ZIM Integrated Shipping Services Ltd.

Ladies and gentlemen, thank you for standing by. Welcome and thank you for joining the ZIM Integrated Chipping Services Q1 2023 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 1 on your touch-tone telephone. Please press the star key followed by 0 for operator assistance. And I would now like to turn the conference over to Alana Holzman, Head of Investor Relations. Please go ahead.

Thank you, Natalie. And welcome to Zim's first quarter 2023 financial results conference call. Joining me on the call today are Eli Glickman, Zim's President and CEO, and Xavier Desleaux, 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 actual events or results may differ, including material. You are kindly referred to consider the risk factors and cautionary language described in the documents the company filed with the Securities and Exchange Commission including our 2022 annual report filed on Form 20F. We undertake no obligation to update these forward-looking statements. At this time, I would like to turn the call over to Zim's CEO, Eli Glickman. Eli.

Thank you, Ilana, and welcome everyone to today's call. Coming off a record 22 in terms of EBIT results, the operating environment in the first quarter of 2023 reflected the continuation of the downward pressure on freight rates that began in the summer of 2022. Largely consistent with our expectations in the first quarter, we delivered adjusted EBITDA of $373 million, and adjusted EBIT loss of $14 million. Cash flow from operation was $174 million. Our total cash position of $4.2 billion at quarter end remains exceptionally strong. In March and April 2023, After several months of persistent declines, we have seen some price gains. Yet, prices continue to slide since then, and we anticipate rate pressure to continue in the near future before we see more durable rate improvement in the second half of 2023. This continued price pressure is expected to similarly impact our Q2 results. Nevertheless, we continue to expect positive EBIT in 2023. Despite the challenging macro and industry dynamic, which our CFO Xavier will address later in our prepared comments, we are reaffirming our full year 23 guidance, which we provided in March. Going to slide number four. It is important to highlight that Zim understood during the highly lucrative market period of the last two years that the more normalized operation environment was on the horizon. By being proactive in adopting our vessel charting strategy and improving our cost structure, we are better positioned to operate in this environment as we seek to create sustainable value over the long term. Additionally, our robust balance sheet and ample liquidity enables ZIM to operate from a position of strength and maintain a long-term view during this downturn. We remain cautious in our cash allocation decisions and focus on supporting future profitable growth. In total, We secured through charter agreements 46 new builds, including 28 state-of-the-art LNG dual fuel vessels. This cost-competitive and fuel-efficient new build capacity supports our commercial strategy and advances our sustainability objectives. To remind you, our agreements include 10,000-15,000 TU LNG fuel vessels which are ideally suited for the Asia to the US East Coast service. And 36 smaller, more versatile 7,000 and 5,000 TU vessels. 18 of these 36 vessels are also LNG powered. This new overall larger vessel will allow us to optimize our fleet composition So while we expect the number of vessels we operate to remain stable, our operated capacity will grow. Under this planned growth in operated capacity, our fleet will be better suited for our trades and services. Regarding our cost structure, we expect ZIM costs per TU to decline as we replace smaller vessels with larger ones, notably We have already seen initial cost benefits in 2023 and expect further improvement moving forward. Six of our 46 new built vessels have already been delivered. A second 15,000 CULNG dual fuel vessels was delivered in April and the third is expected in the next couple of weeks. We expect the delivery of four additional 15,000 TU vessels this year, and the remaining three are expected in the first few months of 2024. Being the first liner to operate LNG vessels on the Asia to the US East Coast trade is a significant commercial differentiation, and we are incredibly proud to be at the forefront of carbon intensity reduction among global liners. Not only is Zim committed to a decarbonization strategy, but we are also enabling customers to reduce their carbon footprint. Supporting our customers in their ESG journey is a high priority for us. For Zim, our ESG vision is to consider and support the society and environment in which we operate and to this end we recently published our fifth annual esg report providing a comprehensive overview of our activities accomplishment as well as future goals and commitments in this report we publish for the first time zero fuel ZIM full scope 1, 2, and 3 greenhouse gas emissions and announce our commitment to reducing ZIM GHG emissions to net zero by 2050. This target is above and beyond the IMO goal. In the coming months, we will announce our roadmap to achieving this ambitious target. Our fleet renewal program is a key element in our ESG strategy. Our use of LNG provides a clear benefit from an environmental standpoint, but also from financial one, given the price of LNG relative to LSFO. Following our long-term supply agreement announced last year, Zim and Shell successfully completed the first LNG bunkering of Zim-Sami offer in Kingston, Jamaica. This will be the routine bunkering port for 15,000 TU vessels. We look forward to continuing our partner with Shell to ensure our fuel sourcing is well-planned and of the highest quality as our energy-powered fleet grows in the coming months. Agility and excellence guide our commercial strategy as we continue to adapt our network to change in customer demand and identify attractive commercial opportunities. Our car carrier's activity is such an example. The extension of our services in on-track, and we now operate 14 car carriers to go to 16 vessels in the next few weeks as planned. Tight supply and strong demand in these services continue to drive profitable growth in the first quarter. Similarly, we have been investing in our refills to target better paying cargo. Over the last year, we've expanded our refill capabilities, and today we believe that our refill fleet is the youngest in the industry. Also, we could now potentially deploy nearly 25% of our overall vessel capacity for the transport of temperature-controlled cargo. This is the highest percentage of all the top 10 carriers. Reefers can play a key factor in the success of certain trades, such as our new service from South America, West Coast, to the U.S., East Coast. We announced earlier this year and that became operational in April 2023. Moving to contracts, our commercial approach to secure contracts for 50% of Trans-Pacific volume remains the same. We are close to meeting this target, though, as expected, rates this year are significantly lower than last year's contract rates. I would highlight that our contract volume this year represents a substantial increase compared to last year as our operated capacity has grown significantly. We are pleased in our ability to secure this larger volume and believe that it is a testament to the good relationships we have with our customers. We also continue to seek investment opportunities in innovative technologies in our core shipping and broader supply chain ecosystem. Our strategy is to invest in early-stage companies, and as such, the capital requirements are modest and the potential is significant. Moreover, we are actively involved with our portfolio companies to assist them in their growth We recently led a new investment in Spinframe, an Israeli-based startup, after completing successful few Cs with the company. Spinframe developed an innovative vehicle inspection platform that creates digital trims for vehicles throughout the supply chain to detect and report any defects in these cars, from the assembly line to the end customer. We also recently participated along with other existing investors in a CSB funding round in Wave Electronic Bill of Lending, one of our earlier portfolio companies. We were pleased to see a new venture capital focus on investing in supply chain and logistics leading this round. On that note, I will turn the call over to Xavier, our CFO, for his remarks on our financial results and additional comments on the market. Please.