Stock Zim It fell 14.7% on Wednesday in a higher-than-normal trading volume, and at the end of the trading day the share price reached about $ 58.5. The stock is now down another 8% and the market value of the maritime transport company has shrunk to about $ 6.4 billion after falling by 22% in two days.
Other stocks in the shipping sector also experienced steep declines yesterday and today, amid fears that a global economic slowdown, and perhaps even stagnation, will lead to a decline in demand for maritime transport.
Even after the recent decline, this is a return of more than 200% compared to the initial public offering made by ZIM in New York in January 2021, thanks to the significant increase in demand for sea transport during the corona period (which led to a sharp increase in revenue and ZIM profits).
The OECD this week cut its global growth forecast for the coming year to 3%, down from the previous forecast published last December and was 4.5%. The reasons for this are the invasion of Ukraine as well as the closure of major cities and ports in China due to corona restrictions, factors that have led to new shocks to the world economy. The lowering of the OECD growth forecast came after the World Bank also lowered its growth forecast from 3.2% to 2.9% and estimated that many countries would find it difficult to avoid a recession. The World Bank noted that the world economy is facing high inflation and even if the recession is avoided, stagflation could continue for several years.
The big retailers are “stuck” with excess inventory
Moreover, the American retailer Trgt It warned this week that its profits would be hurt in the near term in light of its intention to “get rid” of inventory it has accumulated recently. In general, American retailers have amassed many inventories of products that were popular during the epidemic and are now sold less. CNBC reported this week that in American Eagle and Abercrombie & Fitch, inventories rose about 45% over the same quarter last year, a combination of unsold products and delays in the supply chain.
It is not inconceivable that large companies wishing to reduce existing inventories will be less equipped with new products, at least in some categories, which may weigh on the results of maritime transport companies. However, with the publication of first quarter reports, ZIM emphasized that they have long-term contracts with strategic customers, which have recently entered into force and whose prices are twice as high as 2021 prices.
Zim is managed by Eli GlickmanAnd among the prominent shareholders in which a company is located canon Of the Ofer era. The company has enjoyed unprecedented booms in its business over the past year and a half, due to difficulties in the global supply chain since the outbreak of the Korna crisis, which have led to record demand and a sharp rise in sea freight prices. Zim, which became the most profitable company in Israel, recently showed a threefold jump in quarterly net profit, which climbed from $ 590 million in the first quarter last year to $ 1.7 billion in the first quarter of 2022 (similar to the profit it presented in the previous quarter, fourth of 2021).
The company, which posted revenue of $ 3.7 billion in the quarter, led 859,000 containers, an increase of 5% from the same quarter last year, with the average price per container doubling to $ 3,848. With the release of the reports a few weeks ago, Glickman told Globes that “like everyone else, we are monitoring inflationary expectations in the world and preparing ourselves for uncertainty. We do not need to raise funds and therefore have no impact on rising interest rates.”
$ 100,000 per board member
Meanwhile, Zim announced over the weekend a summons to its shareholders’ annual meeting, in which it provided data on the rewards to its top executives in 2021. Last year, Eli Glickman, the company’s president and CEO, received $ 9.9 million in rewards, most of which – $ 7.3 million – as a capital reward allocated to him. His annual base salary was $ 872,000 and he also received a $ 1.5 million bonus and other benefits worth $ 238,000. Another four senior executives at the company received rewards at a cost of $ 2-2.8 million, with all of them having a capital component of about $ 1 million.
At the shareholders’ meeting to be held on July 21, the shareholders will be asked to approve an additional term for the current nine directors of the company (including Chairman Yair Seroussi) and to approve the expansion of the board to 11 members. $ 2,000 and a payment of $ 2,000 per meeting. Chairman Seroussi, assuming he is re-elected, will receive a monthly salary of NIS 150,000.