Outlook brightens for Zim as carrier slashes Q1 loss

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LONDON — Zim Integrated Shipping Services slashed its first-quarter net loss, extending a financial improvement that began in mid-2015, as the Israeli carrier increased container traffic and launched a revised niche route network.

The Haifa-based carrier posted a net loss of $6.4 million, down from $56.3 million a year earlier, as revenue edged up 4 percent to $655 million, compared with $630 million in the first quarter of 2016.

Adjusted earnings before interest, tax, depreciation, and amortization, soared to $57.4 million from $8.2 million, pushing the operating margin up to 8.8 percent from 1.3 percent in the first quarter of 2016.

The $30.7 million adjusted earnings before interest and tax, compared with a negative $16.4 million a year ago, was the highest since mid-2015.

“Since Q3 2016 we have been witnessing a positive trend in the industry with slightly improved freight rates in some trades. However, market conditions on the whole remained challenging and volatile,” Zim said. “In the face of this tough business environment, Zim continues to outperform the industry and achieve improved results.”

Traffic grew 3.6 percent to 598,000 TEU from 577,000 TEU in the first quarter of 2016, and the average freight rate inched up 1.1 percent to $953 per TEU from $943 per TEU.

Zim is bullish about its future, despite being one of the few top 20 carriers not a member of the three carrier alliances — 2M, Ocean Alliance, and THE Alliance.

“With the new alliance structure in place, Zim, as an independent, global niche carrier, can offer unique advantages to customers, and is well prepared for the current market challenges,” said Rafi Danieli, Zim’s president and CEO.

“The renewed network of services we introduced in April is aimed at enhancing our ability to improve our performance and achieving better results.”

Zim posted a net loss of $163.5 million in 2016, but it swung to a $4.6 million profit in the fourth quarter from a $37.6 million loss in the previous three months.

Contact Bruce Barnard at brucebarnard47@hotmail.com.

Source: JOC.com

 

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