ZIM Integrated Shipping Services Ltd.

Thank you for standing by. My name is Kate and I will be your conference operator today. At this time, I would like to welcome everyone to Zim Integrated Shipping Services first quarter 2025 financial results conference call. All lights have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Elena Holzman, head of investor relations. Please go ahead.

Thank you, operator, and welcome to ZIM's first quarter 2025 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 that current events or results may differ, including materially. 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 2024 annual report on Form 20F filed with the SEC on March 12th. 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?

...moment to address the market environment. In recent weeks, it has become even clearer that we operate in a highly dynamic industry with a range of diverse external factors affecting both supply and demand in both the short and longer term. After two months of depressed Trans-Pacific volumes, last week, the United States and China announced a 90-day suspension on mutual tariffs, enabling a reversal of the trend in cargo movement between the two countries. Overall, we view this development as positive. However, in the absence of a longer-term agreement, we remain cautious in terms of our expectation for Trans-Pacific trade during the remainder of the 2025. It remains too early to determine whether the surge in the demand we have seen in the last few days represents a return to normalize US-China volumes moving forward. Additionally, The updated USTR rule introducing short port fees on Chinese built and owned vessels has added another level of uncertainty. We are actively exploring a mitigation plan and assessing the financial impact of the proposed action. As we look ahead, with our core focus on continuing to navigate the highly uncertain geopolitical and macroeconomic conditions, we are confident in our agile approach and competitive position in the industry. Turning now to our financial results. Following an exceptional 2024, both financially and operationally, we began 2025 with a strong first quarter performance consistent with our expectations. Upscaling our fleet, employing larger vessels that have improved our cost structure, coupled with strong underlying demand, once again drove double-digit carried volume growth year over year and enhanced profitability. Slide number four. we generated revenue of $2 billion and net income of $296 million in the first quarter, representing year-over-year increases of 28% and 222% respectively. Q1, adjusted EBITDA was $779 million and adjusted EBIT was $463 million. with adjusted EBITDA margin of 39% and adjust EBIT margin of 23%. We maintain total liquidity of $3.4 billion as of March 31st, which at quarter end included $382 million paid in early April as a final dividend on account of 2024 results. Slide number five. We remain committed to return capital to shareholders. Per our dividend policy to distribute 30% of quarterly net income, our board of directors has declared a dividend of 74 cents per share or a total of $89 million based on Q1 results. Despite the considerable uncertainty, we are maintaining our full year guidance ranges. To remind you, we anticipate Adjust EBITDA between $1.6 billion to $2.2 billion and Adjust EBIT between $350 million and $950 million, with better performance still expected in the first half of the year versus the second half. Xavier, our CFO, will provide additional concepts and our underlying assumptions for our 25 guidance later on the call. Slide number six. Against the backdrop of the uncertainties that I mentioned before, planning is internally difficult, but we remain committed to a proactive approach we continue to take steps in line with our strategic objectives that further enhance business resilience, both commercially and operationally, and competitive position in the industry. Over the past several weeks, we've adjusted our network, underscoring the agile nature of our commercial strategy, Our actions are a response primarily to changes in the Trans-Pacific demand as evolving US tariff policy impacts global trade. Initially, in coordination with our partner, we modified our service rotations to mitigate the impact of the drop in export from China to the United States. while ensuring we maintain extensive port coverage to uphold our service commitment. In light of last week's development, we are again realigning our network to account for a return back to more normalized China-US trade relations. Similarly, we have also reversed our initial decision to suspend our ZIM Central China Express Line ZX2 service, illustrating again our agility to react rapidly to changing market conditions. In terms of other demand trends in the region during this period, we've seen improved volumes from other Southeast Asian markets such as Vietnam and Thailand where we have a strong foothold. In recent years, we have expanded our position throughout Southeast Asia to benefit from the growth in manufacturing in the region and to diversify our business. This strategic positioning helped Zim capture volume to partially compensate for the decline in Chinese cargo to the US during the beginning of the second quarter. We are adopting a similar strategy in Latin America to diversify our operation and increase our business resilience. We are strengthening our presence in the region to take advantage of the anticipated growth in trade between Latin America and the United States, as well as China and the region. Overall, the primary point to highlight is that ZIM has long recognized the importance of taking a nimble approach to fleet deployment. Identifying new growth opportunities and leveraging our commercial agility has been and continues to be a core strength for ZIM. We continue to maintain flexibility at all times to reshuffle vessel capacity based on demand. We expect to continue to react in changing market conditions as dynamically as possible. Our commercial success and improved profitability have been made possible by our transformed fleet. After receiving all 46 new builds we contracted in 2021 and 2022, which significantly improved the efficiency of our operated capacity, we entered the new year deploying larger, modern vessels well suited to the trade in which we operate. After growing our operated capacity for two years, we have regained optionality, which allows us to adapt ZIM capacity as market conditions change or our commercial strategy shifts. Moving forward, our goal has been to maintain and further enhance our competitive position while capitalizing on attractive opportunities that will ensure our fleet remains modern and cost-effective. Consistent with this long-term approach, we recently secured a 12-year charter for 10 11,500 TU new-build LNG dual-fuel container ships from an affiliate of the TMS group. This charter agreement will ensure access to an important and versatile vessel segment that is generally unavailable in the charter market and ideally suited for several of our global trades, enhancing our commercial agility and advancing our growth strategy. This also represents a strategic investment in our core LNG capacity. which serve as a critical commercially differentiator for Zimp. As we expect, it will be commercially valuable with the growing demand from customers for eco-friendly shipping solutions. This vessel will also support our long-term decarbonization objectives. This was an early adapter of LNG technology, which has helped us achieve significant milestones in our ESG journeys. As we highlight in our 24 ESG reports, which we plan to publish shortly, we reduced our carbon intensity by 16% in 2024 compared to 2023. Moreover, in 2024, we surpassed our 25 target of a 30% reduction versus the 21 baseline, reaching a 35% decrease. We remain committed to ESG as a core value, and in this report, our sevens, we detail ZIM decarbonization roadmap toward net zero by 2050, together with a comprehensive overview of our ESG initiatives, achievement programs, and updated targets. Overall, we remain confident in our strategy and competitive position in the industry. We entered 2025 with a transformed fleet of cost and fuel efficient capacity, approximately 40% of which is LNG powered today, and are pleased to have taken steps to advance our fleet strategy for the future. Our nimble commercial approach, together with the prudent investment in our fleet equipment and technology, continue to drive resilience in Zim's business. On this note, I will turn the call over to Xavier, our CFO, for a more detailed discussion of our financial results, 2025 guidance, as well as additional comments on the market environment. Xavier, please go ahead.