ZIM Integrated Shipping Services Ltd Q4 2025 Earnings Call Transcript

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

Question: Muneeba Kayani - BoFa - Analyst : Thank you for taking my questions. So firstly, on your guidance, I wanted to just clarify it's clear you've said it's a second half earliest Red Sea reopening, but does the top end assume no reopening this year and kind of the low end assume early second half? So if you could give us a sense of the timeline you've assumed in that range, that would be helpful. Secondly, just kind of on the USTR that you'd mentioned, was I right in thinking that you would consider moving capacity to other trade lanes in the scenario it is implemented? And can you tell us what's your exposure to Chinese built ships industry sources suggest it's 34%. Is that correct? And if I may ask a third question, press articles last week suggested a potential management led buyout. Can you please comment on that? Thank you.

Question: Muneeba Kayani - BoFa - Analyst : Thank you.

Question: Marco Limite - Barclays PLC - Analyst : Hello, thanks a lot for taking my question. The first question is just a follow up on the outlook. You have mentioned that you expect the first half to be quite stronger compared to the second half, depending on the reopening of the Red Sea. Are we -- I mean, my back end of the envelope calculation takes me to assuming an early reopening at the at the beginning of the first half, basically to first half EBIT positive and then second half EBIT being negative at the lower end of the range. Would you agree with that? My second question is on CapEx. So could you please explain a little bit more about the phasing of the renewals? So are those renewals more back and loaded or are just throughout the year? And what is the CapEx range including lease for 2025, assuming none of those charter agreements are renewed or all of them are renewed? Thank you.

Question: Marco Limite - Barclays PLC - Analyst : Thank you. And if I may just to follow up on this, so are you willing to provide a range for your CapEx plus step service basically for 25 based on whether you renew or not the expiring capacity? Thank you.

Question: Marco Limite - Barclays PLC - Analyst : Okay, thank you very much.

Question: Omar Nokta - Jefferies - Analyst : Thank you. Hi, good afternoon. And Eli and Xavier, just maybe wanted to follow up. I have a couple of questions. And maybe just first on the last point Xavier, you were just making in terms of the lease payments for 25. Does that mean if it was $2.5 billion to $2.6 billion last year, does that come out to something like 1.7%, 1.8% this year, assuming maybe half of those vessels rolling off, you extend them at today's market rates? Does that sound in the ballpark?

Question: Omar Nokta - Jefferies - Analyst : Okay. All right, thank you. And then you had mentioned in your opening comments just that you're approaching that 4 million TEU run rate per year in terms of and you mentioned being able to maintain that, what is behind that in terms of the vessels coming up for renewal? Is that assuming that of those 26 ships that roll off this year, that half will be extended and the other half returned?

Question: Omar Nokta - Jefferies - Analyst : Thank you. That's actually -- that's quite helpful. And then just final one, and this is a bit more big picture strategically maybe just about the business, you were discussing the USTR proposal and still early in terms of figuring what that all means, but you did mention that some of the complexity that's now involved, if it were to go through in terms of servicing different ports and different customers in various areas, how are you thinking about them? I guess, going forward, you've operated obviously long term as an independent, ocean shipping company. Any plans or thoughts in REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 12, 2025 / 12:00PM, ZIM.N - Q4 2025 ZIM Integrated Shipping Services Ltd Earnings Call terms of diversifying interrelated businesses that are either tangential or within the logistics, as a result, especially given how significant your cash position is?

Question: Omar Nokta - Jefferies - Analyst : Well said. Thank you, Xavier. I appreciate your comments.

Question: Alexia Dogani - JPMorgan Chase & Co. - Analyst : Hi gentlemen, thank you for taking my questions as well. Just very firstly, you talked about the anxiety that customers are facing very near term, but can you talk a little bit more about the very current rates we're seeing and activity in February because we've noticed a quite a material drop-in spot rates in February? And it's not very clear what is driving that, given the Red Sea remains closed. So any comment there would be great. And in that context, if you can give us a little bit of a rough evolution of rate over the next 12 months, their seasonality and kind of what your assumptions are on that basis and secondly on the fleet composition, I remember when you came to market, one of the unique selling points was REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 12, 2025 / 12:00PM, ZIM.N - Q4 2025 ZIM Integrated Shipping Services Ltd Earnings Call your agility and the fact that you had very few vessels or capacity on the longer-term charters. Obviously, that balance massively switched during COVID because of the constraints to secure capacity. Are you considering again to go back to much shorter and shorter durations to bring back some of that agility you had prior to COVID? And can you help us understand that at which scenario would you actually consider shrinking your asset base? Obviously, you're telling us over the next two years you have scope for a 20% reduction, assuming you don't renew any of these vessels that are coming up for renewal. Is that a scenario you are considering as a team? And then just a kind of a very quick one, and it's good to see that you chose to buy some vessels. And why didn't you consider to buy more and instead, kind of continue to pay the dividend that clearly is quite expensive if I think about the yield and it trades on? Just trying to understand kind of the capital allocation there. Thank you.

Question: Alexia Dogani - JPMorgan Chase & Co. - Analyst : Thanks, I'm sorry. Can I just ask a very short follow up? In your guidance comments, you basically expect stable operating capacity. And therefore, we should expect OM lease set up for renewal -- will be renewed to get to stable operating capacity. Is that right?

Question: Alexia Dogani - JPMorgan Chase & Co. - Analyst : Okay. All right, thank you.