ZIM Integrated Shipping Services Ltd.

Good afternoon, ladies and gentlemen. Thank you for standing by. I am Francie, your course call operator. Welcome and thank you for joining the ZIM Integrated Shipping Service Q2 2022 Earnings Conference Call. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question and answer session. If you would like to ask a question, you may press star followed by one on your touchtone telephone. Press the star key followed by zero for operator assistance. It's my pleasure, and I would now like to turn the conference over to Ms. Elana Holzman, head of investor relations. Please go ahead, ma'am.

Thank you, Francie, and welcome to Zim's second quarter 2022 financial results conference call. Joining me on the call today are Eli Glickman, Zim's president and CEO, and Saviedis Leo, Zim's CFO. Before we begin, I would like to remind you that during the course of this call, we will make forward-looking statements regarding expectations, predictions, projections, or future events or results. We believe that our expectations and assumptions are reasonable. We wish to caution you that such statements reflect only the company's current expectations and that actual events or results may differ, including material. You are kindly referred to consider the risk factors in cautionary language described in the documents the company filed with the Securities and Exchange Commission, including our 2021 Annual Report, filed on Form 20F on March 9, 2022. We undertake no obligation to update these forward-looking statements. At this time, I would like to turn the call over to the CEO, Eli Gluckman. Eli?

Thank you, Ilana, and welcome everyone to today's course. I am very proud of our execution and continuous strong financial performance during the second quarter and first half of 2022, as you can see in slide number three. Over the past several quarters, Zim established itself as a leader in terms of EBITDA and EBIT margin in container shipping. Our first half results are record results for Zim and we are pleased to continue delivering strong EBITDA and EBIT margins. Based on our solid performance in the first half, we are reaffirming our full year guidance for 2022 and are on track to deliver another year of record earnings and profitability. We are also announcing today the increase in our quarterly dividend payout from 20% to 30% of quarterly net income. This quarterly increase is based on our confidence in our ability to deliver long-term and consistent profitability while enabling our shareholders to benefit sooner from these strong results on a quarterly basis. As you can see in slide number three, In the first half of 2022, revenue grew by 73% compared to the same period in 2021. Adjusted EBITDA grew 115% and net income grew 106% as we further capitalized on elevated freight rates and resilient demand. We remain committed to profitable growth In the first half of 2022, adjusted EBITDA margin improved from 52% to 65%, and adjusted EBIT margin improved from 45% to 56%. Our balance sheet continues to be very strong with total equity of $5.25 billion at the end of the quarter after the distribution of $2.4 billion in dividends during the first half of 2022. In slide number four, you can see that return capital to shareholders has been and remains a top priority for us. Given our confidence in our long-term profitability and goal to reward long-term shareholders, we are increasing our quarterly dividend payout from 20% of quarterly net income to 30% of quarterly net income, with the total dividend payout of 30 to 50% annual net income. As such, starting this quarter, we intend to distribute approximately 30% of quarterly net income for each of the first three quarters of the year, with possible step up to 50% of annual net income with the release of Q4 and full e-results subject to board approval. Accordingly, our board declared a Q2 dividend of $4.75 per share, or a total of approximately $571 million. The Q2 dividend includes a 10% one-time catch-up from Q1 net income. In slide number four, you can see that the past several weeks have demonstrated the dynamic nature of our industry and the importance of staying focused on our core strategy and key strengths. Innovation, agility, and excellence were the foundation of Zim's successful turnaround, and they will continue to guide our commercial and operational strategy to further position Zim as a top performer in our industry. We have established a track record of successfully identified attractive growth opportunities and adjusting our fleet size based on changing market conditions. This is a direct result of our operational and commercial agility, which has enabled Zing to optimize vessel deployment, support high utilization level of vessels, and exploit specific trade advantages, driving our strong results and strong profitability. We expect this approach to continue to be beneficial as the market expected to normalize from peak levels. Our global needs strategy dictates that we operate in trade lanes where we have competitive advantage and can command meaningful market share. In Q2, we expanded our operated fleet capacity. We now operate 149 vessels to meet customer demand. We open new lines and adjust our service to address changes in the business environment so our vessels continue to sail full. I remind you that we have expanded our fleet over the past few quarters, partly in anticipation of the change in our collaboration agreement with the 2M. We transitioned to a full-slot swap agreement on the Asia to U.S. East Coast and Gulf Coast and terminated the slot purchase agreement we had on the PMW and Asia met rates. As a result of these changes, which went into effect in April 2022, we increased our operating capacity in order to best serve our customers. I would also like to highlight our car carrier business as an example of Z-mobility to identify profitable commercial opportunities. Since the beginning of the year, we grew the number of car carriers we operate to 10 as we take important steps to further capture growth in car cargo being exported out of Asia. On the operational side, we remain committed to a strategy of relying primarily on charter capacity while maintaining a high level of flexibility. This flexibility allows us to adapt our fleet size to changing market environment. Yet, we adopted our chartering strategy to reduce our exposure to the sport charter market due to shortage in capacity and rising daily rates. Instead, we opt to charter new built vessels for our co-operated capacity to improve our cost structure in the mid and long term. As you know, during 2023 and 2024, we expect the delivery of 46 new-build vessels, of which 28 are LNG-powered vessels. This new-build capacity strengthens our commercial proposition and improves our cost structure by securing fuel-efficient new-build capacity. The LNG vessels also serve our own ESG goals. We estimate that approximately a third of our capacity could be LNG powered when we take delivery of these LNG vessels, and we will be the first line to operate an LNG fleet on the Asia to the US East Coast trade. We are excited. The dream will be more carbon and cost efficient than it is today. while improving our competitive position and supporting our customer in meeting their own ESG objectives. We are pleased to continue to position Zyn at the forefront of carbon intensity reduction among global liners. In slide six, we can see that as part of our strategy, we continue to leverage the Israeli high-tech startup ecosystem to identify attractive new innovative companies as growth engines. Our focus is on digital initiatives and technologies relevant to our core shipping activities and the broader logistics sector. Our objective is to identify this opportunity at an early stage, which requires modest investment to establish our position and serve as strategic partners, implementing the technologies internally and assist these companies in their growth. We have been very active. on this form and have recently completed four investments. We did two follow-on investments in WaveBL and Sodio, and a third-time investment in Data Science Group and Hooper Systems. Highlighting our most recent investment in Hooper, they are a provider of cutting-edge tracking solutions for unpowered assets. The solution is extremely doable, cost-efficient, and power-efficient. creating a tracking device that can last up to 10 years without changing the power source. Our investment in Hoopoe will be used in part to develop a solution suitable for the containers. For all these companies, Ariane will believe they hold significant potential in the future. Before turning the call over to Xavier, our CFO, I would like to briefly address the current market environment and outlook moving forward. As I mentioned, the shipping industry is dynamic. Over the past several weeks, we've seen a decline in freight rates, particularly in the Trans-Pacific, despite persistent port congestion and overall positive demand trends driven by macroeconomic and geopolitical uncertainty. We therefore recognize that rates may have peaked. However, We know that current rate rates, which are of historic high, remain elevated and therefore very profitable. While we anticipate some declining rates for the remainder of the year, we expect the normalization to be gradual and support ZIM reaffirmed 2022 guidance, which, as I mentioned, will enable us to post another year of record earnings. Furthermore, We expect the new 2023 in regulation and the agenda to decarbonize shipping to partially offset growth in supply and support freighters in the mid to long term. I will now turn the call over to Xavier for his remarks on our financial results and additional comments on the market, please.