ZIM Integrated Shipping Services Ltd. (Form: 6-K, Received: 05/19/2021 07:31:48)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF THE

SECURITIES EXCHANGE ACT OF 1934

For the month of May, 2021

Commission File Number: 001-39937

ZIM Integrated Shipping Services Ltd.

(Exact Name of Registrant as Specified in Its Charter)

9 Andrei Sakharov Street

P.O. Box 15067

Matam, Haifa 3190500, Israel

+972 (4) 865-2000

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F

Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes

On May 19, 2021, ZIM Integrated Shipping Services Ltd. (the “Company”) issued a press release announcing its consolidated results for the three months ended on March 31, 2021. A copy of this press release and the Company’s consolidated financial statements for the period ended on March 31, 2021 are attached herewith as Exhibit 99.1 and Exhibit 99.2, respectively.

The information in this Form 6-K (including Exhibit 99.1 and Exhibit 99.2) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ZIM INTEGRATED SHIPPING SERVICES LTD.

	By:	/s/ Noam Nativ
		Noam Nativ
		EVP General Counsel and Corporate Secretary

Date: May 19, 2021

EXHIBIT INDEX

EXHIBIT NO.		DESCRIPTION
99.1		Press Release dated May 19, 2021
99.2		Consolidated financial statements for the three month period ended on March 31, 2021

Exhibit 99.1

ZIM Reports Financial Results for the First Quarter of 2021

Generates Record Quarterly Net Income of $590 Million and
Adjusted EBITDA of $821 Million

Increases 2021 Guidance to Between $2.5 Billion and $2.8 Billion of Adjusted EBITDA and Between $1.85 Billion to $2.15 Billion of Adjusted EBIT

Announces Special Dividend of Approximately $238 Million, or $2.00 Per Share, on Top of 2021 Annual Dividend

Haifa, Israel, May 19, 2021 – ZIM Integrated Shipping Services Ltd. (NYSE: ZIM), a global container liner shipping company, announced today its consolidated results for the three months ended March 31, 2021.

First Quarter 2021 Highlights

Net income for the first quarter was $589.6 million (compared to a loss of $11.9 million in the first quarter of 2020), or $5.35 per share¹

Adjusted EBITDA² for the first quarter was $820.5 million, a year-over-year increase of 744%

Operating income (EBIT) for the first quarter was $683.5 million, a year-over-year increase of 2,645%

Adjusted EBIT for the first quarter was $687.8 million, a year-over-year increase of 2,430%

¹ Earnings per share calculation for all periods reflect a share split of 1:10 that became effective in 2021.

² See disclosure regarding “Use of Non-IFRS Financial Measures” below.

Revenues for the first quarter were $1.74 billion, a year-over-year increase of 112%

ZIM carried 818 thousand TEUs in the first quarter of 2021, a year-over-year increase of 28%

The average freight rate per TEU in the first quarter of 2021 was $1,925, a year-over-year increase of 76%

Net leverage ratio³ of 0.5x at March 31, 2021, compared to 1.2x at December 31, 2020

Completed IPO, raising $204 million in net proceeds

Announced strategic long-term chartering agreement with Seaspan for ten "green" LNG-fueled vessels demonstrating ZIM's commitment to reducing its carbon footprint and leading environmentally friendly practices in the shipping industry

Subsequent to quarter end, announced full early redemption of $349 million principal amount of Series 1 and 2 Notes due 2023 payable in June 2021

Declared a special cash dividend of approximately $238 million, or $2.00 per ordinary share, to be paid on September 15, 2021, to holders of the ordinary shares as of August 25, 2021; reiterated plan to distribute annual dividend of 30-50% of 2021 net income in 2022

Eli Glickman, ZIM President & CEO, stated, “This is truly a momentous time in ZIM’s 75-year history. Following our successful IPO to become the first global container liner to list in the U.S., we are proud of our demonstrated accomplishments based on seamless execution aligned with our stated objectives. Driven by ZIM’s differentiated approach and proactive strategies, we generated our highest ever quarterly net profit, EBITDA, and cash flow, while continuing to deliver industry leading margins. We also significantly strengthened our balance sheet, with shareholder equity now in excess of $1 billion. In a short time since going public, we have also achieved important milestones for shareholders. Specifically, we significantly strengthened our position in the growing and strategic Pacific and Intra Asia trades, with our long-term chartering agreement for large LNG dual-fuel container vessels and the launch of new services to address unmet need in profitable routes to generate superior growth. We also drew on our strong cash flow to redeem ZIM’s $349 million outstanding Series 1 and 2 Notes sooner than expected and earlier than the stated maturity by two years.”

³ Net leverage ratio is defined as face value of short- and long-term debt less cash, cash equivalents and short-term deposits divided by Adjusted EBITDA of the last twelve-month period.

Mr. Glickman added, “Based on our success further strengthening our balance sheet, we are pleased to allocate capital to invest in new equipment to continue to best serve customers while returning capital to shareholders. With today’s declaration of a special dividend, we will be distributing approximately $238 million, or $2.00 per share, in line with our commitment to unlock significant value. Importantly, this dividend is over and above our 2021 annual dividend guidance, supplementing the 30-50% of 2021 net income we expect to distribute in 2022.”

Mr. Glickman concluded, “As a result of our outstanding execution and the full completion of freight contracts at higher rates, we have substantially raised our full year outlook, with 2021 Adjusted EBITDA now expected to be between $2.5 billion and $2.8 billion, more than 75% higher than the midpoint of our previous guidance range. Going forward, we remain poised to continue leveraging our agility to maximize profitability and advance ZIM’s position as an innovative digital leader of seaborne transportation and logistics services with attractive growth engines.”

Summary of Key Financial and Operational Results (Q1’21 vs. Q1’20 unless otherwise noted)

	Q1’21		Q1’20
Carried volume (K-TEUs)		818		638
Average freight rate ($/TEU)		1,925		1,091
Revenue ($ in millions)		1,744		823
Operating income (EBIT) ($ in millions)		683		25
Profit (loss) before income taxes ($ in millions)		644		(9	)
Net income (loss) ($ in millions)		590		(12	)
Adjusted EBITDA ($ in millions)		821		97
Adjusted EBIT ($ in millions)		688		27
Adjusted EBITDA margin (%)		47		12
Adjusted EBIT margin (%)		39		3
Net cash generated from operating activities ($ in millions)		777		102
Earnings (loss) per share (fully diluted) ($)		5.13		(0.14	)
Free cash flow ($ in millions)		643		98
Net debt ($ in millions) (Q1’21 vs. Q4’20)		915		1,236

Financial and Operating Results for the First Quarter Ended March 31, 2021

Total revenues were $1.74 billion for the first quarter of 2021, compared to $823.2 million for the first quarter of 2020, primarily driven by an increase in revenues from containerized cargo, reflecting increases in both freight rates and carried volume.

Operating income (EBIT) for the first quarter of 2021 was $683.5 million, compared to $24.9 million for the first quarter of 2020.

Net income for the first quarter of 2021 was $589.6 million, compared to a net loss of $11.9 million for the first quarter of 2020.

Adjusted EBITDA was $820.5 million for the first quarter of 2021, compared to $97.2 million for the first quarter of 2020. Adjusted EBIT was $687.8 million for the first quarter of 2021, compared to $27.2 million for the first quarter of 2020. Adjusted EBITDA and Adjusted EBIT margins for the first quarter of 2021 were 47% and 39%, respectively. This compares to 12% and 3% for the first quarter of 2020, respectively.

Net cash generated from operating activities was $777.4 million for the first quarter of 2021, compared to $101.6 million for the first quarter of 2020.

ZIM carried 818 thousand TEUs for the first quarter of 2021, compared to 638 thousand TEUs in the first quarter of 2020. The average freight rate per TEU was $1,925 for the first quarter of 2021, compared to $1,091 for the first quarter of 2020.

Liquidity and Cash Flows

ZIM’s cash and cash equivalents increased by $618 million from $570 million at December 31, 2020 to $1.19 billion at March 31, 2021. Capital expenditures totaled $133.0 million for the first quarter of 2021, compared to $3.6 million for the first quarter of 2020. Net debt decreased by $321 million from $1.24 billion as of December 31, 2020 to $915 million as of March 31, 2021. ZIM’s net leverage ratio as of March 31, 2021 was 0.5x, compared to 1.2x as of December 31, 2020.

Early Redemption of Notes

In April 2021, the Company announced the early redemption of 100% of its Series 1 and 100% of its Series 2 unsecured notes due 2023 at an aggregate principal amount of $349 million, payable on June 21, 2021, in accordance with the terms of the indenture governing the notes.

Long-Term Chartering Agreement

In February 2021, the Company announced a strategic agreement for the long-term charter of ten 15,000 TEU liquefied natural gas (LNG) dual-fuel container vessels to serve ZIM's Asia - US East Coast trade.

Special Dividend

On May 19, 2021, the Company’s Board of Directors declared a special cash dividend of approximately $238 million, or $2.00 per ordinary share. The special cash dividend will be paid on September 15, 2021, to all holders of record of ordinary shares as of August 25, 2021. The special dividend is supplemental to ZIM’s previously communicated 2021 annual dividend guidance, whereby the Company expects to distribute 30-50% of 2021 net income in 2022, subject to Board approval.

Updated Full-Year 2021 Guidance

The Company increased its full-year guidance and expects to generate in 2021 Adjusted EBITDA of between $2.5 billion and $2.8 billion and Adjusted EBIT of between $1.85 billion to $2.15 billion.

Use of Non-IFRS Measures in the Company’s 2021 Guidance

A reconciliation of the Company’s non-IFRS financial measures included in its full-year 2021 guidance to corresponding IFRS measures is not available on a forward-looking basis. In particular, the Company has not reconciled its Adjusted EBITDA and Adjusted EBIT because the various reconciling items between such non-IFRS financial measures and such corresponding IFRS measures cannot be determined without unreasonable effort due to the uncertainty regarding, and the potential variability of, the future costs and expenses for which the Company adjusts, the effect of which may be significant, and all of which are difficult to predict and are subject to frequent change.

Conference Call Details

Management will host a conference call and webcast (along with a slide presentation) to review the results and provide a corporate update today at 8:00 AM ET.

To access the live conference call by telephone, please dial the following numbers: United States +1-855-265-6958 or +1-718-705-8796; Israel +972-3-721-9662; or UK/international +44-121-281-8004. The call (and slide presentation) will be available via live webcast through ZIM’s website, located at the following link. Following the conclusion of the call, a replay of the conference call will be available on the Company's website.

About ZIM

ZIM Integrated Shipping Services Ltd. (NYSE: ZIM) is a global, asset-light container liner shipping company with leadership positions in the markets where it operates. Founded in Israel in 1945, ZIM is one of the oldest shipping liners, with over 75 years of experience, providing customers with innovative seaborne transportation and logistics services with a reputation for industry leading transit times, schedule reliability and service excellence. For additional information, please visit www.zim.com.

Forward-Looking Statements

This press release contains, or may be deemed to contain forward-looking statements (as defined in the U.S. Private Securities Litigation Reform Act of 1995 and the Israeli Securities Law, 1968). In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions about the Company, may include projections of the Company’s future financial results, its anticipated growth strategies and anticipated trends in its business. These statements are only predictions based on the Company’s current expectations and projections about future events or results. There are important factors that could cause the Company’s actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause such differences include, but are not limited to: market changes in freight, bunker, charter and other rates or prices, new legislation or regulation affecting the Company’s operations, new competition and changes in the competitive environment, the outcome of legal proceedings to which the Company is a party, and other risks and uncertainties detailed from time to time in the Company’s filings with the U.S. Securities and Exchange Commission, including under the caption “Risk Factors” in its 2020 Annual Report.

Although the Company believes the expectations reflected in the forward-looking statements contained herein are reasonable, it cannot guarantee future results, level of activity, performance or achievements. Moreover, neither the Company nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. The Company assumes no duty to update any of these forward-looking statements after the date hereof to conform its prior statements to actual results or revised expectations, except as otherwise required by law.

The Company prepares its financial statements in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB).

Use of Non-IFRS Financial Measures

The Company presents non-IFRS measures as additional performance measures as the Company believes that it enables the comparison of operating performance between periods on a consistent basis. These measures should not be considered in isolation, or as a substitute for operating income, any other performance measures, or cash flow data, which were prepared in accordance with Generally Accepted Accounting Principles as measures of profitability or liquidity. Please note that Adjusted EBITDA does not take into account debt service requirements, or other commitments, including capital expenditures, and therefore, does not necessarily indicate the amounts that may be available for the Company’s use. In addition, Non-IFRS financial measures, as those presented by the Company, may not be comparable to similarly titled measures reported by other companies, due to differences in the way these measures are calculated.

Adjusted EBITDA is a non-IFRS financial measure which we define as net income (loss) adjusted to exclude financial expenses (income), net, income taxes, depreciation and amortization in order to reach EBITDA, and further adjusted to exclude impairment of assets, non-cash charter hire expenses, capital gains (losses) beyond the ordinary course of business and expenses related to legal contingencies.

Adjusted EBIT is a non-IFRS financial measure which we define as net income (loss) adjusted to exclude financial expenses (income), net and income taxes, in order to reach our results from operating activities, or EBIT, and further adjusted to exclude non-cash charter hire expenses, impairment of assets, capital gains (losses) beyond the ordinary course of business and expenses related to legal contingencies.

Free cash flow is a non-IFRS measure which we define as net cash generated from operating activities plus the net cash generated (used) from investment activities.

See the reconciliation of net income to Adjusted EBITDA and Adjusted EBIT and net cash generated from operating activities to free cash flow under "Reconciliation of Non-IFRS Measures" below.

Investor Relations:

Elana Holzman
ZIM Integrated Shipping Services Ltd.
+972-4-865-2300
holzman.elana@zim.com

Leon Berman
The IGB Group
212-477-8438
lberman@igbir.com

Media:

Avner Shats
ZIM Integrated Shipping Services Ltd.
+972-4-865-2520
shats.avner@zim.com

CONSOLIDATED BALANCE SHEET

(U.S. dollars in thousands)

	Three Months ended March 31,						Year ended December 31,
	2021			2020			2020
Assets
Vessels		1,299,718			737,047			948,004
Containers and handling equipment		665,636			437,639			520,887
Other tangible assets		64,466			67,877			67,133
Intangible assets		66,808			65,716			66,465
Investments in associates		13,544			9,171			8,441
Other investments		3,147			2,717			4,888
Trade and other receivables		5,647			5,390			5,293
Deferred tax assets		1,619			1,018			1,502
Total non-current assets		2,120,585			1,326,575			1,622,613

Assets classified as held for sale					10,564
Inventories		86,256			56,699			52,237
Trade and other receivables		700,385			306,557			520,001
Other investments		63,015			59,510			58,976
Cash and cash equivalents		1,188,408			196,741			570,414
Total current assets		2,038,064			630,071			1,201,628
Total assets		4,158,649			1,956,646			2,824,241

Equity
Share capital and reserves		1,992,378			1,783,479			1,790,794
Accumulated deficit		(936,101	)		(2,053,010	)		(1,523,528	)
Equity attributable to owners of the Company		1,056,277			(269,531	)		267,266
Non-controlling interests		3,841			4,327			7,189
Total equity		1,060,118			(265,204	)		274,455

Liabilities
Lease liabilities		1,055,126			659,649			811,840
Loans and other liabilities		440,196			550,265			519,471
Employee benefits		63,198			58,252			66,626
Deferred tax liabilities		34,159			347			339
Total non-current liabilities		1,592,679			1,268,513			1,398,276

Trade and other payables		538,717			431,223			398,876
Provisions		25,631			16,081			21,420
Contract liabilities		295,653			125,109			230,469
Lease liabilities		508,154			236,835			362,176
Loans and other liabilities		137,697			144,089			138,569
Total current liabilities		1,505,852			953,337			1,151,510
Total liabilities		3,098,531			2,221,850			2,549,786

Total equity and liabilities		4,158,649			1,956,646			2,824,241

CONSOLIDATED INCOME STATEMENTS

(U.S. dollars in thousands, except per share data)

	Three months ended March 31,						Year ended December 31,
	2021			2020			2020
Income from voyages and related services		1,744,335			823,215			3,991,696

Cost of voyages and related services

Operating expenses and cost of services		(880,627	)		(698,388	)		(2,835,112	)
Depreciation		(128,129	)		(67,063	)		(291,559	)

Gross profit		735,579			57,764			865,025

Other operating income		2,313			2,016			12,621
Other operating expenses		(84	)		(4	)		4,272
General and administrative expenses		(55,898	)		(35,377	)		(163,210	)
Share of profits of associates		1,545			497			3,341

Results from operating activities		683,455			24,896			722,049

Net finance expenses		(39,445	)		(33,727	)		(181,260	)

Profit (loss) before income taxes		644,010			(8,831	)		540,789

Income taxes		(54,422	)		(3,086	)		(16,599	)

Profit (loss) for the period		589,588			(11,917	)		524,190

Attributable to:

Owners of the Company		587,599			(13,549	)		517,961
Non-controlling interests		1,989			1,632			6,229

Profit (loss) for the period		589,588			(11,917	)		524,190

Earnings (loss) per share (US$)*
Basic earnings (losses) per 1 ordinary share		5.35			(0.14	)		5.18
Diluted earnings (losses) per 1 ordinary share		5.13			(0.14	)		4.96

Weighted average number of shares for EPS calculation*:
Basic		109,777,778			100,000,000			100,000,000
Diluted		114,508,115			100,000,000			104,530,892

(*) Reflect a share split of 1:10 that became effective in 2021, in all presented periods.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands)

	Three months ended March 31,						Year ended December 31,
	2021			2020			2020
Cash flows from operating activities
Profit (loss) for the year		589,588			(11,917	)		524,190

Adjustments for:
Depreciation and amortization		133,585			72,133			314,185
Impairment recovery in respect of tangible assets								(4,329	)
Net finance expenses		39,445			33,727			181,260
Share of profits and change in fair value of investees		(2,432	)		(497	)		(4,143	)
Capital gains		(431	)		(1,310	)		(8,814	)
Income taxes		54,422			3,086			16,599
		814,177			95,222			1,018,948

Change in inventories		(34,019	)		3,643			8,105
Change in trade receivables and other receivables		(174,298	)		2,243			(204,469	)
Change in trade and other payables including contract liabilities		175,698			9,203			68,670
Change in provisions and employee benefits		(728	)		(7,132	)		(2,152	)
		(33,347	)		7,957			(129,846	)

Dividends received from associates		711			15			4,360
Interest received		769			876			2,317
Income taxes paid		(4,909	)		(2,495	)		(14,983	)

Net cash generated from operating activities		777,401			101,575			880,796

Cash flows from investing activities
Proceeds from sale of tangible assets, intangible assets, investments and affiliates		504			1,349			6,717
Acquisition of tangible assets, intangible assets and investments		(132,998	)		(3,561	)		(42,641	)
Change in other investments and other receivables		(2,061	)		(1,241	)		763
Net cash used in investing activities		(134,555	)		(3,453	)		(35,161	)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands)

	Three months ended March 31,						Year ended December 31,
	2021			2020			2020
Cash flows from financing activities
Issuance of share capital, net of issuance costs		205,394
Sale and lease back transactions					8,400			9,052
Repayment of borrowings and lease liabilities		(190,403	)		(63,557	)		(336,225	)
Change in short-term loans		(975	)		3,571			6,071
Dividend paid to non-controlling interests		(2,808	)					(3,344	)
Interest and other financial expenses paid		(34,851	)		(30,467	)		(135,952	)
Net cash used in financing activities		(23,643	)		(82,053	)		(460,398	)
Net change in cash and cash equivalents		619,203			16,069			385,237
Cash and cash equivalents at beginning of the period		570,414			182,786			182,786
Effect of exchange rate fluctuation on cash held		(1,209	)		(2,114	)		2,391
Cash and cash equivalents at the end of the period		1,188,408			196,741			570,414

RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBIT

(U.S. dollars in millions)

	Three months ended March 31,
	2021			2020
Net income (loss)		590			(12	)
Financial expenses (income), net		39			34
Income taxes		54			3
Operating income (EBIT)		683			25
Non-cash charter hire expenses		1			2
Expenses related to legal contingencies		4			0
Adjusted EBIT		688			27
Adjusted EBIT margin		39	%		3	%

RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA

(U.S. dollars in millions)

	Three months ended March 31,
	2021			2020
Net income (loss)		590			(12	)
Financial expenses (income), net		39			34
Income taxes		54			3
Depreciation and amortization		134			72
EBITDA		817			97
Expenses related to legal contingencies		4			0
Adjusted EBITDA		821			97
Adjusted EBITDA margin		47	%		12	%

RECONCILIATION OF NET CASH GENERATED FROM OPERATING ACTIVITES TO FREE CASH FLOW

(U.S. dollars in millions)

	Three months ended March 31,
	2021			2020
Net cash generated from operating activities		777			102
Net cash used in investing activities		(134	)		(4	)
Free cash flow		643			98

Exhibit 99.2

ZIM INTEGRATED SHIPPING SERVICES LTD.

CONDENSED CONSOLIDATED UNAUDITED INTERIM

FINANCIAL STATEMENTS

MARCH 31, 2021

INDEX TO CONDENSED CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS

		Page
FINANCIAL STATEMENTS:

Condensed consolidated unaudited interim Statements of Financial Position		3

Condensed consolidated unaudited interim Income Statements		4

Condensed consolidated unaudited interim Statements of Comprehensive Income		5

Condensed consolidated unaudited interim Statements of Changes in Equity		6

Condensed consolidated unaudited interim Statements of Cash Flows		7-8

Notes to the condensed consolidated unaudited interim Financial Statements		9-13

CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF FINANCIAL POSITION

		March 31,						December 31,
		2021			2020			2020

	Note	US $’000
Assets
Vessels	6		1,299,718			737,047			948,004
Containers and handling equipment	6		665,636			437,639			520,887
Other tangible assets			64,466			67,877			67,133
Intangible assets			66,808			65,716			66,465
Investments in associates			13,544			9,171			8,441
Other investments			3,147			2,717			4,888
Trade and other receivables			5,647			5,390			5,293
Deferred tax assets			1,619			1,018			1,502
Total non-current assets			2,120,585			1,326,575			1,622,613

Assets classified as held for sale						10,564
Inventories			86,256			56,699			52,237
Trade and other receivables			700,385			306,557			520,001
Other investments			63,015			59,510			58,976
Cash and cash equivalents			1,188,408			196,741			570,414
Total current assets			2,038,064			630,071			1,201,628
Total assets			4,158,649			1,956,646			2,824,241
Equity
Share capital and reserves	5(a)		1,992,378			1,783,479			1,790,794
Accumulated deficit			(936,101	)		(2,053,010	)		(1,523,528	)
Equity attributable to owners of the Company			1,056,277			(269,531	)		267,266
Non-controlling interests			3,841			4,327			7,189
Total equity			1,060,118			(265,204	)		274,455

Liabilities
Lease liabilities			1,055,126			659,649			811,840
Loans and other liabilities	4(c)		440,196			550,265			519,471
Employee benefits			63,198			58,252			66,626
Deferred tax liabilities			34,159			347			339
Total non-current liabilities			1,592,679			1,268,513			1,398,276

Trade and other payables			538,717			431,223			398,876
Provisions			25,631			16,081			21,420
Contract liabilities			295,653			125,109			230,469
Lease liabilities			508,154			236,835			362,176
Loans and other liabilities			137,697			144,089			138,569
Total current liabilities			1,505,852			953,337			1,151,510
Total liabilities			3,098,531			2,221,850			2,549,786
Total equity and liabilities			4,158,649			1,956,646			2,824,241

/s/ Yair Seroussi	/s/ Eli Glickman	/s/ Xavier Destriau
Yair Seroussi	Eli Glickman	Xavier Destriau
Chairman of the Board of Directors	President & Chief Executive Officer	Chief Financial Officer

Date of approval of the Financial Statements: May 19, 2021

The accompanying Notes are an integral part of these condensed consolidated unaudited interim Financial Statements.

CONDENSED CONSOLIDATED UNAUDITED INTERIM INCOME STATEMENTS

		Three months ended March 31,						Year ended December 31,
		2021			2020			2020

	Note	US $’000
Income from voyages and related services			1,744,335			823,215			3,991,696
Cost of voyages and related services:
Operating expenses and cost of services			(880,627	)		(698,388	)		(2,835,112	)
Depreciation			(128,129	)		(67,063	)		(291,559	)
Gross profit			735,579			57,764			865,025

Other operating income			2,313			2,016			12,621
Other operating expenses			(84	)		(4	)		4,272
General and administrative expenses			(55,898	)		(35,377	)		(163,210	)
Share of profit of associates			1,545			497			3,341

Results from operating activities			683,455			24,896			722,049

Finance income			6,815			4,728			8,103
Finance expenses			(46,260	)		(38,455	)		(189,363	)

Net finance expenses			(39,445	)		(33,727	)		(181,260	)

Profit (loss) before income taxes			644,010			(8,831	)		540,789

Income taxes	4(b)		(54,422	)		(3,086	)		(16,599	)

Profit (loss) for the period			589,588			(11,917	)		524,190

Attributable to:

Owners of the Company			587,599			(13,549	)		517,961
Non-controlling interests			1,989			1,632			6,229

Profit (loss) for the period			589,588			(11,917	)		524,190


Earnings (loss) per share (US$)
Basic earnings (losses) per 1 ordinary share	9		5.35			(*)(0.14	)		5.18
Diluted earnings (losses) per 1 ordinary share	9		5.13			(*)(0.14	)		4.96

(*) Restated to reflect a share split of 1:10 that became effective in 2021 (see Note 5(a)).

The accompanying Notes are an integral part of these condensed consolidated unaudited interim Financial Statements.

CONDENSED CONSOLIDATED UNAUDITED INTERIM STATEMENTS OF COMPREHENSIVE INCOME

	Three months ended March 31,						Year ended December 31,
	2021			2020			2020

	US $’000
Profit (loss) for the period		589,588			(11,917	)		524,190

Other components of Comprehensive Income

Items of other comprehensive income that were or will be reclassified to profit and loss

Foreign currency translation differences for foreign operations		(3,302	)		(2,207	)		4,019

Items of other comprehensive income that would never be reclassified to profit and loss

Net change in fair value of investments in equity instruments at fair value through other comprehensive income, net of tax		(172	)		(297	)		563
Defined benefit pension plans actuarial gains, net of tax		-			3,062			174

Other comprehensive income for the period, net of tax		(3,474	)		558			4,756

Total comprehensive income for the period		586,114			(11,359	)		528,946

Attributable to:
Owners of the Company		585,167			(12,223	)		523,815
Non-controlling interests		947			864			5,131

Total comprehensive income for the period		586,114			(11,359	)		528,946

The accompanying Notes are an integral part of these condensed consolidated unaudited interim Financial Statements.

CONDENSED CONSOLIDATED UNAUDITED INTERIM STATEMENTS OF CHANGES IN EQUITY

	Attribute to the owners of the Company
	*Share capital ()**		General reserves (**)		Translation reserve			Accumulated deficit			Total			Non- controlling interests			Total equity

	US $’000
For the three months period ended March 31, 2021

Balance at January 1, 2021		700,310		1,106,470		(15,986	)		(1,523,528	)		267,266			7,189			274,455
Profit for the period									587,599			587,599			1,989			589,588
Other comprehensive income for the period, net of tax						(2,260	)		(172	)		(2,432	)		(1,042	)		(3,474	)
Issuance of share capital, net of issuance costs		203,513										203,513						203,513
Share-based compensation				331								331						331
Dividend to non-controlling interests in subsidiaries															(4,295	)		(4,295	)
Balance at March 31, 2021		903,823		1,106,801		(18,246	)		(936,101	)		1,056,277			3,841			1,060,118

For the three months period ended March 31, 2020

Balance at January 1, 2020		700,310		1,105,350		(21,103	)		(2,042,226	)		(257,669	)		5,402			(252,267	)
Profit (loss) for the year									(13,549	)		(13,549	)		1,632			(11,917	)
Other comprehensive income for the period, net of tax						(1,439	)		2,765			1,326			(768	)		558
Transaction with an interested party, net of tax				182								182						182
Share-based compensation				179								179						179
Dividend to non-controlling interests in subsidiaries															(1,939	)		(1,939	)
Balance at March 31, 2020		700,310		1,105,711		(22,542	)		(2,053,010	)		(269,531	)		4,327			(265,204	)

For the year ended December 31, 2020

Balance at January 1, 2020		700,310		1,105,350		(21,103	)		(2,042,226	)		(257,669	)		5,402			(252,267	)
Profit (loss) for the year									517,961			517,961			6,229			524,190
Other comprehensive income for the year						5,117			737			5,854			(1,098	)		4,756
Transaction with an interested party, net of tax.				630								630						630
Share-based compensation				490								490						490
Dividend to non-controlling interests in subsidiaries															(3,344	)		(3,344	)
Balance at December 31, 2020		700,310		1,106,470		(15,986	)		(1,523,528	)		267,266			7,189			274,455

(*) See Note 5(a).

(**) Include reserves related to transactions with an interested party and share-based compensation.

The accompanying Notes are an integral part of these condensed consolidated interim Financial Statements.

CONDENSED CONSOLIDATED UNAUDITED INTERIM STATEMENTS OF CASH FLOWS

	Three months ended March 31,						Year ended December 31,
	2021			2020			2020

	US $’000
Cash flows from operating activities
Profit (loss) for the period		589,588			(11,917	)		524,190

Adjustments for:
Depreciation and amortisation		133,585			72,133			314,185
Impairment recovery in respect of tangible assets								(4,329	)
Net finance expenses		39,445			33,727			181,260
Share of profits and change in fair value of investees		(2,432	)		(497	)		(4,143	)
Capital gain		(431	)		(1,310	)		(8,814	)
Income taxes		54,422			3,086			16,599
		814,177			95,222			1,018,948

Change in inventories		(34,019	)		3,643			8,105
Change in trade and other receivables		(174,298	)		2,243			(204,469	)
Change in trade and other payables including contracts liabilities		175,698			9,203			68,670
Change in provisions and employee benefits		(728	)		(7,132	)		(2,152	)
		(33,347	)		7,957			(129,846	)

Dividends received from associates		711			15			4,360
Interest received		769			876			2,317
Income taxes paid		(4,909	)		(2,495	)		(14,983	)
Net cash generated from operating activities		777,401			101,575			880,796

Cash flows from investing activities
Proceeds from sale of tangible assets, intangible assets, investments and affiliates		504			1,349			6,717
Acquisition of tangible assets, intangible assets and investments		(132,998	)		(3,561	)		(42,641	)
Change in other investments and other receivables		(2,061	)		(1,241	)		763
Net cash used in investing activities		(134,555	)		(3,453	)		(35,161	)

The accompanying Notes are an integral part of these condensed consolidated unaudited interim Financial Statements.

CONDENSED CONSOLIDATED UNAUDITED INTERIM STATEMENTS OF CASH FLOWS

	Three months ended March 31,						Year ended December 31,
	2021			2020			2020

	US $’000
Cash flows from financing activities
Issuance of share capital, net of issuance costs (see Note 5(a))		205,394
Sale and lease back transactions					8,400			9,052
Repayment of borrowings and lease liabilities		(190,403	)		(63,557	)		(336,225	)
Change in short term loans		(975	)		3,571			6,071
Dividend paid to non-controlling interests		(2,808	)					(3,344	)
Interest and other financial expenses paid		(34,851	)		(30,467	)		(135,952	)
Net cash used in financing activities		(23,643	)		(82,053	)		(460,398	)

Net change in cash and cash equivalents		619,203			16,069			385,237
Cash and cash equivalents at beginning of the period		570,414			182,786			182,786
Effect of exchange rate fluctuation on cash held		(1,209	)		(2,114	)		2,391
Cash and cash equivalents at the end of the period		1,188,408			196,741			570,414

The accompanying Notes are an integral part of these condensed consolidated unaudited interim Financial Statements.

NOTES TO THE CONDENSED CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS

1	Reporting entity

ZIM Integrated Shipping Services Ltd. (hereinafter - the "Company" or "Zim") and its subsidiaries (hereinafter – "the Group" or "the Companies") and the Group’s interests in associates, operate in the field of container shipping and related services.

Zim is a company incorporated in Israel, with limited liability. ZIM’s ordinary shares have been listed on the New York Stock Exchange (the “NYSE”) under the symbol “ZIM” on January 28, 2021. The address of the Company’s registered office is 9 Andrei Sakharov Street, Haifa, Israel.

2	Basis of compliance

(a)

Statement of compliance

These condensed consolidated interim unaudited financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Company as at and for the year ended December 31, 2020 (hereafter – the “annual Financial Statements”). These condensed consolidated unaudited interim Financial Statements were approved by the Board of Directors on May 19, 2021.

(b)

Estimates

The preparation of Financial Statements in conformity with IFRSs requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The significant judgments made by management in applying the Group’s accounting policies and the principal assumptions used in the estimation of uncertainty were the same as those applied to the annual financial statements.

3	Significant accounting policies

The accounting policies applied by the Group in these unaudited condensed consolidated interim Financial Statements are the same as those applied by the Group in its annual Financial Statements.

4	Financial position

(a)

The container shipping industry is characterized in recent years by volatility in freight rates, charter rates and bunker prices, accompanied by significant uncertainties in the global trade (including further implications that might derive from the Covid-19 pandemic). Current market conditions impact positively, as during the first quarter of 2021 freight rates continued to increase, resulting in improved results of the Company.

In view of the aforementioned business environment and in order to constantly improve the Group’s results of operations and liquidity position, Management continues to optimize its network by entering into new partnerships and cooperation agreements and by upgrading its customer’s offerings, whilst seeking operational excellence and cost efficiencies. In addition, the Company continues to explore options which may contribute to strengthen its capital and operational structure. In respect of the Company’s initial public offering, completed in February 2021, see Note 5(a).

Since January 1, 2021, the Company has entered into multiple agreements for the purchase of containers (mostly new-build units) in an aggregate amount of US$588 million. During the first quarter of 2021, the Company recognized additions in an aggregated cost of US$104 million in respect of delivered containers, out of such purchases.

NOTES TO THE CONDENSED CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS

4	Financial position (Cont’d)

In February 2021, the Company entered into a strategic agreement with Seaspan, for the long-term charter of ten 15,000 TEU liquefied natural gas (LNG) dual-fuel container vessels, intended to be delivered between February 2023 and January 2024. Pursuant to the agreement, the Company will charter the vessels for a period of 12 years and has secured an option to later elect a total charter period of 15 years to be applied to all chartered vessels. According to the agreement, the Company expects to incur between US$16 million and US$17 million in annualized charter hire costs per vessel, over the term of the agreement, depending on the charter period elected. The Company was further granted by Seaspan a right of first refusal to purchase the chartered vessels should Seaspan choose to sell them during the charter period and an option to purchase the vessels at the end of the charter term. The Company intends to deploy these vessels on its Asia-US East Coast Trade, as an enhancement to its service on this strategic trade.

As at March 31, 2021, the Company complies with its financial covenants. The Company’s liquidity amounts to US$1,189 million (Minimum Liquidity required is US$125 million) - see also Note 12(c) to the 2020 annual financial statements.

(b)

In accordance with IAS 34 (Interim financial reporting), the Company records its tax expenses based on the estimated annual effective tax rate. In light of its current results (see also Note 4(a)), the Company expects to utilize its carry-forward tax losses and therefore considers utilization of carry-forward tax losses in its estimated annual effective tax rate. The Company’s income tax expenses for the three months ended March 31, 2021 include $34 million of deferred tax expenses, which offset previously recorded deferred tax assets.

(c)

In March 2021, the Company made an early repayment of US$85 million of its Series 1 notes (Tranche C), in accordance with the related excess cash mechanism (see also Note 12(b) to the 2020 annual financial statements). In April 2021, the Company announced an additional early repayment under such mechanism (which also considered balances during April 2021), in respect of its Series 1 and Series 2 notes (Tranches C and D), in a total amount of US$349 million, to be carried out in June 2021. This payment reflects a full settlement of the outstanding indebtedness related to such notes and will result in the removal of the related provisions and limitations.

(d)

Following the reporting date, the Company was served with a claim for an alleged patents infringement filed against it in the US. At this preliminary stage, based on the opinion of the Company’s legal advisors, the outcome of this matter cannot be assessed. See also Note 27 to the Company’s 2020 annual financial statements, in respect of contingencies.

(e)

In May 2021, further to the above-mentioned expected full repayment of Series 1 and Series 2 notes, the Company’s Board of Directors approved a distribution of dividend of approximately US$2.00 per ordinary share (approximately US$238 million, assuming that by the record date, all options to purchase the Company’s ordinary shares that will be exercisable on or before the record date, will be exercised by their respective option holders). The dividend is scheduled to be paid on September 15, 2021, to all holders of ordinary shares on record as at August 25, 2021.

5	Capital and reserves

(a)

Share capital

In February 2021, the Company completed its initial public offering (IPO) of 15,000,000 ordinary shares (including shares issued upon the exercise of the underwriters’ option), at an offering price of $15.00 per share, for gross consideration of $225 million ($204 million, after deducting underwriting discounts and commissions and other offering costs). The Company’s ordinary shares began trading on The New York Stock Exchange (the “NYSE”) under the symbol “ZIM” on January 28, 2021.

NOTES TO THE CONDENSED CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS

5	Capital and reserves (cont’d)

Further to the approval of the Company’s General meeting in December 2020 and the completion of the Company’s IPO, the Company’s ordinary shares were amended to have no par value, as well as to reflect a share split of 1:10, in the form of issuing benefit shares (nine ordinary shares issued for each existing ordinary share). Accordingly, for earnings per share, these financial statements reflect the abovementioned share split retrospectively, in all presented periods.

(b)

Share-Based Payment Arrangements

During the first quarter of 2021, further to prior approvals of the Company’s Compensation committee, Audit committee and Board of Directors, and concurrently with the consummation of the Company’s initial public offering, the Company granted a senior member of the Company’s Management with options exercisable to its ordinary shares, according to the below terms (which also reflects the above-mentioned share split):

Grant date		Instrument terms		Number of instruments				Vesting Terms		Contractual life
January 27, 2021		Each option is exercisable into one ordinary share, at the exercise price per the offering price of $15.00			546,822			25% of the options shall vest upon the first anniversary of the grant date with the remaining options vesting in equal quarterly portions over the following three years period.		5 years

Information on fair value measurement

The weighted average fair value of the options on grant date was $5.32, measured using the Black & Scholes model, based on the following measurement inputs:

Share price on grant date		USD 15.00
Exercise price		USD 15.00
Expected volatility		40.2%
Expected life		5 years
Expected dividends		0%
Risk-free interest rate		0.46%

6	Right-of-use assets

	Balance at March 31,				Balance at December 31,
	2021		2020		2020

	US $’000
Vessels		1,180,642		621,654		826,678
Containers and handling equipment		485,865		398,502		466,070
Other tangible assets		44,757		49,145		47,911
		1,711,264		1,069,301		1,340,659

NOTES TO THE CONDENSED CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS

7	Segment information

ZIM is managed as one operating unit, generating revenues from operating a global liner service network of container shipping and related services. The Group service lines share the use of its resources and their performance are co-dependent. Accordingly, the chief operating decision maker manages and allocates resources to the entire liner network. As there is no appropriate allocation for the Group’s results, assets and liabilities, these are all attributed to the Group’s sole operating segment.

Freight revenues are disaggregated geographically by trade zone, as follows:

	Three months ended March 31,				Year ended December 31,
	2021		2020		2020

	US $’000
Freight Revenues from containerized cargo:
Pacific		812,164		314,205		1,860,554
Cross-Suez		202,514		92,729		392,679
Atlantic		159,549		152,944		577,443
Intra-Asia		312,022		86,878		453,127
Latin America		87,430		49,713		208,374
		1,573,679		696,469		3,492,177
Other Revenues (*)		170,656		126,746		499,519
		1,744,335		823,215		3,991,696

(*) Mainly related to demurrage, value-added services and non-containerized cargo.

8	Financial instruments

Financial instruments not measured at fair value

The carrying amounts of the Group’s financial assets and liabilities, including cash and cash equivalents, trade and other receivables, other investments, trade and other payables and loans and other liabilities, reflect reasonable approximation of their fair value.

NOTES TO THE CONDENSED CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS

9	Earnings (loss) per share

Basic and diluted earnings (loss) per share

	Three months ended March 31,					Year ended December 31,
	2021		2020			2020

	US $’000
Profit (loss) attributable to ordinary shareholders used to calculate basic and diluted earnings (loss) per share		587,599		(13,549	)		517,961
Weighted average number of ordinary shares used to calculate basic earnings (loss) per share		109,777,778		100,000,000			100,000,000
Effect of share options		4,730,337					4,530,892

Weighted average number of ordinary shares used to calculate diluted earnings (loss) per share		114,508,115		100,000,000			104,530,892

For the three months period ended March 31, 2020, options for 4,990,000 ordinary shares were excluded from the diluted weighted average number of ordinary shares calculation, as their effect would have been anti-dilutive.

The Company’s ordinary shares began trading on January 28, 2021. Due to the absence of a trading market for the Company’s ordinary shares prior to this date, the fair value of these shares during such period, for purposes of determining the exercise price for options, was determined by Company’s management and approved by the Company’s board of directors.

10	Related parties

During the first quarter of 2021, the total balance of loans and lease liabilities attributed to related parties, increased by a net amount of US$43 million, mainly due to charter hire of vessels - see also Note 28 to the 2020 annual financial statements.