ZIM reports $11m Q3 profit

Net income at the Israeli ocean carrier improved vastly compared to loss of $63 million in the third quarter of 2014 despite a 12 percent year-over-year reduction in total revenues.    ZIM has reported net income of $11 million for the third quarter of 2015, down slightly from a $12 million profit in the second quarter, but still a vast improvement compared to a loss of $63 million in the third quarter of 2014.
   The Israeli ocean carrier posted revenues of $749 million for the quarter, a 12 percent decrease from $854 million in the same period last year.
   For the first three quarters of 2015, ended Sept. 30, the company reported net income of $35 million, compared to a net loss $192 million for the first nine months of 2014.
   ZIM attributed the results primarily to what it described as a “challenging market environment with freight rates reaching historic lows in several key trades.” The carrier’s average freight rate fell 13 percent compared to Q3 2014 to $1,120 per TEU in Q3 2015.
   Despite a practically non-existent peak shipping season and weak global demand, the company increased its overall volumes carried 1 percent year-over-year to 581,400 TEUs in the third quarter. ZIM said its volumes were “negatively affected by lower global demand during the quarter, offset by the positive contribution of the new Z7S service that the company launched earlier in the year.”
   During the second quarter of 2015, ZIM launched operations of the Z7S (ZIM Seven Star Express) loop, a new service connecting South China, South East Asia and the Indian sub-continent with the U.S. East Coast via the Suez Canal.
   According to ocean schedule and capacity database BlueWater Reporting, the Z7S operates with ten ZIM vessels with an average capacity of 4,756 TEUs. The full port rotation of the loop, on which G6 Alliance member OOCL purchases slots, is Da Chan Bay, Yantian, Cai Mep, Singapore, Colombo, New York/New Jersey, Savannah, Norfolk, Singapore, and back to Da Chan Bay.
   “The launch of the new Z7S line, which is one of the fastest and most reliable lines connecting South China, South East Asia, the Indian sub-continent and the U.S. East Coast via the Suez Canal, is well aligned with the Company’s strategy to strengthen its presence in U.S East Coast as well as other growing trades around the world,” ZIM said in a statement. “The Z7S service has enabled the company achieve a leading and dominant position in the important Asia-U.S. East Coast trade.”
   ZIM also noted it implemented a new vessel loading program during the third quarter, designed to “maximize vessel utilization and cargo load, as well as increase port productivity and data interface between planners, terminals, and vessels while significantly decreasing planning time.”
   Meanwhile, recent media reports indicate the company may be planning an initial public offering for some time in 2016. In early October, news service Reuters quoted “two sources familiar with the matter,” who said ZIM had selected investment firms Bank of America Merrill Lynch and Barclays Plc to advise it in an IPO. ZIM has yet to set a date or valuation for its public float, but the sources said the IPO will most likely be on the New York Stock Exchange.
   ZIM told Reuters in an emailed response the company “has been contemplating going public and other financing options since 2007. This strategy has not changed. We have nothing to report at this time and do not comment on rumors.”