Expecting to best its second-quarter performance ¡ª its strongest in a decade ¡ª in the next two quarters, Zim Integrated Shipping Services is offering to buy up to $58.5 million in debt from bondholders while it considers launching an initial public offering.
The Israel-based container line said in a statement Tuesday the price for the series of notes would be determined in a Dutch auction, and that it¡¯s considering offering its securities to the public and has retained help from investment banks for such a process. If Zim pursues an initial public offering, it would be its fourth attempt since 2008 after ¡°weak market conditions and a poor earnings record¡± scuppered past efforts in 2008, 2011, and 2016, according to maritime analyst Alphaliner.
The financial performance of Zim and the broader shipping industry have improved since then. Zim on Aug. 19 reported a net profit of $25.3 million in the second quarter, its best quarterly result since 2010 and a 394 percent increase over Q2 in 2019. Its earnings before interest, taxes, depreciation, and amortization (EBITDA) grew 53.7 percent to $145 million. Carriers enjoyed their most profi second quarter in a decade, posting total profits of $2.7 billion, according to Sea-Intelligence Maritime Analysis.
Zim is confident its financial performance will improve through the year, thanks to speeding up its business improvements and ¡°the expected positive impact of seasonality that is generally experienced in the container shipping industry¡± in the second half of the year. The company¡¯s confidence is also reflected in the launch of new services, as it reentered the Asia-US West Coast market in June with an expedited service, and last week said it would an expedited service between China and Australia, a reentry into the trade after pulling out five years ago.
¡°... The company continues to explore options which may contribute to strengthen its capital structure, including by way of private or public equity and/or debt issuance,¡± Zim said.
Zim Integrated Shipping Services is the 10th-largest global container line, after Pacific International Lines lost its rank through the sale of some of its fleet, according to Alphaliner¡¯s revised rankings released l
