SLIDING RATES PUSHED ZIM INTO RED

SLIDING RATES PUSHED ZIM INTO RED    Zim Israel Navigation Co. incurred a net deficit of NIS44 million ($9 million) in 2002, as overcapacity in container shipping caused an 11.3-percent decrease in the carrier’s average revenue per container.
   The 2002 loss compares with a net profit of NIS60 million in 2001.
   Israel Corp., which owns 49 percent of Zim, stressed the “stiff competition” faced by its shipping affiliate in 2002. “The surplus supply in the market, resulting from the use of new and larger container vessels, caused a reduction of 11.3 percent in the average revenue per container,” it said.
   Lower rates per container resulted in a decrease in revenues of NIS795 million ($166 million), when compared with 2001.
   Zim increased its carryings 13.5 percent in 2002 to about 1.5 million TEUs. It also lowered its variable costs through efficiency measures, and cut leasing costs 21 percent during the year.
   The year-long deficit of about $9 million includes a loss of $15 million in the first half of last year, offset by improved results in the second half.
   For the fourth quarter of 2002, Zim earned a net profit of NIS24 million ($5 million).
   Israel Corp. reported no significant progress in the planned privatization of Zim, which is partially owned by the Israeli state. Last year, Israel Corp. signed a memorandum of agreement that gives it first refusal to acquire the state’s holding in Zim, or the right to join the state in selling its shares in Zim to a buyer as a single transaction.
   The agreement provides that the state would retain a single, non-transferable “special state share” to give it rights to “guarantee its crucial interests.” The share does not provide voting or other capital rights.