ZIM Integrated Shipping Services Ltd. (NYSE: ZIM)

Sector: Industrials Industry: Marine Shipping CIK: 0001654126
Market Cap 3.36 Bn
P/B 0.84
P/E 3.35
P/S 0.44
ROIC (Qtr) 11.30
Div Yield % 27.15
Rev 1y % (Qtr) -35.73
Total Debt (Qtr) 5.66 Bn
Debt/Equity (Qtr) 1.41
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About

ZIM Integrated Shipping Services Ltd., a global container liner shipping company with the stock symbol ZIM on the New York Stock Exchange, operates in the dynamic and competitive industry of maritime transportation. Founded in Israel in 1945, the company has built a reputation for providing innovative seaborne transportation and logistics services with a focus on niche markets. ZIM's main business activities involve the transportation of containerized cargo, including general cargo, refrigerated cargo, oversized cargo, and car carrier services....

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Investment thesis

Bull case

  • Strong operating cash flow of 3.08B provides robust 0.54x coverage of total debt 5.66B, indicating excellent debt servicing capability and financial flexibility.
  • Tangible assets of 10.77B provide exceptional 45.01x coverage of deferred revenue 239.20M, showing strong service capability backing.
  • Robust free cash flow of 2.87B exceeds capital expenditure of 201.90M by 14.24x, indicating strong organic growth funding capability.
  • Strong operating cash flow of 3.08B provides 9.20x coverage of SG&A expenses 334.30M, showing efficient operational cost management.
  • Operating cash flow of 3.08B provides strong 12.86x coverage of deferred revenue 239.20M, indicating service delivery capability.

Bear case

  • Operating cash flow of 3.08B barely covers its investment activities of (276.10M), with a coverage ratio of -11.14, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Cash reserves of 1.30B provide limited coverage of acquisition spending of (7.10M), which is -182.96x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • High receivables of 694.90M relative to inventory of 182M (3.82 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Operating earnings of 1.70B show weak coverage of depreciation charges of 1.28B, with a 1.33 ratio indicating high capital intensity and potential reinvestment needs.
  • Operating cash flow of 3.08B barely covers operating expenses of (49.70M) with a -61.91 ratio, suggesting thin operational efficiency margins and limited flexibility.

Peer comparison

Companies in the Marine Shipping
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 KEX Kirby Corp 7.05 Bn 19.89 2.10 1.13 Bn
2 MATX Matson, Inc. 6.79 Bn 74.01 4.43 0.72 Bn
3 ZIM ZIM Integrated Shipping Services Ltd. 3.36 Bn 3.35 0.44 5.66 Bn
4 HAFN Hafnia Ltd 3.35 Bn 10.82 1.51 0.89 Bn
5 BWLP BW LPG Ltd 2.38 Bn 10.97 0.67 1.09 Bn
6 SBLK Star Bulk Carriers Corp. 2.37 Bn 245.30 3.42 1.23 Bn
7 CMRE Costamare Inc. 2.05 Bn 6.81 1.69 1.58 Bn
8 DAC Danaos Corp 1.99 Bn 4.27 1.93 0.75 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.74 0.60
EV to Cash from Ops. EV/CFO 2.63 6.07
EV to Debt EV to Debt 1.43 60.45
EV to EBIT EV/EBIT 4.76 4.74
EV to EBITDA EV/EBITDA 2.87 5.76
EV to Free Cash Flow [EV/FCF] EV/FCF 2.81 5.00
EV to Market Cap EV to Market Cap 2.41 29.59
EV to Revenue EV/Rev 1.07 2.00
Price to Book Value [P/B] P/B 0.84 1.07
Price to Earnings [P/E] P/E 3.35 13.80
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 2.47
Dividend Payout Ratio % Div Payout % (Qtr) 90.90 68.67
Dividend per Basic Share Div per Share (Qtr) 7.56 1.18
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 31.68 105.16
Interest Coverage Int. cover (Qtr) 3.40 -7.10
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -22.29 -33.98
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -16.12 25.96
Dividend Growth (1y) % Div 1y % (Qtr) 551.72 9.12
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -24.66 -27.24
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -2.59 -36.36
EBIT Growth (1y) % EBIT 1y % (Qtr) -11.25 -26.39
EBT Growth (1y) % EBT 1y % (Qtr) -17.86 -36.07
EPS Growth (1y) % EPS 1y % (Qtr) -30.32 -30.68
FCF Growth (1y) % FCF 1y % (Qtr) 10.68 14.21
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -11.41 -7.09
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.70 0.63
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.08
Cash Ratio Cash Ratio (Qtr) 0.61 1.33
Current Ratio Curr Ratio (Qtr) 1.30 2.15
Debt to Equity Ratio Debt/Equity (Qtr) 1.41 0.73
Interest Cover Ratio Int Coverage (Qtr) 3.40 -7.10
Times Interest Earned Times Interest Earned (Qtr) 3.40 -7.10
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 39.30 27.36
EBIT Margin % EBIT Margin % (Qtr) 22.40 17.95
EBT Margin % EBT Margin % (Qtr) 15.81 10.77
Gross Margin % Gross Margin % (Qtr) 24.00 37.00
Net Profit Margin % Net Margin % (Qtr) 13.20 9.28