ZIM Integrated Shipping’s Top-Line Performance Provides Insight into Inflation Prospects

Jun 26, 2023 | Macro Insights, No Bull Economics

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A sharp drop in ZIM’s revenues reveals both lower shipping rates and lower demand for goods. Both speak to a deflationary outlook and, further, analyst estimates point to expectations that these deflationary trends could continue for the next few years.

Commentary

  • ZIM Integrated Shipping Services Ltd. provides container shipping and related services. It provides door-to-door and port-to-port transportation services for various types of customers, including end-users, consolidators, and freight forwarders. At the end of 2022, it operated a fleet of 150 vessels, which included 139 container vessels, 11 vehicle transport vessels & a network of 67 weekly lines.
  • A look at ZIM’s annual revenue growth shows covid’s impact on shipping costs, which skyrocketed during the ensuing supply chain crisis – thus driving significant inflation for the price of goods. 
ZIM Revenue Growth Graph
  • However, a look at ZIM’s quarterly revenue performance shows a sharp, recent decline in both shipping demand and shipping charges consistent with a notable shift in consumer spending from goods to services.
  • This trend is helping to drive deflationary pressure on the price of goods.  
ZIM Quarterly Revenue Growth Graph
  • It is further notable that Wall Street analysts are forecasting subdued revenues & profitability for ZIM over the next several years – suggesting low expectations for the demand for goods (and economic growth) over the foreseeable future.
ZIM EBITDA Estimates Graph
  • This outlook has important valuation implications for ZIM shares.
ZIM Stock Performance Graph
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