ZIM Integrated Shipping Services : Quarterly Earnings Documents

ZIM INTEGRATED SHIPPING SERVICES LTD.

CONDENSED CONSOLIDATED UNAUDITED INTERIM

FINANCIAL STATEMENTS

SEPTEMBER 30, 2023

ZIM INTEGRATED SHIPPING SERVICES LTD.

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	6-7
Condensed consolidated unaudited interim Statements of Cash Flows	8-9
Notes to the condensed consolidated unaudited interim Financial Statements	10-18

ZIM INTEGRATED SHIPPING SERVICES LTD.

CONDENSED CONSOLIDATED UNAUDITED INTERIM STATEMENTS OF FINANCIAL POSITION

			September 30		December 31
	2023	2022	2022
Note			US $ in millions

Assets

Vessels

Containers and handling equipment

Other tangible assets

Intangible assets

Investments in associates

Other investments

Other receivables

Deferred tax assets

Total non-current assets

Inventories

Trade and other receivables

Other investments

Cash and cash equivalents

Total current assets

Total assets

Equity

Share capital and reserves

Retained earnings

Equity attributable to owners of the Company Non-controlling interests

Total equity

Liabilities

Lease liabilities

Loans and other liabilities

Employee benefits

Deferred tax liabilities

Total non-current liabilities

Trade and other payables

Provisions

Contract liabilities

Lease liabilities

Loans and other liabilities

Total current liabilities

Total liabilities

Total equity and liabilities

6 , 7

6 , 7

6 , 7

6 , 7

5

3,222.9	4,640.5	4,409.9
788.2	1,270.8	1,242.8
61.1	76.9	98.5
93.3	82.5	92.9
26.8	26.0	22.0
1,252.6	1,314.3	1,373.2
105.5	109.5	112.1
9.6		2.3		2.3
5,560.0		7,522.8		7,353.7
156.4	225.7	190.7
644.3	1,088.7	825.7
918.6	1,871.7	2,233.1
912.1	1,285.7	1,022.1
2,631.4			4,471.8			4,271.6
8,191.4		11,994.6		11,625.3
1,980.7	2,009.9	1,987.7
586.9		3,800.6		3,901.9
2,567.6	5,810.5	5,889.6
3.8		6.8		6.3
2,571.4		5,817.3		5,895.9
2,952.0	3,020.0	2,778.7
79.3	140.1	91.9
39.4	45.0	45.2
13.0		139.4		151.4
3,083.7		3,344.5		3,067.2
554.6	846.6	896.2
58.3	51.6	50.2
207.3	410.1	238.9
1,668.0	1,424.7	1,380.8
48.1	99.8	96.1
2,536.3			2,832.8			2,662.2
5,620.0	6,177.3	5,729.4
8,191.4			11,994.6			11,625.3

/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: November 15, 2023.

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

3

ZIM INTEGRATED SHIPPING SERVICES LTD.

CONDENSED CONSOLIDATED UNAUDITED INTERIM INCOME STATEMENTS

			Nine months ended		Three months ended		Year ended
			September 30		September 30		December 31
			2023	2022		2023			2022		2022
	Note					US $ in millions
Income from voyages and related services			3,956.9	10,372.7	1,273.0			3,227.5	12,561.6
Cost of voyages and related services
Operating expenses and cost of services	9		(2,922.0)	(3,630.2)	(1,008.4)			(1,249.6)	(4,764.5)
Depreciation			(1,212.8)	(989.7)	(417.4)			(373.7)	(1,370.3)
Impairment of assets	7		(2,034.9)			(2,034.9)
Gross profit (loss)
		(2,212.8)	5,752.8	(2,187.7)		1,604.2	6,426.8
Other operating income			2.5	40.8	0.6			21.5	48.9
Other operating expenses	7		(32.5)	(0.4)	(22.4)			(0.2)	(0.9)
General and administrative expenses			(209.4)	(244.0)	(63.9)			(82.0)	(338.3)
Share of profit (loss) of associates			(5.2)	1.9	(2.3)			0.8	(0.7)
Results from operating activities			(2,457.4)	5,551.1	(2,275.7)			1,544.3	6,135.8
Finance income			117.7	82.3	35.6			34.9	130.9
Finance expenses			(338.7)	(164.0)	(101.5)			(64.8)	(239.4)
Net finance expenses			(221.0)	(81.7)	(65.9)			(29.9)	(108.5)
Profit (loss) before income taxes			(2,678.4)	5,469.4	(2,341.6)			1,514.4	6,027.3
Income taxes			137.1	(1,256.9)	71.1			(348.7)	(1,398.3)
Profit (loss) for the period			(2,541.3)	4,212.5	(2,270.5)			1,165.7	4,629.0
Attributable to:
Owners of the Company			(2,547.2)	4,205.2	(2,272.6)			1,163.3	4,619.4
Non-controlling interests			5.9	7.3	2.1			2.4	9.6
Profit (loss) for the period
		(2,541.3)	4,212.5	(2,270.5)			1,165.7	4,629.0
Earnings (loss) per share (US$)
Basic earnings (loss) per 1 ordinary share	11		(21.19)	35.05	(18.90)			9.69	38.49
Diluted earnings (loss) per 1 ordinary share	11		(21.19)	34.91	(18.90)			9.66	38.35

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

4

ZIM INTEGRATED SHIPPING SERVICES LTD.

CONDENSED CONSOLIDATED UNAUDITED INTERIM STATEMENTS OF COMPREHENSIVE INCOME

		Nine months ended				Three months ended		Year ended
		September 30				September 30		December 31
		2023	2022				2023		2022	2022
					US $ in millions
Profit (loss) for the period	(2,541.3)	4,212.5	(2,270.5)		1,165.7	4,629.0
Other components of comprehensive income
Items of other comprehensive income that were or will be
reclassified to profit and loss
Foreign currency translation differences	(7.0)	(21.7)	(1.3)		(9.3)	(18.0)
for foreign operations
Net change in fair value of investments in debt instruments at	(25.6)			(19.5)
fair value through other comprehensive income, net of tax	(36.0)		(23.9)	(34.6)
Net change in fair value of investments in debt instruments at
fair value through other comprehensive income, reclassified	7.9			2.3
to profit and loss					2.6
Items of other comprehensive income that would never be
reclassified to profit and loss
Net change in fair value of investments in equity instruments	1.4			(0.2)
at fair value through other comprehensive income, net of tax	(3.1)		(1.6)	(1.9)
Defined benefit pension plans actuarial gains, net of tax	1.4		6.2			1.2		1.8		8.5
Other comprehensive income for the period, net of tax	(21.9)		(54.6)			(17.5)		(33.0)		(43.4)
Total comprehensive income for the period	(2,563.2)	4,157.9	(2,288.0)		1,132.7	4,585.6
Attributable to:
Owners of the Company	(2,568.2)	4,152.7	(2,289.8)		1,130.8	4,578.2
Non-controlling interests	5.0		5.2			1.8		1.9		7.4
Total comprehensive income for the period		(2,563.2)		4,157.9			(2,288.0)		1,132.7		4,585.6

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

5

ZIM INTEGRATED SHIPPING SERVICES LTD.

CONDENSED CONSOLIDATED UNAUDITED INTERIM STATEMENTS OF CHANGES IN EQUITY

						Attribute to the owners of the Company
			Share			General			Translation			Retained						Non-controlling				Total
			capital			reserves (*)			reserve			earnings			Total			interests				equity
												US $ in millions
For the nine months period ended September 30, 2023
Balance at December 31, 2022	925.9	1,097.3	(35.5)	3,901.9	5,889.6	6.3	5,895.9
Loss for the period										(2,547.2)	(2,547.2)	5.9	(2,541.3)
Other comprehensive income for the period, net of tax				(16.3)	(6.1)	1.4	(21.0)	(0.9)	(21.9)
Share-based compensation				15.4							15.4				15.4
Exercise of options	0.5	(0.5)
Dividend to owners of the Company										(769.2)	(769.2)				(769.2)
Dividend to non-controlling interests in subsidiaries																(7.5)	(7.5)
Balance at September 30, 2023
926.4	1,095.9	(41.6)	586.9	2,567.6	3.8	2,571.4
For the three months period ended September 30, 2023
Balance at June 30, 2023	926.3	1,109.1	(40.6)	2,858.3	4,853.1	2.0	4,855.1
Loss for the period										(2,272.6)	(2,272.6)	2.1	(2,270.5)
Other comprehensive income for the period, net of tax				(17.4)	(1.0)	1.2	(17.2)	(0.3)	(17.5)
Share-based compensation				4.3							4.3				)
												4.3
Exercise of options	0.1	(0.1)
Balance at September 30, 2023			926.4			1,095.9			(41.6)			586.9			2,567.6			3.8				2,571.4

1. Include reserves related to transactions with an interested party, share-based compensation and changes in fair value of investment instruments. The accompanying Notes are an integral part of these condensed consolidated unaudited interim Financial Statements.

6

ZIM INTEGRATED SHIPPING SERVICES LTD.

CONDENSED CONSOLIDATED UNAUDITED INTERIM STATEMENTS OF CHANGES IN EQUITY

						Attribute to the owners of the Company
			Share			General			Translation			Retained						Non-controlling			Total
			capital			reserves (*)			reserve			earnings			Total			interests			equity
For the nine months period ended September 30, 2022												US $ in millions
Balance at December 31, 2021	923.2	1,107.9	(19.7)	2,580.6	4,592.0	7.5	4,599.5
Initial application of an amendment to IAS 37										(3.3)	(3.3)				(3.3)
Balance at January 1, 2022	923.2	1,107.9	(19.7)	2,577.3	4,588.7	7.5	4,596.2
Profit for the period										4,205.2	4,205.2	7.3	4,212.5
Other comprehensive income for the period, net of tax							(19.5)	(33.0)	(52.5)	(2.1)	(54.6)
Share-based compensation				18.0							18.0				18.0
Exercise of options	2.2	(2.2)
Dividend to owners of the Company										(2,948.9)	(2,948.9)				(2,948.9)
Dividend to non-controlling interests in subsidiaries																(5.9)	(5.9)
Balance September 30, 2022
925.4	1,123.7	(39.2)	3,800.6	5,810.5	6.8	5,817.3
For the three months period ended September 30, 2022
Balance at June 30, 2022	925.4	1,115.7	(30.5)	3,231.4	5,242.0	6.2	5,248.2
Profit for the period										1,163.3	1,163.3	2.4	1,165.7
Other comprehensive income for the period, net of tax							(8.7)	(23.8)	(32.5)	(0.5)	(33.0)
Share-based compensation				8.0							8.0				8.0
Dividend to owners of the Company										(570.3)	(570.3)				(570.3)
Dividend to non-controlling interests in subsidiaries																(1.3)	(1.3)
Balance at September 30, 2022			925.4			1,123.7			(39.2)			3,800.6			5,810.5			6.8			5,817.3
For the year ended December 31, 2022	923.2	1,107.9	(19.7)	2,580.6	4,592.0	7.5	4,599.5
Balance at December 31, 2021
Initial application of amendment to IAS 37										(3.3)	(3.3)				(3.3)
Balance at January 1, 2022	923.2	1,107.9	(19.7)	2,577.3	4,588.7	7.5	4,596.2
Profit for the year										4,619.4	4,619.4	9.6	4,629.0
Other comprehensive income for the year, net of tax				(33.9)	(15.8)	8.5	(41.2)	(2.2)	(43.4)
Exercise of options	2.7	(2.7)
Share-based compensation				25.8							25.8				25.8
Dividend to owners of the Company										(3,303.3)	(3,303.3)				(3,303.3)
Acquisition of subsidiary with non-controlling interest				0.2							0.2	(0.2)
Dividend to non-controlling interests in subsidiaries																(8.4)	(8.4)
Balance at December 31, 2022
925.9	1,097.3	(35.5)	3,901.9	5,889.6	6.3	5,895.9

1. Include reserves related to transactions with an interested party, share-based compensation and changes in fair value of investment instruments. The accompanying Notes are an integral part of these condensed consolidated unaudited interim Financial Statements.

7

ZIM INTEGRATED SHIPPING SERVICES LTD.

CONDENSED CONSOLIDATED UNAUDITED INTERIM STATEMENTS OF CASH FLOWS

		Nine months ended		Three months ended				Year ended
		September 30		September 30				December
												31
		2023	2022	2023			2022	2022
					US $ in millions
Cash flows from operating activities
Profit (loss) for the period	(2,541.3)	4,212.5	(2,270.5)			1,165.7	4,629.0
Adjustments for:
Depreciation and amortization	1,232.5	1,007.7	423.8			380.2	1,396.3
Impairment loss	2,063.4			2,063.4
Net finance expenses	221.0	81.7	65.9			29.9	108.5
Share of profits (losses) and change in fair value of	4.5	(5.0)	2.3			(1.3)	(2.1)
investees
Capital loss (gain), net	3.2	(35.5)	(4.2)			(19.7)	(42.7)
Income taxes	(137.1)	1,256.9	(71.1)			348.7	1,398.3
Other non-cash items	14.2		18.0		4.5			8.0			39.7
		860.4	6,536.3	214.1			1,911.5	7,527.0
Change in inventories	34.3	(106.7)	17.7			(9.5)	(71.7)
Change in trade and other receivables	237.5	211.0	60.6			272.8	496.6
Change in trade and other payables, including contract
liabilities	(76.7)	(162.9)	19.2			(193.8)	(325.7)
Change in provisions and employee benefits	7.0		15.9		4.1			18.1			15.9
		202.1	(42.7)	101.6			87.6	115.1
Dividends received	1.7	0.1	0.2			0.1	0.9
Interest received	113.0	23.6	25.0			16.2	53.2
Income taxes paid	(319.4)	(1,475.8)	(3.3)			(343.8)	(1,586.1)
Net cash generated from operating activities	857.8	5,041.5	337.6			1,671.6	6,110.1
Cash flows from investing activities
Proceeds from sale of tangible assets, intangible assets,
and interest in investees	21.4	33.1	3.7			16.2	48.1
Acquisition and capitalized expenditures of tangible assets,
intangible assets and interest in investees	(75.2)	(317.7)	(13.7)			(54.6)	(345.5)
Acquisition of investment instruments, net	(609.6)	(1,281.5)	(26.2)			(765.6)	(1,433.1)
Loans granted to investees	(3.8)			(2.1)
Change in other receivables	(4.7)	(10.6)	9.3			(8.0)	(20.2)
Change in other investments (mainly deposits), net	2,002.6		367.1		19.9			556.2			105.7
Net cash generated from (used in) investing activities		1,330.7		(1,209.6)		(9.1)			(255.8)			(1,645.0)

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

8

ZIM INTEGRATED SHIPPING SERVICES LTD.

CONDENSED CONSOLIDATED UNAUDITED INTERIM STATEMENTS OF CASH FLOWS

		Nine months ended		Three months ended		Year ended
		September 30		September 30		December 31
		2023	2022	2023			2022	2022
					US $ in millions
Cash flows from financing activities
Receipt of long-term loans and other
long-term liabilities		59.2						59.2
Repayment of lease liabilities and borrowings	(1,214.1)	(965.8)	(352.7)			(433.3)	(1,449.4)
Change in short term loans	(21.0)	(53.5)						(53.5)
Dividend paid to non-controlling interests	(7.5)	(5.9)					(1.3)	(8.4)
Dividend paid to owners of the Company	(769.2)	(2,948.9)					(570.3)	(3,303.3)
Interest paid	(281.5)		(156.8)		(98.8)			(62.1)		(221.0)
Net cash used in financing activities	(2,293.3)		(4,071.7)		(451.5)			(1,067.0)		(4,976.4)
Net change in cash and cash equivalents	(104.8)	(239.8)	(123.0)			348.8	(511.3)
Cash and cash equivalents at beginning of the period	1,022.1	1,543.3	1,040.3			946.8	1,543.3
Effect of exchange rate fluctuation on cash held	(5.2)		(17.8)		(5.2)			(9.9)		(9.9)
Cash and cash equivalents at the end of the period		912.1		1,285.7		912.1			1,285.7		1,022.1

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

9

ZIM INTEGRATED SHIPPING SERVICES LTD.

NOTES TO THE CONDENSED CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS

• 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 cargo 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.

• Basis of compliance
• 1. Statement of compliance
     These condensed consolidated unaudited interim 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, 2022 (hereafter - the "annual Financial Statements"). These condensed consolidated unaudited interim Financial Statements were approved by the Board of Directors on November 15, 2023.
  2. 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.

• 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.

10