ZIM Swings to First-Quarter Loss as Freight Rates Weaken, Shares Slip (ZIM)

By Fiona Craig

ZIM Integrated Shipping Services Ltd. (NYSE:ZIM) reported a net loss of $86 million for the first quarter ended March 31, 2026, reversing from net income of $296 million recorded in the same period last year. Shares of the shipping company fell more than 2% in pre-market trading following the results.

Revenue and Freight Rates Decline

Quarterly revenue dropped to $1.40 billion from $2.01 billion a year earlier as softer shipping demand and lower freight rates weighed on performance.

Carried volume decreased to 866,000 twenty-foot equivalent units (TEUs), compared with 944,000 TEUs in the first quarter of 2025. Average freight rates per TEU declined to $1,310 from $1,776 in the prior-year period.

Operating results deteriorated significantly, with ZIM posting an operating loss (EBIT) of $18 million versus operating income of $464 million a year earlier.

Adjusted EBITDA fell to $313 million from $779 million, while adjusted EBITDA margin narrowed to 22% from 39%. Adjusted EBIT showed a loss of $5 million, compared with adjusted EBIT of $463 million in the same quarter last year.

Profitability and Cash Flow Weaken

Loss before income taxes totaled $98 million, compared with pre-tax profit of $381 million in the prior-year quarter. A tax benefit of $12 million partially reduced the loss.

Diluted loss per share came in at $0.71, compared with diluted earnings per share of $2.45 a year ago.

Net cash generated from operating activities declined to $263 million from $855 million in the first quarter of 2025. Free cash flow also dropped sharply to $235 million from $787 million.

Capital expenditures were reduced to $31 million from $78 million a year earlier.

As of March 31, 2026, net debt stood at $2.93 billion, unchanged from a year earlier, while the company’s net leverage ratio increased to 1.7x from 1.3x at the end of 2025.

Management Cites Freight Pressure and Fuel Cost Volatility

ZIM President and Chief Executive Eli Glickman said the quarter reflected a “softer freight rate environment, coupled with weaker demand,” adding that the conflict in the Persian Gulf “has sparked a sharp increase and significant volatility in bunkering costs.”

He added that the company expects “a more meaningful effect in the second quarter, before our actions to offset these costs, including increased freight rates and bunker-specific surcharges, begin to take hold.”