is it on the view that likely the Cape of Good Hope journeys will continue in perpetuity or kind of what really is, yes, kind of the basis on the lesser extent point?

Question: Sathish Sivakumar - Citi - Analyst : Xavier and Eli Glickman, congratulations on the good results here, actually. I got four questions here, and I might start off with -- on the guidance as such. If I look at the guidance, the top end, it actually assumes the average freight rates being flat quarter-on-quarter. Is that correct? Or do you actually see an uptick in the volume growth versus Q4 even adjusted for seasonality? And then the second question is around the contract versus the spot volume mix here. Has it changed as we went through the year? Are you still using around 35% of your volumes on Transpacific is still contracted? And any color around that? What does that split looks like actually at the end of Q3? And then the third one is around the vessel utilization. If you have any color around like within your trade lanes, where are you seeing, say, higher utilization versus you're seeing still some pressure on getting the vessels fully utilized. Again, just looking into very specifically, Transpacific versus Intra-Asia, LatAm trades. And then the final one on the Transpacific volume growth, strong volume growth here. Can you actually help us understand year-on-year movements there versus, say, volumes into West Coast which was not there last year, you launched those services this year, then also the impact of express service tank, basically splitting between East and West Coast would be very helpful from Asia.

Question: Sathish Sivakumar - Citi - Analyst : On the express type product, right, the express services, what type of customers are actually utilizing that service? --

Question: Sathish Sivakumar - Citi - Analyst : Got it. Maybe just -- sorry, one quick follow-up on this. So the point of sale on the express service, how do you classify US versus Asia on that express service? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 20, 2024 / 1:00PM, ZIM.N - Q3 2024 ZIM Integrated Shipping Services Ltd Earnings Call

Question: Sathish Sivakumar - Citi - Analyst : So if I look at the point of sale for that express service, what is the split would look like, say, originating out of Asia versus originating out of US importers?