ZIM reports $56m loss in Q1

The Israeli ocean carrier experienced a net loss of $56 million in the first quarter of 2016, compared to profit of $12 million in the first quarter of 2015.    ZIM Integrated Shipping Services experienced a net loss of $56 million in the first quarter of 2016, compared to profit of $12 million in the first quarter of 2015, the Israeli ocean carrier said.
   Revenues for the quarter totaled $630 million, a 20 percent decrease from the $792 million recorded in the same period a year earlier.
   The drop came even as ZIM carried 577,000 TEUs in the first quarter, 3 percent more cargo than in the first quarter of 2015, and reflected a drop in average freight rates, which fell 25 percent year-over-year to $943 per TEU.
   Meanwhile, ZIM’s adjusted earnings before interest and taxes (EBIT) fell to a loss of $16 million in the first quarter of 2016, compared to a gain of $61 million for the first quarter of 2015.
   Adjusted EBIDTA remained positive at $8 million in the first quarter of 2016, compared with $85 million in the first quarter of 2015.
   “The Shanghai Containerized Freight Index reached the levels of 400 points during the first quarter, compared to an average of 989 points in Q1 of 2015, marking a new record low, while idled fleet continued to increase, topping 1.5 million TEUs,” ZIM said. “Significant changes in the industry, including mergers and acquisitions and restructuring of global alliances, also add volatility and uncertainty in the market. These negative trends continued subsequent to the quarter end.”
   “The very challenging market situation impacts the industry as a whole,” ZIM President and CEO Rafi Danieli said. “ZIM continues to make progress with its extensive cost-cutting and efficiency projects, along with investment in customer service excellence, as evident in a recent first place ranking awarded to ZIM in a schedule reliability report.”
   He added that ZIM’s “asset-light business model facilitates a highly flexible and cost-efficient fleet management, which, together with our pro-active optimization and rationalization of the company’s line network, proves crucial in the current market environment. Our strategic business plan, focusing on select markets where the company has a competitive advantage, aims at allowing ZIM to cope with the challenges faced by the industry.”
   ZIM, which is the 17th largest container carrier, owns just seven of the 79 ships in its fleet, with 90.9 percent of its 352,021 TEUs of capacity on chartered ships, the highest of any of the 20 largest container carriers, according to industry analyst Alphaliner.