Investing.com -- ZIM Integrated Shipping Services Ltd. on Wednesday reported a net loss of $86 million for the first quarter ended March 31, 2026, compared with net income of $296 million in the same period a year earlier, sending shares down over 2% in pre-market trade.

Revenue for the three months ended March 31, 2026 fell to $1.40 billion from $2.01 billion a year earlier.

Carried volume declined to 866,000 twenty-foot equivalent units (TEUs) from 944,000 TEUs in the first quarter of 2025. The average freight rate per TEU fell to $1,310 from $1,776 a year earlier.

Operating loss (EBIT) was $18 million, compared with operating income of $464 million in the year-earlier period.

Adjusted EBITDA fell to $313 million from $779 million, with the adjusted EBITDA margin contracting to 22% from 39%. Adjusted EBIT loss was $5 million, compared with Adjusted EBIT of $463 million a year earlier.

The loss before income taxes was $98 million, against a profit of $381 million in the first quarter of 2025. A tax benefit of $12 million partially offset the pre-tax loss. Diluted loss per share was $0.71, compared with diluted earnings per share of $2.45 a year earlier.

Net cash generated from operating activities was $263 million, against $855 million a year earlier. Free cash flow was $235 million, compared with $787 million. Capital expenditures totalled $31 million, down from $78 million. Net debt stood at $2.93 billion as of March 31, 2026, versus $2.93 billion a year earlier, with the net leverage ratio rising to 1.7x from 1.3x at December 31, 2025.

ZIM President and Chief Executive Eli Glickman said the results reflect a “softer freight rate environment, coupled with weaker demand," adding that the conflict in the Persian Gulf "has sparked a sharp increase and significant volatility in bunkering costs."

He said the Israeli container liner expected "a more meaningful effect in the second quarter, before our actions to offset these costs, including increased freight rates and bunker-specific surcharges, begin to take hold."

The company said it would not pay a dividend on account of first-quarter results, citing its dividend policy and the net loss recorded.

On February 16, 2026, ZIM entered into a merger agreement under which Hapag-Lloyd will acquire ZIM for $35.00 per share in cash.

The transaction was approved by shareholders on April 30, 2026 and is expected to close in the fourth quarter of 2026, subject to regulatory approvals including from the State of Israel.

ZIM currently operates 114 containerships with a total capacity of 699,000 TEUs and 13 car carriers.