ZIM Cuts Losses
Israel’s shipping company ZIM Integrated Shipping Ltd. has published its results for the second quarter of 2014, on the backdrop of the successful conclusion of its debt restructuring on July 16, 2014. Under the terms of restructuring, Israel Corporation’s holding in ZIM was reduced from 100% to 32%.
ZIM said that it was continuing execution of its strategic plan in order to continue improving its results, despite the persisting decline in freight rates around the world.
“In spite of the uncertainty during the second quarter around the company’s ability to conclude the debt restructuring, the labor disturbances by company’s unions in Israel, shutting down of the company’s headquarters and the Sea Officers Union preventing a ship from sailing, ZIM managed to improve its results and maintain rate of profitability in the vicinity of the industry’s average.”
For the second quarter of 2014, ZIM reported a loss, before interest and tax (EBIT), of about USD 9 million, reflecting improvement compared to the corresponding quarter of 2013, for which it reported an EBIT loss of about USD 29 million.
Second-quarter EBITDA totaled close to USD 29 million, compared to approximately USD 12 million in the corresponding quarter of 2013. Operating cash flow totaled close to USD19 million in Q2 2014, an improvement compared to about USD 14 million in Q2 2013.
The volume of TEU containers carried in Q2 2014 of 2014 decreased by 2% compared to the second quarter of 2013, to 619,000 TEUs. Most of the decrease was due to terminating lines between Northern Europe and the United States (in mid-2013), and lines between Asia to Northern Europe (at the start of the second quarter of 2014).
Revenue in Q2 2014 amounted to close to USD 875 million, compared to about USD 977 million in the corresponding quarter of 2013.
The reduction in revenues was a result of the closing lines; not having the revenues from the container manufacturing plant in China consolidated in Q2 2013 after it was sold during the third quarter of 2013; and the sustained pressure on freight prices. Freight rates per TEU averaged USD 1,206, a drop of USD 40 per container (3%) compared with Q2 2013.
“Finalizing the complicated restructuring paves the way for renewed momentum, the company is now prepared to ride the wave of global economic recovery.
The “New ZIM” is concentrating its efforts on executing its business plan, which in substance focuses on profitable lines where the company offers added value to its customers, while improving and upgrading its points of interface with customers and continuing to improve its operating efficiency, ” ZIM said.