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 the ZIM Integrated Shipping Services Ltd. third quarter 2025 financial results conference call. All lines have been placed on mute to prevent any background noise. After the speakers' 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 1 again. Thank you. I would now like to turn the conference over to Elana Holzman. You may begin.

Thank you, operator, and welcome to ZIM Integrated Shipping Services Ltd.'s third quarter 2025 Financial Results Conference Call. Joining me on the call today are Eli Glickman, ZIM's President and CEO, and Xavier Destriau, ZIM's CFO. Before we begin, I would like to remind you 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 actual 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 20-F filed with the SEC on March 12, 2025. 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?

Thank you, Elana, and welcome, everyone. Thank you for joining us today. Q3 2025 unfolded against a backdrop of continued uncertainty driven by geopolitical and trade tensions. While the shipping industry has always been characterized by volatility, we are now experiencing events and changes with greater frequency and intensity than in the past, amplifying the challenges and requiring us to be even more agile than ever. Despite these headwinds, our team has navigated a volatile rate environment with resilience, maintaining service reliability, optimizing our cost base, and delivering solid Q3 results. Slide number four. Consistent with our expectation, we generated revenue of $1.8 billion and net income of $123 million. Q3 adjusted EBITDA was $593 million, and adjusted EBIT was $260 million. We suggested an EBITDA margin of 33% and an adjusted EBIT margin of 15%. We maintain total liquidity of $3 billion at September 30. Slide number five. ZIM's board of directors continued to prioritize returning capital to shareholders and as a dividend policy in 2021 and 2022 aiming to reward long-term shareholders. Additionally, when financial results have exceeded expectations, the board has promoted the special dividend distribution to further reward shareholders. Accordingly, under this policy, the board of directors declared a dividend of 31¢ per share or a total of approximately $37 million, representing 30% of third-quarter net income. Throughout 2025, ZIM distributed a total dividend of $9.09 per share, including the dividend declared today, or a total of approximately $1.1 billion. Since the IPO, we distributed a total of approximately $5.7 billion as dividends of $47.54 per share, including the dividend declared today. Turning to our guidance, the fourth quarter is trending weaker than originally projected when we provided guidance in August. However, despite the considerable uncertainty, our nine-month results have enabled us to refine our full-year…

Thank you, Eli. And again, on my behalf, welcome to everyone. On Slide seven, we present our key financial and operational highlights. We delivered solid profitability in Q3 despite a volatile operating environment. Third-quarter revenues were $1.8 billion, down 36% compared to last year, reflecting both lower freight rates and lower volume. Total revenues in the first nine months of 2025 of $5.4 billion were down $840 million, or 13% year over year. The average freight rate per TEU in the third quarter was $1,602 compared to $2,480 per TEU in the third quarter of last year. Q3 carried volume of 900,000 TEUs was 4.5% lower year over year, mostly due to lower volume in Crossways and Atlantic, but 3.5% higher sequentially. Revenues from non-containerized cargo, which reflects mostly our car carrier services, totaled $78 million for the quarter. That is compared to $145 million in 2024, attributable to both lower volume as we operated two fewer vessels in the current quarter, as well as lower rates. Our free cash flow in the third quarter totaled $574 million compared to $1.5 billion in 2024. Turning to the balance sheet, total debt decreased by $369 million since the prior year-end. As previously noted, total debt is expected to continue to trend down as repayment of lease liabilities exceeds lease additions and extensions until we start receiving new build charter capacity in 2026. Next, the following slide provides an overview of our fleet. Eli covered key aspects of our fleet strategy, but I would like to add a few more data points that we believe are important to consider. ZIM currently operates 115 container ships with a total capacity of 709,000 TEUs. This reflects a decrease of approximately 80,000 TEUs lower than our peak after having received all 46 newbuild vessels in…

At this time, I would like to remind everyone, in order to ask a question, press star then the number one on your telephone keypad. Your first question comes from the line of Omar Mostafa Nokta with Jefferies. Your line is open.

Hi, Eli and Xavier. Really good commentary. Lots, I think, to discuss. I have a few questions, but you know, just maybe first off, on ZIM and maybe just the broader governance side of things. Can you give a comment on, obviously, the market chatter regarding a management buyout? Is that something still being explored? And related to that, how should we be thinking about the changes to the board composition you disclosed yesterday? I recognize a lot of this is sensitive, but is there anything you can share?

Hi, Omar. First, the board is managing the process of board member changes. Two of the board members decided to resign, and as such, the board has chosen two new highly professional board members that meet the requirements, and we have a full scale of eight board members in the company. What was the next question? What is the next question, please?

Yeah. Just in terms of, I guess, the broader management buyout potential. If that's something that's still being explored.

For this, we have no comment. Going to be a comment for sure. The board will decide when, how, and no comment for discussion.

Understood. Thank you. And then just wanted to ask about the Red Sea. You made some very interesting comments on that. And wanted to ask in terms of how you're viewing the return. I know you're in the early planning stages in the process of that. I guess for ZIM, you know, the Asia-Europe routes had not been really a major focus. Do you see this shifting as a Red Sea return or at least what you're evaluating? Is this an opportunity for you to grab market share and build a presence that you haven't had before in that leg?

The answer is yes. We are actually waiting for the insurance company to approve our return into the Red Sea. So it's. And we're looking forward to going for shorter trade than the Cape of Good Hope as fast as we can.

Okay. Thank you. And then just a final one, and I'll pass it over. Xavier, you were kind of highlighting the shifts you've returned this year. We can see the cost coming down as a result of that. Are you able to give any quantification or some expectations on, say, 2026, how you think costs would look relative to what they've averaged this year?

Look, I think from a vessel or fleet profile perspective, depending, of course, as to what 2026 will look like from a rate dynamic perspective, but maybe there are risks in this respect. It is likely that we will return and continue to return vessels that are coming up for renewal and focusing on, at the end of the day, continuing to operate the larger ships, the more efficient tonnage, the newer and greener capacity that we have received over the course of the past couple of years. So today, I think 2025 was clearly a downward trend in terms of operated tonnage. We started the year at around 780,000 TEUs. We say that today, we are 710,000 TEUs, and we need to acknowledge that the charter market is still to date elevated, so it's expensive to reach out to tonnage. At a time when the revenue per TEU carried is under pressure. I think for as long as this situation continues, it is more likely than not that we will redeliver the vessels that come up for renewal as opposed to trying to recharter them.

Got it. Okay. Thank you, Xavier, and thank you, Eli. I'll turn it over.

Your next question comes from the line of Marco Limite with Barclays. Your line is open.

Hello. Thank you very much for taking my question. My first question is on the dividend. So implied Q4 for your guidance implies that the income in Q4 will be negative. And given the outlook you're providing, probably we're going to have negative income for a few quarters at least. So can you just remind us what is your dividend policy? So as long as the net income date is negative on a quarterly basis, does that mean that you won't pay dividends? So this is, let's say, maybe the last CV for a while? Second question, so on this Red Sea reopening, you've been very helpful in giving your view. But if you want to dig out a little bit more in how much visibility you have got on timing over there at sea, have you got any strong conviction or visibility? I don't know. Have you been discussing with authorities? Or other companies? So, yeah, what is the kind of visibility you have got there? And the third question is a bit more technical. You haven't changed the upper end of the EBITDA guidance, but you have reduced the upper end of the EBIT guidance. What's that? And so sorry to stick another one, but when we think about 2025, clearly, there have been issues with the US ports and the Asian ports, China ports in Q4 probably, so is the China port fee included in your Q4 guidance? And are you able to estimate how much have you got in terms of one-off this year that are now recurring next year from all the issues with the US and Chinese ports? Thank you.

I will begin with the first two questions and then we'll go. Since the IPO, we have distributed about $5.7 billion in dividends. The last two years, more than $1 billion. And this is about and more than 25 times the amount we raised in the IPO in January 2021. ZIM's dividend policy is to distribute 30% per quarter from the net profit and once a year, in the end of the year, this coming March, with a catch-up up to 50% of the net profit of the year. As for your next question, about the next quarter, we haven't published results yet. But hopefully, this quarter will be profitable as well. So we have the policy. And I just want to mention here that the board has the ability to decide on a special dividend as we did two times two special dividends. First one, on September 2021, $2 per share. And then again, December 2024. So the board has the authority on top of the policy to decide on a special dividend. And this is its authority. I cannot speak for the board. I believe in the end of the next quarter, the board will take a decision. Or anytime, it can decide to take a decision on a special dividend. As for the Red Sea, we are according to the announcement of the Houthis and the Egyptian authorities, as I said before, Omar Mostafa Nokta, willing to go as fast as we can to change the direction of vessels to go through Bab el-Mandeb and the Suez Canal. According to our policy and according to our responsibility, first, we have to have approval by the shipowner and insurance company. And this is what we are going to do. Bottom line, as soon as we can, we'll go through the Suez Canal.

Right. And I will take maybe the last two questions, Marco. If you allow me. So you're correct in terms of EBIT guidance. The original guidance range suggested a $1.25 billion difference between the two metrics, EBITDA and EBIT. So $1.25 billion of depreciation and amortization. And it was there's a little bit of rounding going on here. Now we say 1.3. It was obviously not exactly 1.25 to start with. It was a little bit more than that. Now we are tinting towards the rounding of 1.3 billion. A few things explain it. First, the two vessels that we acquired in the course of 2025 have some effect on the amortization in the tail of the year, in the second half of the year. Also, some equipment and we have taken the opportunity of maybe the equipment in terms of boxes, containers, are cheap to acquire today, and it's a good opportunity to continue to renew our fleet and maintain a very efficient fleet of equipment and let go of the older boxes. And there is also on top of that a bit of IT cost that got capitalized and finds its way in terms of depreciation towards the end. That's the reason. A mix of quite a few small things that add up to rounding to the 1.3 as opposed to 1.25. With respect to the last part of your questions, now that we are in a situation, and we've been in a situation since the announcement from both the US administration and the Chinese Ministry of Transport, there is no such thing as an extra levy that we are subject to in any jurisdiction when we call in the US or in China.

I would like also to take the opportunity because of the question about the dividend. I want to emphasize to the best of my knowledge, didn't check it solely. So there's no company in history that returned in two years more than 20 times the amount that we raised in the IPO in January 2021. And by today, more than 25 times the amount that we raised, $204 million net dollars in the IPO. So in this, we made history. Maybe it's our company who raised more money. But there are no other companies that return such high or distribute such high dividends in such a short time. Please, next question.

Your next question comes from the line of Alexia Dogani with JPMorgan. Your line is open.

Yes. Good afternoon. Thank you for taking my questions. Just firstly, on cost savings. In the previous downturn, you looked at kind of resizing the network, taking kind of some more efficiency measures. Is this something that you are currently considering? And what could be the potential scope? And secondly, can you give us an update on your CapEx commitments in terms of cash, but also new lease inceptions? And based on your comment that you are not looking to renew charters or are expiring, how much of the asset base do you expect will kind of roll off in the next twelve to eighteen months? And then finally, are there any financial leverage parameters that your team works towards even if there's a potential downturn, mindful that most of your debt is kind of lease debt or kind of charter debt? Thank you.

Thank you, Alexia. I'll try to take your questions in the orders that you raised them. First, you were asking about the cost savings and resizing potentially the network. Clearly, the company is always looking at trying to respond with agility to the changing market conditions. What I think is very important again, to reemphasize, and I think that links with your third question, is that the vessels that we are committed to in terms of a long-term charter are the most efficient ones today that we operate. And so we will keep those ones and those the ones that potentially we will let go again depending on what the markets look like. We'll de facto be the ones that are less efficient, older, you know, not LNG-powered, and more expensive. So I think this is very important when we think about the capacity that we end up operating. The efficient tonnage is with us for the longer term. And in terms of percentage, we need to link again with your third question, how much does it mean in terms of asset base or right of use asset? As you indeed rightly said. When we look I don't have the exact number, but maybe to assist here in trying to get the picture. We, in terms of total capacity today, out of the 710,000 TEU that we operate. You know, 70% of that capacity, even maybe closer to 75%, of that capacity is either long-term charter or owned. Leaving 25% of the amount of our right of use asset give or take on our balance sheet. Being the one capacity that can be returned. In terms of next year, 2026, this is we have, again, two hundred ninety thousand TEUs of capacity that is chartered on what we define as short-term charter out of which I think we said we have something like 80,000 TEUs that could be redelivered in 2026. So that's the way, I mean, I think to look at the math and come up with the best assessment of the asset base that could be redelivered. With respect to your second question, so we had not ended up taking them in the order as you raised them. The second question on the cash CapEx, we don't have much commitment in this respect. Very much because we are chartering as opposed to anything else. So very limited. The cash CapEx that we have is more related to sometimes equipment, but we've been as I just mentioned in the prior comment, we've been very active in already renewing our fleet of containers. So there is limited need especially if we do not grow our fleet in the coming years. I think we are set in this respect with regards to our fleet of equipment, by the way, including the reefers that we operate. So very limited cash CapEx. It's always high and maybe there will always be some from an equipment perspective, but limited in the years to come.

And if you allow me to ask a follow-up question on the point about chartered vessels versus owned. You hopefully put the chart around oversupply in the deck. We've clearly noticed that in the past four to five years, a lot of operators have increased the shared part sorry. The part of ownership of their vessels compared to charters. How does that kind of impact you think competitive dynamics and discipline in the market? Does it make it easier for people to take capacity out or harder? Thank you.

I think it depends on the capacity, and there is not, I think, one straight answer to that question because then I think we need to deep dive into the vessel segment. So whether we're talking about the large capacity vessel or the smaller one. And then also with respect to their age, and finally with respect to their environmental footprint. As well. So but by and large, I think what we are seeing and what has been, I think, very much motivating the company to shift its strategy, you know, after the IPO of the 12/21, 2022, the COVID era days. Is that, we felt that we could no longer rely on the, you know, short-term charter market to source the vessels that we needed. And, hence, we had to go seek that capacity for ourselves. And, we went through the avenue of partnering with vessel owners to go to shipyards, order the ships that were the ones that we needed, and agree with those vessel owners on a financing solution. At the end of the day, that's one way of looking at it. And I think nowadays, when we look at the order book, for the new tonnage that is on order, it is very much carrier orders that we can see, or if it is not carriers and non-vessel operators, there is very often already at the time of placing the order a charter attached. So a pre-agreement between that vessel non-vessel operator and the potential lessee that will take those vessels on charter. So we feel that we did operate the transition timely. In 2021-2022, got the vessels in 2023-2024, and now we feel much more confident in our ability to continue to operate the right tonnage in the years to come, having less dependency on the short-term charter market.

Thank you. Appreciate it.

Your next question comes from the line of Chloe Xu with Citi. Your line is open.

Hi. Thank you for taking my questions. My first question is on the route diversification. You have mentioned that you're adding to the Southeast Asia and LatAm markets. And I just wanted to ask, in the current rate environment, which looks like sub-breakeven overall, which route is more profitable for you at the moment and which is less profitable? And how quickly can you adjust those capacities as you see opportunities appear? And my second question is that obviously, you mentioned that you anticipate rates pressure in Q4 and 2026. As we know that the new capacities are coming in the next five years, where do you see that the rates will recover? And what do you think will be that pivoting moment in your perspective? Thank you.

Thank you. The diversification that you are referring to, and it's true that we've been, historically, and we continue to be very exposed to the transpacific trade. We are no stranger to the trend that was initiated between the two countries, China and the US, and we have taken actions already over the past years to increase our footprint in Southeast Asia to capture the cargo that is moving from China to the neighboring country in Southeast Asia. And whether those find their way in terms of countries of destination, to the US or elsewhere. And you're right in saying that also outside of this pure Southeast Asia market, we do see and believe that there is a growth opportunity on the Latin America trade. Now which one are the most profitable trade? You know, this is a very question that depends on when we ask the question. The volatility of our environment and trade by trade, the dynamic may differ as well. You know, we see positive signs in one trade in a given week or given period, maybe a couple of weeks, and then we see something else happening and the trend changing. So it is really much a moving environment, and I don't think we can look at it that way. I think it is also important for us to when we build the position in a trade where we may we were maybe not such a significant player in the past. We need to do it gradually. We need also to make sure that when we come and open a service we guarantee to our customers the reliability that they need. So, we need to provide a service that is reliable. Sometimes it means investing a little bit, irrespective of what the market dynamic does. In…

Thank you. This concludes our Q&A session today. I will now turn the call back over to Eli Glickman for closing remarks.

Slide number 17. To conclude, despite continuing uncertainty in the market, our solid Q3 results reflect the agile nature of our commercial strategy, as well as the advantages of our modern upscale fleet of cost-efficient vessels. We remain disciplined and proactive, navigating headwinds with resilience and maintaining service reliability for customers while optimizing our cost base. We continue to share our success with investors and declare a dividend of $0.31 per share for a total of $37 million, consistent with our dividend policy and capital allocation priorities. Looking ahead, the first quarter is trending weaker than originally projected. However, based on our strong performance year to date, we've increased the midpoints of our 2025 guidance ranges. Overall, we are confident even against the backdrop of a highly volatile rate environment. That our differentiated strategy and enhanced industry position will drive sustainable growth over the long term. I would like to thank ZIM employees around the globe for their professionalism and dedication, as well as our customers and shareholders for their continuous trust and support. We look forward to sharing our continued progress with you all. Thank you very much.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.