ZIM Integrated Shipping stock price: the plot thickens

ZIM Integrated (NYSE: ZIM) stock price has crashed hard after the company canceled its dividend as the shipping industry recoils. The shares plunged to a low of $12.95, the lowest level since January 26th. Its stock has retreated by more than 37% from the highest level this month. In all, the shares have dropped by almost 70% from 2022 highs.

Dividend is now gone

ZIM Integrated, one of the biggest companies in the shipping industry, made headlines after it delivered weak earnings. In a statement, the company said that its revenue in the first quarter to $1.4 billion from the previous $3.7 billion. The average cost of container plunged by 64% to $1,390.

At the same time, the free cash flow came in at $142 million from the previous $1.5 billion. Its total debt jumped by $307 million while the number of containers carried fell to 769k during the quarter. As I wrote in this article, ZIM Integrated Shipping reported a big loss, pushing it to cancel its dividend. It said:

“Given the net loss we recorded this quarter, per our dividend policy to distribute 30% to 50% of our annual net income in quarterly installments, we are not distributing a dividend this quarter.”

ZIM Integrated is in trouble as demand for shipping slips, pushing prices sharply lower. The most recent data shows that the Freightos Baltic Index has plunged to the lowest level since 2021. It has dropped to about $1,400 from the pandemic high of over $10,000.

ZIM Integrated is going through a tough period as natural gas prices sink and as global demand eases. Natural gas price has crashed to the lowest level since December 2020. This is important since ZIM makes money in transporting liquified natural gas (LNG).

Meanwhile, there are signs that the global economy is not recovering as fast as what analysts were expecting. China’s industrial production grew at a slower pace than expected while industrial production dropped by 18% in April.

ZIM Integrated Shipping stock price analysis

The daily chart shows that ZIM stock price has been in a strong bearish trend in the past few days. It has dropped from a high of $22 to $13.75. The stock has crashed below the 25-day and 50-day exponential moving averages (EMA).

Further, the MACD and the Relative Strength Index (RSI) have continued falling. Therefore, the shares will likely continue falling as sellers target the next key support level at $11. A move below this price will see it drop below $10.