EX-99.1 3 exhibit_99-2.htm EXHIBIT 99.2
Exhibit 99.2


ZIM INTEGRATED SHIPPING SERVICES LTD.

CONDENSED CONSOLIDATED UNAUDITED INTERIM

FINANCIAL STATEMENTS

JUNE 30, 2022

 
ZIM INTEGRATED SHIPPING SERVICES LTD.
 
INDEX TO CONDENSED CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS

 
Page

   
FINANCIAL STATEMENTS:
  
   
3
   
4
   
5
   
6-7
   
8-9
   
10-17

2
 
ZIM INTEGRATED SHIPPING SERVICES LTD.
 
CONDENSED CONSOLIDATED UNAUDITED INTERIM STATEMENTS OF FINANCIAL POSITION

         
June 30
    
December 31
  
         
2022
    
2021
    
2021
  
   
Note
    
US $ in millions
  
Assets
                        
Vessels  
    
6
      
4,405.3
      
1,768.3
      
2,957.8
  
Containers and handling equipment
    
6
      
1,281.4
      
1,019.3
      
1,365.8
  
Other tangible assets
    
6
      
77.7
      
67.0
      
68.9
  
Intangible assets
            
79.4
      
67.4
      
73.8
  
Investments in associates
            
17.8
      
12.4
      
12.2
  
Other investments
            
651.0
      
5.4
      
169.2
  
Trade and other receivables
            
109.5
      
6.1
      
107.2
  
Deferred tax assets
            
2.3
      
1.5
      
2.1
  
Total non-current assets
            
6,624.4
      
2,947.4
      
4,757.0
  
                                 
Inventories
            
216.2
      
99.7
      
119.0
  
Trade and other receivables
            
1,346.2
      
963.3
      
1,278.0
  
Other investments
            
2,358.9
      
46.8
      
2,144.5
  
Cash and cash equivalents
            
946.8
      
1,545.3
      
1,543.3
  
Total current assets
            
4,868.1
      
2,655.1
      
5,084.8
  
Total assets
            
11,492.5
      
5,602.5
      
9,841.8
  
                                 
Equity
                                
Share capital and reserves
    
5
      
2,010.6
      
1,992.9
      
2,011.4
  
Retained earnings (deficit)
            
3,231.4
      
(279.5
)
    
2,580.6
  
Equity attributable to owners of the Company
            
5,242.0
      
1,713.4
      
4,592.0
  
Non-controlling interests
            
6.2
      
5.0
      
7.5
  
Total equity
            
5,248.2
      
1,718.4
      
4,599.5
  
                                 
Liabilities
                                
Lease liabilities
            
2,929.0
      
1,427.8
      
2,178.7
  
Loans and other liabilities
            
164.8
      
130.0
      
120.8
  
Employee benefits
            
50.0
      
64.1
      
65.6
  
Deferred tax liabilities
            
133.8
      
42.5
      
120.6
  
Total non-current liabilities
            
3,277.6
      
1,664.4
      
2,485.7
  
                                 
Trade and other payables
            
901.3
      
944.8
      
1,086.3
  
Provisions
            
30.8
      
28.2
      
28.3
  
Contract liabilities
            
577.5
      
453.0
      
618.3
  
Lease liabilities
            
1,377.2
      
658.4
      
893.0
  
Loans and other liabilities
            
79.9
      
135.3
      
130.7
  
Total current liabilities
            
2,966.7
      
2,219.7
      
2,756.6
  
Total liabilities
            
6,244.3
      
3,884.1
      
5,242.3
  
Total equity and liabilities
            
11,492.5
      
5,602.5
      
9,841.8
  

 /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: August 17, 2022.

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

         
Six months ended
June 30
    
Three months ended
June 30
    
Year ended
December 31
  
         
2022
    
2021
    
2022
    
2021
    
2021
  
   
Note
    
US $ in millions
  
                                     
Income from voyages and related services
          
7,145.2
      
4,126.3
      
3,428.8
      
2,382.0
      
10,728.7
  
Cost of voyages and related services
                                              
Operating expenses and cost of services
    
8
      
(2,380.6
)
    
(1,869.5
)
    
(1,262.3
)
    
(988.9
)
    
(3,905.9
)
Depreciation
            
(616.0
)
    
(298.7
)
    
(331.6
)
    
(170.6
)
    
(756.3
)
Gross profit
            
4,148.6
      
1,958.1
      
1,834.9
      
1,222.5
      
6,066.5
  
                                                 
Other operating income
            
19.3
      
4.2
      
14.7
      
1.8
      
14.5
  
Other operating expenses
            
(0.2
)
    
(0.5
)
    
(0.1
)
    
(0.4
)
    
(1.0
)
General and administrative expenses
            
(162.0
)
    
(123.5
)
    
(84.9
)
    
(67.6
)
    
(267.7
)
Share of profit (loss) of associates
            
1.1
      
2.2
      
(0.3
)
    
0.7
      
4.0
  
                                                 
Results from operating activities
            
4,006.8
      
1,840.5
      
1,764.3
      
1,157.0
      
5,816.3
  
                                                 
Finance income
            
47.4
      
5.7
      
26.0
      
(1.1
)
    
18.8
  
Finance expenses
            
(99.2
)
    
(90.2
)
    
(53.9
)
    
(43.9
)
    
(175.6
)
                                                 
Net finance expenses
            
(51.8
)
    
(84.5
)
    
(27.9
)
    
(45.0
)
    
(156.8
)
                                                 
Profit before income taxes
            
3,955.0
      
1,756.0
      
1,736.4
      
1,112.0
      
5,659.5
  
                                                 
Income taxes
            
(908.2
)
    
(278.2
)
    
(400.6
)
    
(223.8
)
    
(1,010.4
)
                                                 
Profit for the period
            
3,046.8
      
1,477.8
      
1,335.8
      
888.2
      
4,649.1
  
                                                 
Attributable to:
                                                
                                                 
Owners of the Company
            
3,041.9
      
1,474.1
      
1,333.1
      
886.5
      
4,640.3
  
Non-controlling interests
            
4.9
      
3.7
      
2.7
      
1.7
      
8.8
  
Profit for the period
            
3,046.8
      
1,477.8
      
1,335.8
      
888.2
      
4,649.1
  
                                                 
Earnings per share (US$)
                                                
Basic earnings per 1 ordinary share
    
10
      
25.36
      
13.11
      
11.11
      
7.71
      
40.31
  
Diluted earnings per 1 ordinary share
    
10
      
25.26
      
12.56
      
11.07
      
7.38
      
39.02
  

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

   
Six months ended
June 30
    
Three months ended
June 30
    
Year ended December 31
  
   
2022
    
2021
    
2022
    
2021
    
2021
  
   
US $ in millions
  
                               
Profit for the period
    
3,046.8
      
1,477.8
      
1,335.8
      
888.2
      
4,649.1
  
                                         
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
    
(12.4
)
    
(3.4
)
    
(7.4
)
    
(0.1
)
    
(7.8
)
                                         
Net change in fair value of investments in debt instruments at fair value through other comprehensive income, net of tax
    
(12.1
)
            
(4.8
)
            
(0.7
)
                                         
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
    
(1.5
)
    
(0.1
)
    
(1.7
)
    
0.1
      
(0.2
)
                                         
Defined benefit pension plans actuarial gains, net of tax
    
4.4
              
0.5
              
1.1
  
                                         
Other comprehensive income for the period, net of tax
    
(21.6
)
    
(3.5
)
    
(13.4
)
            
(7.6
)
                                         
Total comprehensive income for the period
    
3,025.2
      
1,474.3
      
1,322.4
      
888.2
      
4,641.5
  
                                         
Attributable to:
                                        
Owners of the Company
    
3,021.9
      
1,471.8
      
1,320.4
      
886.6
      
4,636.8
  
Non-controlling interests
    
3.3
      
2.5
      
2.0
      
1.6
      
4.7
  
                                         
Total comprehensive income for the period
    
3,025.2
      
1,474.3
      
1,322.4
      
888.2
      
4,641.5
  

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
capital
    
General
reserves (**)
    
Translation
reserve
    
Retained
earnings
    
Total
    
Non-controlling
interests
    
Total
equity
  
 
   
US $ in millions
  
For the six months period ended June 30, 2022
                                          
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
                            
3,041.9
      
3,041.9
      
4.9
      
3,046.8
  
Other comprehensive income for the period, net of tax
                    
(10.8
)
    
(9.2
)
    
(20.0
)
    
(1.6
)
    
(21.6
)
Share-based compensation
            
10.0
                      
10.0
              
10.0
  
Exercise of options
    
2.2
      
(2.2
)
                                        
Dividend to owners of the Company
                            
(2,378.6
)
    
(2,378.6
)
            
(2,378.6
)
Dividend to non-controlling interests in subsidiaries
                                            
(4.6
)
    
(4.6
)
Balance at June 30, 2022
    
925.4
      
1,115.7
      
(30.5
)
    
3,231.4
      
5,242.0
      
6.2
      
5,248.2
  
                                                         
For the three months period ended June 30, 2022
                                                        
Balance at March 31, 2022
    
924.3
      
1,109.3
      
(23.8
)
    
2,246.1
      
4,255.9
      
4.3
      
4,260.2
  
Profit for the period
                            
1,333.1
      
1,333.1
      
2.7
      
1,335.8
  
Other comprehensive income for the period, net of tax
                    
(6.7
)
    
(6.0
)
    
(12.7
)
    
(0.7
)
    
(13.4
)
Share-based compensation
            
7.5
                      
7.5
              
7.5
  
Exercise of options
    
1.1
      
(1.1
)
                                        
Dividend to owners of the Company
                            
(341.8
)
    
(341.8
)
            
(341.8
)
Dividend to non-controlling interests in subsidiaries
                                            
(0.1
)
    
(0.1
)
Balance at June 30, 2022
    
925.4
      
1,115.7
      
(30.5
)
    
3,231.4
      
5,242.0
      
6.2
      
5,248.2
  

(*) See Note 3.
(**) Include reserves related to transactions with an interested party and share-based compensation.

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
capital
    
General
reserves (*)
    
Translation
reserve
    
Retained
earnings
(deficit)
    
Total
    
Non-controlling
interests
    
Total
equity
  
 
   
US $ in millions
  
For the six months period ended June 30, 2021
                                          
Balance at January 1, 2021
    
700.3
      
1,106.5
      
(16.0
)
    
(1,523.5
)
    
267.3
      
7.2
      
274.5
  
Profit for the period
                            
1,474.1
      
1,474.1
      
3.7
      
1,477.8
  
Other comprehensive income for the period, net of tax
                    
(2.2
)
    
(0.1
)
    
(2.3
)
    
(1.2
)
    
(3.5
)
Issuance of share capital, net of issuance costs
    
203.5
                              
203.5
              
203.5
  
Share-based compensation
            
0.8
                      
0.8
              
0.8
  
Dividend to owners of the Company
                            
(230.0
)
    
(230.0
)
            
(230.0
)
Dividend to non-controlling interests in subsidiaries
                                            
(4.7
)
    
(4.7
)
Balance at June 30, 2021
    
903.8
      
1,107.3
      
(18.2
)
    
(279.5
)
    
1,713.4
      
5.0
      
1,718.4
  
                                                         
For the three months period ended June 30, 2021
                                                        
Balance at March 31, 2021
    
903.8
      
1,106.8
      
(18.2
)
    
(936.1
)
    
1,056.3
      
3.8
      
1,060.1
  
Profit for the period
                            
886.5
      
886.5
      
1.7
      
888.2
  
Other comprehensive income for the period, net of tax
                            
0.1
      
0.1
      
(0.1
)
        
Share-based compensation
            
0.5
                      
0.5
              
0.5
  
Dividend to owners of the Company
                            
(230.0
)
    
(230.0
)
            
(230.0
)
Dividend to non-controlling interests in subsidiaries
                                            
(0.4
)
    
(0.4
)
Balance at June 30, 2021
    
903.8
      
1,107.3
      
(18.2
)
    
(279.5
)
    
1,713.4
      
5.0
      
1,718.4
  
                                                         
For the year ended December 31, 2021
                                                        
Balance at January 1, 2021
    
700.3
      
1,106.5
      
(16.0
)
    
(1,523.5
)
    
267.3
      
7.2
      
274.5
  
Profit for the year
                            
4,640.3
      
4,640.3
      
8.8
      
4,649.1
  
Other comprehensive income for the year, net of tax
                    
(3.7
)
    
0.2
      
(3.5
)
    
(4.1
)
    
(7.6
)
Issuance of share capital, net of issuance costs
    
203.5
                              
203.5
              
203.5
  
Share-based compensation
            
20.8
                      
20.8
              
20.8
  
Exercise of options
    
19.4
      
(19.4
)
                                        
Dividend to owners of the Company
                            
(536.4
)
    
(536.4
)
            
(536.4
)
Acquisition of subsidiary with non-controlling interest
                                            
0.3
      
0.3
  
Dividend to non-controlling interests in subsidiaries
                                            
(4.7
)
    
(4.7
)
Balance at December 31, 2021
    
923.2
      
1,107.9
      
(19.7
)
    
2,580.6
      
4,592.0
      
7.5
      
4,599.5
  

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

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

   
Six months ended
    
Three months ended
    
Year ended
  
   
June 30
    
June 30
    
December 31
  
   
2022
    
2021
    
2022
    
2021
    
2021
  
   
US $ in millions
  
                               
Cash flows from operating activities
                              
Profit for the period
    
3,046.8
      
1,477.8
      
1,335.8
      
888.2
      
4,649.1
  
                                         
Adjustments for:
                                        
Depreciation and amortization
    
627.5
      
309.7
      
337.3
      
176.1
      
779.2
  
Net finance expenses
    
51.8
      
84.5
      
27.9
      
45.0
      
156.8
  
Share of profits and change in fair value of investees
    
(3.7
)
    
(3.2
)
    
(2.2
)
    
(0.7
)
    
(4.7
)
Capital gain
    
(15.8
)
    
(1.1
)
    
(11.8
)
    
(0.7
)
    
(8.7
)
Income taxes
    
908.2
      
278.2
      
400.6
      
223.8
      
1,010.4
  
Other non-cash items
    
10.0
              
7.5
              
20.8
  
     
4,624.8
      
2,145.9
      
2,095.1
      
1,331.7
      
6,602.9
  
Change in inventories
    
(97.2
)
    
(47.5
)
    
(42.4
)
    
(13.4
)
    
(66.8
)
Change in trade and other receivables
    
(61.8
)
    
(434.1
)
    
34.5
      
(259.9
)
    
(766.5
)
Change in trade and other payables including
                                        
 contracts liabilities
    
30.9
      
300.3
      
(5.1
)
    
124.6
      
555.9
  
Change in provisions and employee benefits
    
(2.2
)
    
4.8
      
(0.1
)
    
5.5
      
6.6
  
     
(130.3
)
    
(176.5
)
    
(13.1
)
    
(143.2
)
    
(270.8
)
Dividends received from associates
            
1.9
              
1.2
      
4.4
  
Interest received
    
7.4
      
2.2
      
4.2
      
1.5
      
3.5
  
Income taxes paid
    
(1,132.0
)
    
(15.5
)
    
(376.3
)
    
(10.6
)
    
(369.1
)
                                         
Net cash generated from operating activities
    
3,369.9
      
1,958.0
      
1,709.9
      
1,180.6
      
5,970.9
  
                                         
Cash flows from investing activities
                                        
Proceeds from sale of tangible assets, intangible assets
                                        
   and interest in investees
    
16.9
      
2.3
      
11.6
      
1.8
      
10.9
  
Acquisition of tangible assets, intangible assets and interest
                                        
    in investees
    
(263.1
)
    
(464.5
)
    
(80.6
)
    
(331.5
)
    
(1,005.0
)
Acquisition of investment instruments, net
    
(515.9
)
            
(333.0
)
            
(182.5
)
Change in other receivables
    
(2.6
)
            
(2.3
)
            
(101.8
)
Change in other investments (mainly deposits), net
    
(189.1
)
    
14.3
      
(288.9
)
    
16.4
      
(2,064.7
)
Net cash used in investing activities
    
(953.8
)
    
(447.9
)
    
(693.2
)
    
(313.3
)
    
(3,343.1
)

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

   
Six months ended
    
Three months ended
    
Year ended
  
   
June 30
    
June 30
    
December 31
  
   
2022
    
2021
    
2022
    
2021
    
2021
  
   
US $ in millions
  
                               
Cash flows from financing activities
                              
Receipt of long-term loans and other
                              
   long-term liabilities
    
59.2
      
50.0
            
50.0
      
50.0
  
Issuance of share capital, net of issuance costs
            
205.4
                    
205.4
  
Repayment of lease liabilities and borrowings
    
(532.5
)
    
(692.4
)
    
(323.6
)
    
(502.0
)
    
(1,191.3
)
Change in short term loans
    
(53.5
)
    
(16.0
)
    
(33.5
)
    
(15.0
)
    
(16.0
)
Dividend paid to non-controlling interests
    
(4.6
)
    
(4.7
)
    
(0.1
)
    
(1.9
)
    
(4.7
)
Dividend paid to owners of the Company
    
(2,378.6
)
            
(2,378.6
)
            
(536.4
)
Interest and other financial expenses paid
    
(94.7
)
    
(77.3
)
    
(54.2
)
    
(42.5
)
    
(160.0
)
Net cash used in financing activities
    
(3,004.7
)
    
(535.0
)
    
(2,790.0
)
    
(511.4
)
    
(1,653.0
)
                                         
Net change in cash and cash equivalents
    
(588.6
)
    
975.1
      
(1,773.3
)
    
355.9
      
974.8
  
Cash and cash equivalents at beginning of the period
    
1,543.3
      
570.4
      
2,727.2
      
1,188.4
      
570.4
  
Effect of exchange rate fluctuation on cash held
    
(7.9
)
    
(0.2
)
    
(7.1
)
    
1.0
      
(1.9
)
Cash and cash equivalents at the end of the period
    
946.8
      
1,545.3
      
946.8
      
1,545.3
      
1,543.3
  

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


 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 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, 2021 (hereafter – the “annual Financial Statements”). These condensed consolidated unaudited interim Financial Statements were approved by the Board of Directors on August 17, 2022.
 

 (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, except as detailed below.

Amendment to IAS 37, Provisions, Contingent Liabilities and Contingent Assets:

As from January 1, 2022, the Company applies the amendment to IAS 37 in respect of onerous contracts, according to which, when assessing whether a contract is onerous, the costs of fulfilling a contract that should be taken into consideration are costs that relate directly to the contract, comprised of: (i) incremental costs, and (ii) an allocation of other costs that relate directly to fulfilling the contract.

The amendment is effective retrospectively in respect of contracts where, at the date of initial application, the entity has not yet fulfilled all its obligations. The Group did not restate comparative data, but adjusted the opening balance of retained earnings in accordance with the amendment, by the amount of its cumulative effect (US$ 3.3 million).

10
ZIM INTEGRATED SHIPPING SERVICES LTD.
 
NOTES TO THE CONDENSED CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS
 

 4
Financial position

  (a)
The container shipping industry continues to be characterized 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, the ongoing military conflict between Russia and Ukraine, or the rise of inflation in certain countries). In addition, regulators in certain jurisdictions have become more active in their regulatory oversight over our industry, through change in regulations and interpretation of related rules.

In June 2022, the US administration published the ‘Ocean Shipping Reform Act of 2022’, promoting an increased regulatory supervision over maritime shipping carriers and others in the shipping industry, mainly in respect of demurrage and detention charges.
 
Market conditions continued to allow the Company to further strengthen its capital structure. Although average freight rates slightly decreased over the course of the second quarter 2022, they remained at elevated levels which more than compensated the impact of increased charter hire rates and bunker prices.
 
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 participating in 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 can contribute to strengthen its capital and operational structure.
 
  (b)
Further to the Company’s operational cooperation with the “2M” alliance initiated in 2018, the Company announced in February 2022, that the 2M alliance partners (Maersk and MSC, two leading shipping liner companies) and the Company have formally agreed to extend their existing operational collaboration agreement, based on a full slot exchange and vessel sharing agreement, on the Asia – US East Coast and Asia – US Gulf Coast trades. The parties also agreed to terminate their collaboration in the Asia to Mediterranean and Pacific North – West trades, in which ZIM launched a new independent service to address its customers' needs. The agreements with the 2M alliance partners became effective on April 2, 2022.

  (c)
In March 2022, the plaintiff in the claim for an alleged patents’ infringement against the Company, as disclosed in Note 27(h) to the Company’s 2021 annual financial statements, voluntarily withdrew his claim, thus resulting in the closure of the related proceedings.

  (d)
Charter agreements:

In January 2022, the Company entered into an agreement with a related-party shipping company for an eight-years charter of three 7,000 TEU liquefied natural gas (LNG) dual-fuel container vessels, for a total consideration of approximately $400 million. The vessels are scheduled to be delivered during the first and second quarters of 2024.

11
ZIM INTEGRATED SHIPPING SERVICES LTD.
 
NOTES TO THE CONDENSED CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS
 
4       Financial position (cont’d)
 
In February 2022, the Company entered into an agreement with Navios Maritime Partners L.P. for chartering a total of thirteen container vessels for a term of approximately five years, in a total consideration of approximately $870 million. The agreement comprises five secondhand vessels at the size range of 3,500-4,360 TEU, all of which were delivered during 2022, deployed in trades between Asia and Africa, and eight 5,300 TEU newbuild vessels, scheduled to be delivered between the third quarter of 2023 and the fourth quarter of 2024.

In March 2022, the Company entered into an agreement with MPC Container Ships ASA and MPC Capital AG, for chartering of six 5,500 TEU newbuild vessels for a period of 7 years, in a total consideration of up to approximately US$ 600 million. The vessels are scheduled to be delivered between May 2023 and February 2024.

As part of its ongoing operational needs, the Company continued to charter additional vessels and extend vessel charter periods. See also Note 1(b) and Note 26 to the Company’s 2021 annual financial statements, in respect of the Company’s chartering agreements with Seaspan and the Company’s commitments.

   (e)
Fleet acquisitions:

Further to the purchase agreements of eight second-hand vessels the Company entered into during the second half of 2021, all related vessels were delivered to the Company, including five vessels which were delivered during 2022.

   (f)
Dividends:

In April and June 2022, further to the approval of the Company’s Board of Directors, the Company distributed dividends in amounts of US$ 2,037 million and US$ 342 million, reflecting US$ 17.00 and US$ 2.85 per ordinary share, respectively.

In August 2022, further to the Company’s recently updated dividend policy, the Company’s Board of Directors approved a distribution of an interim dividend of approximately US$ 4.75 per ordinary share (or approximately US$ 571 million, considering the number of ordinary shares outstanding as of June 30, 2022). The dividend is scheduled to be paid on September 8, 2022, to all holders of ordinary shares on record as of August 29, 2022.

12
 
ZIM INTEGRATED SHIPPING SERVICES LTD.
 
NOTES TO THE CONDENSED CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS


 5
Capital and reserves
 
Share-based payment arrangements
 
During the reported period, the Board of Directors approved grants of share options to officers, directors and employees, as detailed below:
 
Grant date
  
Number of instruments
  
Instrument terms
  
Vesting terms
  
Contractual life
March 9, 2022
 
May 2, 2022
  
1,727,443
 
490,662
  
Each option is exercisable into one ordinary share on a cash-less basis.
  
These options shall vest upon the first, second, third and fourth anniversary as from March 9, 2022, in four equal instalments of 25% each.
  
5 years

Information on fair value measurement

The weighted average fair value of the options granted, measured using the Black & Scholes model, and the related measurement inputs used, were as below:

Grant Date
  
March 9, 2022
May 2, 2022
Fair Value
  
USD 29.72
USD 26.30
Share price on grant date
  
USD 68.94
USD 55.63
Exercise price
  
USD 68.37
USD 51.37
Expected volatility
  
47.3%
48.4%
Expected life
  
5 years
4.9 years
Expected dividends
  
0%
0%
Risk-free interest rate
  
1.7%
3.0%

During the six and three months period ended June 30, 2022, a total of 304,205 and 236,705 ordinary shares were issued, respectively, upon the cashless exercise of options, previously granted in respect of share-based payment arrangements.
 
During the six and three months period ended June 30, 2022, 2021 and the year ended December 31, 2021, the Company recorded expenses related to share-based compensation arrangements of US$ 10.0 million, US$ 7.5 million, US$ 0.8 million, US$ 0.5 million and US$ 20.8 million, respectively.

13
 
ZIM INTEGRATED SHIPPING SERVICES LTD.
 
NOTES TO THE CONDENSED CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS
 

 6
Right-of-use assets
 
   
Balance at June 30
    
Balance at December 31
  
   
2022
    
2021
    
2021
  
   
US $ in millions
  
                   
Vessels
    
3,949.4
      
1,651.5
      
2,720.2
  
Containers and handling equipment
    
418.4
      
522.3
      
458.6
  
Other tangible assets
    
52.3
      
47.3
      
47.6
  
     
4,420.1
      
2,221.1
      
3,226.4
  


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, in which 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:
 
   
Six months ended June 30
    
Three months ended June 30
    
Year ended December 31
  
   
2022
    
2021
    
2022
    
2021
    
2021
  
   
US $’ in millions
  
Freight Revenues from containerized cargo:
                              
   Pacific
    
3,296.7
      
1,994.7
      
1,571.3
      
1,182.5
      
5,278.8
  
   Cross-Suez
    
914.6
      
489.7
      
441.9
      
287.2
      
1,254.2
  
   Atlantic
    
661.6
      
391.4
      
331.8
      
231.8
      
960.8
  
   Intra-Asia
    
1,143.4
      
670.4
      
546.4
      
358.4
      
1,714.6
  
   Latin America
    
366.5
      
184.3
      
186.8
      
96.9
      
490.3
  
     
6,382.8
      
3,730.5
      
3,078.2
      
2,156.8
      
9,698.7
  
Other Revenues (*)
    
762.4
      
395.8
      
350.6
      
225.2
      
1,030.0
  
     
7,145.2
      
4,126.3
      
3,428.8
      
2,382.0
      
10,728.7
  

(*) Mainly related to demurrage, value-added services and non-containerized cargo.
 
14
ZIM INTEGRATED SHIPPING SERVICES LTD.
 
NOTES TO THE CONDENSED CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS


 8
Operating expenses and cost of services
 
   
Six months ended June 30
    
Three months ended June 30
    
Year ended December 31
  
   
2022
    
2021
    
2022
    
2021
    
2021
  
   
US $ in millions
  
Wages, maintenance and other vessel-operating costs
    
16.1
      
7.1
      
9.3
      
3.4
      
14.3
  
Expenses relating to fleet equipment (mainly containers and chassis)
    
15.2
      
14.7
      
7.9
      
7.3
      
28.1
  
Fuel and lubricants
    
646.5
      
330.9
      
384.7
      
185.2
      
739.8
  
Insurance
    
6.2
      
4.9
      
4.1
      
2.4
      
11.5
  
Expenses related to cargo handling
    
1,014.3
      
941.2
      
529.9
      
503.8
      
1,879.9
  
Port expenses
    
155.2
      
125.4
      
84.6
      
65.4
      
255.5
  
Agents’ salaries and commissions
    
130.8
      
93.7
      
70.3
      
51.8
      
238.8
  
Cost of related services and sundry
    
108.9
      
72.4
      
44.2
      
37.4
      
170.9
  
Slot purchases and hire of vessels
    
270.4
      
261.1
      
119.5
      
122.7
      
530.5
  
Hire of containers
    
17.0
      
18.1
      
7.8
      
9.5
      
36.6
  
     
2,380.6
      
1,869.5
      
1,262.3
      
988.9
      
3,905.9
  


9
Financial instruments
 
Financial instruments measured at fair value
 
   
June 30,
  
   
2022
    
2021
  
   
Investments in sovereign bonds at fair value through other comprehensive income
    
Investments in corporate bonds at fair value through other comprehensive income
    
Investments in equity instruments at fair value through other comprehensive income
    
Investments in equity instruments at fair value through profit and loss
    
Investments in equity instruments at fair value through other comprehensive income
    
Investments in equity instruments at fair value through profit and loss
  
   
US $ in millions
  
Other investments:
                                    
Level 1 financial instruments carried at fair value
                                    
Current
    
7.1
      
37.0
      
2.2
      
     
2.2
      
 
Non-Current
    
219.2
      
399.9
      
20.8
                          
     
226.3
      
436.9
      
23.0
      
     
2.2
      
 
                                                 
Level 3 financial instruments carried at fair value
                                                
Non-Current
                            
7.8
              
2.3
  
     
226.3
      
436.9
      
23.0
      
7.8
      
2.2
      
2.3
  

15
 
ZIM INTEGRATED SHIPPING SERVICES LTD.
 
NOTES TO THE CONDENSED CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS
 
9      Financial instruments (cont’d)
 
   
December 31,
  
   
2021
  
   
Investments in sovereign bonds at fair value through other comprehensive income
    
Investments in corporate bonds at fair value through other comprehensive income
    
Investments in equity instruments at fair value through other comprehensive income
    
Investments in equity instruments at fair value through profit and loss
  
   
US $ in millions
  
Other investments:
                        
Level 1 financial instruments carried at fair value
                        
Current
    
2.0
      
16.3
      
2.0
      
 
Non-Current
    
35.5
      
127.4
                  
     
37.5
      
143.7
      
2.0
      
 
                                 
Level 3 financial instruments carried at fair value
                                
Non-Current
                            
2.3
  
     
37.5
      
143.7
      
2.0
      
2.3
  

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.
 
16
ZIM INTEGRATED SHIPPING SERVICES LTD.
 
NOTES TO THE CONDENSED CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS
 


 10
Earnings per share
 
Basic and diluted earnings per share

   
Six months ended June 30
    
Three months ended June 30
    
Year ended December 31
  
   
2022
    
2021
    
2022
    
2021
    
2021
  
   
US $ in millions
  
Profit attributable to ordinary shareholders used to calculate basic and diluted earnings per share (US $ in millions)
    
3,041.9
      
1,474.1
      
1,333.1
      
886.5
      
4,640.3
  
                                         
Number of outstanding shares at the beginning of the period used to calculate basic earnings per share
    
119,910,688
      
100,000,000
      
119,910,688
      
100,000,000
      
100,000,000
  
Effect of shares issued
            
12,403,315
              
15,000,000
      
13,712,329
  
Effect of share options   
    
40,030
              
79,620
              
1,393,175
  
                                         
Weighted average number of ordinary shares used to calculate basic earnings per share
    
119,950,718
      
112,403,315
      
119,990,308
      
115,000,000
      
115,105,504
  
                                         
Effect of share options
    
491,243
      
4,988,241
      
451,905
      
5,133,808
      
3,828,219
  
                                         
 Weighted average number of ordinary shares used to calculate diluted earnings per share
    
120,441,961
      
117,391,556
      
120,442,213
      
120,133,808
      
118,933,723
  


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