ZIM Climbs the Hole
Israeli containership owner and operator ZIM has managed to cut its loss for the quarter ending September 30 on the back of improved freight rates and the decline in fuel prices, the company said in its financial report for the third quarter 2014.
The USD 3.4 billion debt restructuring, which included a debt to equity swap of USD 1.4 billion, ”significantly improved the company’s financial strength and brought the company to report positive equity,” according to ZIM. ”This, together with the deletion of the ‘going concern’ qualification already in Q2 2014 reports, placed ZIM in a favorable position to ride the wave of global economic recovery.”
Excluding the impact of debt restructuring ZIM completed on July 16, the company ended the quarter with USD 41 million EBIDTA, an improvement of USD 18 million compared to the previous quarter, and USD 30 million compared to the corresponding quarter last year.
The net loss excluding the effects of debt restructuring was USD 20 million, an improvement of USD 56 million compared to the corresponding quarter last year.
ZIM had a negative EBITDA of USD 97 million in the third quarter, and a net loss of USD 63 million when the effects of debt restructuring are included.
The company carried 557 thousand TEUs during the quarter, reflecting a 10% decrease compared to the previous quarter and 13% compared to the corresponding quarter in 2013. Most of the decrease was as a result of terminating the service from Asia to Northern Europe as part of the business plan.
The total revenues in the quarter were USD 854 million compared to USD 875 million in the previous quarter and USD 900 million in the corresponding quarter last year. The reduction in revenues was also a result of terminating the service from Asia to northern Europe. The average freight rates per TEU was USD 1,281, an increase of USD 75 per TEU (6%) compared to the freight rate in the previous quarter, and an increase of USD 79 per TEU (7%) compared to the corresponding quarter last year.
‘‘In spite of the reduction in revenues and volume of containers carried, ZIM managed to reduce the net loss and recorded an operating profit thanks to the company’s continued streamlining activities, improving the sales and service, combined with the decline in fuel prices (accelerated further after the balance sheet date), reducing activities of unprofitable lines, and increase in freight rates in certain lines,” ZIM said in the report.