Zim losses deepen in 2nd quarter
Liner carrier Zim said Thursday it sustained operating losses of $79 million in the second quarter and $86 million for the first half of 2011.
The losses came in spite of a 7 percent rise in second quarter revenue to $1 billion. Though the line didn't provide comparable operating loss statistics for the first half of 2010, its second quarter net loss of $68 million was a big reverse from the $3 million it made in the second quarter 2010.
Zim's second quarter container volume rose 9 percent to 596,000 TEUs compared to the same period in 2010, but declining freight rates severely affected its profitability.
The line's average freight rate per TEU in the second quarter was $1,307 compared to $1,360 in the first quarter.
'Among other things, the downswing in freight rates is due to an increase in the number of active vessels in the market, owing to the increased deployment of new ships in the first half of 2011,' Zim said.
'In spite of the difficult market conditions, the company recorded a positive cash flow from operating activity in the first half of 2011 as well as a positive EBITDA (earnings before interest, tax, depreciation and amortization) of $13 million. The company's financial assets at the end of the quarter amounted to $386 million. Zim’s financial results continue to be close to the average operating income in the liner shipping industry, a fact reflecting the efficiency measures and strategic changes being introduced by the company, according to the strategic plan formulated in 2010 which is currently being implemented.'